Sales and property taxes are regressive and tend to fall disproportionately on lower-income people. Sales taxes are location-based and future revenues could be undermined by internet commerce. This approach has been used by state legislatures to provide start-up money and to supplement other revenue sources. Since then, the program has received a portion of the state property transfer tax and funds from state bonds. In general, annual appropriations are not used as a primary funding source for PACE programs.
State agencies develop spending proposals that are incorporated into the state budget.
Legislators may also introduce bills to allocate funds to particular programs. Town and county boards make spending recommendations that may be included in the local budget. Sometimes opportunities arise to earmark budget surpluses at the end of the fiscal year. Benefits Expenditures reflect the will of the current electorate. This approach saves financing costs.