|Section 5: State and Local Government Spending and Revenues|
|Macroeconomics - Unit 6|
State Government Spending
Total expenditures for all 50 states in the United States was $1,406 billion in 2004, $1,552 billion in 2006 (an increase of 10.4%), $1,635 billion in 2007 (an increase of 5.3%) $1,826 billion in 2009 (an increase of 11.7%), and $2,003 billion in 2011 (an increase of 9.7%) . General expenditures by function rounded in billions of dollars are listed in the table below.
Education is the single-largest expenditure by state governments, followed by public welfare. The expense on education is shared by states and counties, with the counties spending the majority of their funds on county public schools, and the states sharing the burden of financing post-secondary state education. The programs that experienced large increases in their budgets in recent years include education, welfare, health, highways, and insurance trusts.
Public welfare expenditures include unemployment compensation payments, food stamps, school lunch subsidies, and other income maintenance programs.
Source: U.S. Census Bureau, summary table (http://www.census.gov/govs/state/)
State Government Revenues
Total revenue for all 50 states in the United States was $1,587 billion in 2004, $1,773 billion in 2006 (an increase of 11.7%), $1,993 billion in 2007 (an increase of 12.4%), $1.891 billion in 2009 (a decrease of 5.1%), and $2,266 billion in 2011 (an increase of 19.8%). Because of the recession and the fluctuations in the amount of funding in the insurance trusts, the tax revenue for many of our states dropped considerably in 2009. Revenues by type of tax or source rounded in billions of dollars are listed in the table below.
Federal grants are the largest source of income for all states, followed by insurance trust revenue. Of the tax sources, general and selective sales taxes and individual income taxes provide the most money for most of the states. All states collect sales taxes, except Alaska, Delaware, Montana, New Hampshire and Oregon. California has the highest statewide sales tax (7.25%), even though the rate can vary among local areas as some counties add their own sales taxes. For example, in some parts of New York the combined state and county sales tax is 9%.
Current charges are fees collected for specific services provided by state governments. Examples include highway toll assessments, school receipts (lunches, athletic contests, tuition, etc.) and hospital fees.
General sales taxes are consumption taxes on general items such as food, clothing, electronics, furniture, etc. Selective sales taxes are consumption taxes similar to federal excise taxes. They are levied on products such as gasoline, tobacco, alcoholic beverages, and insurance premiums.
Source: US Census Bureau, summary table (http://www.census.gov/govs/state/).
Local Government Spending
The table below identifies the top categories of public employment and payroll as indicated by the number of full-time and part-time employees in all U.S. States combined during 2010 (latest data available).
Source: US Census Bureau (http://www2.census.gov/govs/apes/10stus.txt).
Local Government Revenues
Counties receive revenue from a variety of sources. States provide general funding to counties. In addition, counties collect taxes, including property taxes, sales taxes, individual income taxes, motor vehicle taxes, real estate transfer taxes, cable television franchise taxes, and hotel/motel taxes. State law dictates the tax that counties are allowed to levy. The property tax is the single most important source of revenue for counties. Nearly half of the states allow their counties to collect sales taxes, which is the second most important source of revenue for most counties. Individual income taxes are collected by counties only in Indiana and Maryland.
|Last Updated on Thursday, 27 December 2012 10:51|