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%), $2,003 billion in 2011 (an increase of 9.7%), $2,006 billion in 2013 (an increase of 0.1%) and $2,036 billion in 2014 (latest year available – an increase of 1.5%) . 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.

Spending Item 2004 Spending in billions (rounded to the nearest billion) 2006 Spending in billions (rounded to the nearest billion) 2007 Spending in billions (rounded to the nearest billion) 2009 Spending in billions (rounded to the nearest billion) 2011 Spending in billions (rounded to the nearest billion) 2013 Spending in billions (rounded to the nearest billion) 2014 Spending in billions (rounded to the nearest billion)
Education 429 482 515 567 592 599 610
Welfare Programs 339 379 393 437 497 519 545
Hospitals 40 45 48 57 66 67 71
Health 50 51 58 62 60 63 64
Highways 86 100 103 107 109 112 115
Police Protection 11 12 13 14 14 15 15
Correction Facilities 39 43 47 50 47 48 50
Natural Resources 19 20 22 23 22 21 21
Parks and Recreation 6 6 6 6 6 6 6
Government Admin. 45 48 51 54 53 53 54
Interest on debt 33 38 41 45 47 46 45
Utilities 22 25 24 27 24 25 25
Liquor Stores Expenses 4 4 5 5 5 6 6
Insurance Trusts 171 175 182 241 321 293 278
Other 112 124 127 131 140 133 131
Total 1,406 1,552 1,635 1,826 2,003 2,006 2,036

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%), $2,216 billion in 2013 (a decrease of 2.2%), and $2,360 in 2014 (latest year available – an increase of 6.5%). 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, but increased thereafter because of a pickup in economic activity. 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 of 7.5%. This includes a mandatory local rate of 1%. The rate can vary among local areas as some counties add their own sales taxes. For example, in some local parts of California the rate can be as high as 10%. In parts of the state 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.

Revenue Item 2004 Revenue in billions (rounded to the nearest billion) 2006 Revenue in billions (rounded to the nearest billion) 2007 Revenue in billions (rounded to the nearest billion) 2009 Revenue in billions (rounded to the nearest billion) 2011 Revenue in billions (rounded to the nearest billion) 2013 Revenue in billions (rounded to the nearest billion) 2014 Revenue in billions (rounded to the nearest billion)
Federal Government Grants 394 419 430 478 594 551  551
General Sales Tax 198 227 236 228 234 255  271
Selective Sales Tax 95 106 109 115 132 139  140
License Tax 40 45 47 50 52 55  51
Individual Income Tax 196 246 266 246 259 310  311
Corporate Income Tax 30 47 53 40 40 45  46
Utilities 13 16 17 16 15 14  14
Liquor Stores 5 5 6 6 7 7  7
Insurance Trusts 375 367 520 394 592 485  600
Other Taxes 31 39 38 37 40 43  46
Current Charges 115 137 141 158 181 183  191
Miscellaneous General Revenue 94 118 130 123 120 128  131
Total* 1,587 1,773 1,993 1,891 2,266 2,216  2,360

Source: US Census Bureau, summary table (http://www.census.gov/govs/state/).
*The numbers may not add up to the total due to rounding.

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 in 2010 and 2012 (latest data available). During these two years the total number of full-time employees hired by all 50 states declined by 74,079 workers (a decrease of 1.9%) whereas the number of part-time employees rose by 34,606 (an increase of 2.3%).

Category Number of full-time employees in 2010 Number of part-time employees in 2010 Number of full-time employees in 2012 Number of part-time employees in 2012
Education Total (Elementary & Secondary, and Higher Education) 1,375,774 1,293,411 1,380,528 1,342,916
PoliceProtection – Officers 68,083 1,004 68,106 698
Other Police Employees 37,525 2,128 37,117 2,211
Hospitals 366,566 71,593 347,706 73,739
Highways 223,711 11,691 214,544 10,483
Public Welfare 228,898 12,184 223,674 11,089
Judicial and Legal 171,364 9,774 166,338 8,487
Health 185,267 14,513 191,794 15,496
Correction Facilities 467,000 9,596 435,777 8,628
Parks and Recreation 28,225 13,716 29,408 12,280
State Liquor Stores 6,486 5,310 6,985 4,839
Total* 3,803,877 1,521,698 3,729,798 1,556,304

*The individual components listed in the table do not add up to the total because the table only lists the top categories.

Source: US Census Bureau (http://www2.census.gov/govs/apes/10stus.txt and http://www2.census.gov/govs/apes/12stus.txt).

Spending by Counties

Education, social services and public welfare, transportation, public safety, environment and housing, and general governmental administration are the most important areas of county spending.

The United States Census Bureau reports that average education spending per pupil in the United States was $10,700 during fiscal year 2013. New York tops the list with $19,818 spent per pupil. Other high spenders were Alaska ($18,175), the District of Columbia ($17,953), New Jersey ($17,572) and Connecticut ($16,631). Of the 100 largest school systems, Maryland had 4 in the top 10 with regards to per pupil spending. Utah spent the least with only $6,555 per pupil in 2013.

Source: http://www.census.gov/newsroom/press-releases/2015/cb15-98.html

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.