The regular evaluation of an organization's finances goes a long way toward establishing trust with stakeholders, such as taxpayers, board members, clients, patrons, and funding agencies. Just as financial planning and budgeting are integral parts of an organization's success, financial audits and evaluations are vital parts of an organization's functioning. Evaluating an organization's financial condition involves determining whether it has the revenue from taxes, fees, and other sources to meet its needs and if its assets exceed its liabilities. Assessing the financial condition is just an analysis of the city's financial health.
This paper discusses the city where you live (New York City) and then evaluates its financial condition and growth opportunities by addressing the bulleted statements below. Be sure first to review your readings and then research additional resources to assist in your evaluation. For example, it is helpful to examine available data and other public documents for that city. These resources are useful and should be incorporated into your paper, but remember that those resources do not count as scholarly (peer-reviewed, academic articles, and texts).
To complete:
Write a 6 page paper (not including title page, abstract page, and reference page) that addresses the following:
• One page describing your local city (New York City). Include descriptive information as population, trends, and other crucial demographical information.
• Two pages are looking at the largest source of taxes in the city, which could include sales tax, property tax, or income tax. Are your entity's revenue and expenditures balanced? Why or why not? In your assessment, consider the following three factors: the amount of revenue that the entity is collecting, the percentage of total revenue contributed by sales tax, how much the city is spending.
• One page considering these six essential factors that impact city revenue: Deterioration of revenue base, internal procedures or policies that may adversely affect revenue yields, over-dependence on obsolete or external revenue sources, tax burden changes, poor revenue estimating practices, and inefficiency in the collection and administration of revenues. Select two that apply to your city, and then evaluate how these impact your city.
• One page, you propose to increase city tax revenue, and you know from your course readings that price elasticity and demand are essential considerations. Understanding the characteristics of your city, evaluate whether the following three tax increase options would be effective, assuming all would be legally possible: 1) a .5% increase in sales tax, 2) a 3% increase in restaurant tax and 3) a 5% increase in tourism tax. In your evaluation, consider price elasticity and positive and negative externalities for each type of tax. This is where knowing your city and its significant sources of revenue are vital.
Sample Solution