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Census: State Governments Finance Summary: 2011

Census: State Governments Finance Summary: 2011

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Published by Casey Seiler
Covers revenues, expenditures, debt and more aspects of state government finances.
Covers revenues, expenditures, debt and more aspects of state government finances.

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Published by: Casey Seiler on Dec 06, 2012
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U.S. Department o Commerce
Economics and Statistics Administration
State Government Finances Summary: 2011
Governments Division Briefs 
December 2012
By Cheryl H. Lee, Mara Beleacov, and Nancy Higgins
This report is part o a continuing series designed toprovide inormation on the structure, unction, employ-ment, and nances o the United States’ nearly 90,000state and local governments. The U.S. Census Bureauproduces data quinquennially as part o the Census o Governments in years ending in “2” and “7.” Additionalstatistics are produced annually and quarterly duringthe intercensal period rom data collected rom a serieso surveys. These surveys provide a wealth o inorma-tion on state and local government employment andnancial activity.This report presents data on state government nancesbased on inormation collected rom the 2011 AnnualSurvey o State Government Finances. This surveycovers the ollowing government nance activities:revenues by source, expenditures by characteristic andunction, indebtedness by term, and cash and securityholdings by purpose.For Census Bureau statistical purposes, a governmentis dened as an organized entity which, in addition tohaving governmental character, has sucient discretionin the management o its own aairs to distinguish it asseparate rom the administrative structure o any othergovernmental unit.Data in this report reer to scal years that endedbetween July 1, 2010, and June 30, 2011. In act, 46 o the 50 state governments have a scal year that runsrom July 1 to June 30. However, our state govern-ments are exceptions to the June 30 scal year end date:Alabama and Michigan (September 30), New York(March 31), and Texas (August 31). Not all dependentagencies o a government necessarily share a scal periodthat coincides with the central state government. Totalsor an individual government, in those instances, are thesummation o nances or all agencies with a scal periodthat ended between July 1, 2010, and June 30, 2011(FY 2011).
Government nancial data are presented within ourbroad activity sectors, namely general government,utilities, liquor stores, and insurance trust sectors. Thegeneral government sector includes all governmentrevenue and expenditure activities that are consistentwith government unctions, such as public protection,education, health and welare, and the like. These activi-ties are distinct rom business-like activities presentedin the remaining three sectors: utility, liquor stores,and insurance trusts. The utility sector consists o water supply, electric power, gas supply systems, andtransit acilities owned and operated by governmentsor operated under contract by a private rm while thegovernment maintains day-to-day nancial oversight.The liquor store sector is comprised o dispensaries
Total taxes, ater posting declines in 2009 and2010, increased 8.0 percent in 2011 to $757.9billion.
Source: U.S. Census Bureau, 2011 Annual Survey o StateGovernment Finances.
Throughout this report, all reerences to years (i.e., 2010 or 2011)reer to scal years.
U.S. Census Bureau
operated by 17 state governments.
The insurancetrust activities consist o state medical and disabilityunds, public pensions systems or state governmentemployees, and specied government social and lieinsurance programs, such as unemployment compen-sation, workers’ compensation, and state medical anddisability unds.
Finances o state governments are closely tied toprevailing economic conditions. The economic reces-sion that began in the rst quarter o 2008 and lastedthrough the second quarter o 2009 created scal stressor all levels o government. Since this time, states havebeen making a slow but steady scal recovery. Stategovernments play several roles in the intergovernmen-tal scal system, including creator and nancier o some local government services; conduit or, and redis-tributor o ederal unds; as well as providing directpublic services such as health and hospitals, publicsaety, and highways.General revenue and general expenditure compriseactual receipts and payments o a government and itsagencies (net o correcting transactions and recoveriesor reunds), excluding government-operated enterprises,utilities, and public trust unds. Transactions excludedas general revenue or general expenditure include debtissuance and debt retirement; loans and investments;agency- and private-trust transactions; and internaltransers between unds o a government. Aggregatesor groups o governments exclude intergovernmentaltransactions between the governments involved.
$1,652.6 billion in scal year 2011, an increase o 5.7 percent rom scal year 2010. General rev-enue increased 4.0 percent rom 2007 to 2008,decreased 1.0 percent rom 2008 to 2009, andincreased 4.6 percent rom 2009 to 2010. Themajor revenue sources and share o general revenuein 2011 were taxes (45.9 percent), ederal grants(34.7 percent), and service charges (11.0 percent).
totaled $1,652.9 billion, an increase o 3.7 percentrom scal year 2010. During 2011, 29.8 percent o state general expenditure was in the orm o grantsand aid to local governments (including independent
The state governments with liquor store operations are Alabama,Idaho, Iowa, Michigan, Mississippi, Montana, New Hampshire, NorthCarolina, Ohio, Oregon, Pennsylvania, Utah, Vermont, Virginia,Washington, West Virginia, and Wyoming.
For more inormation, please reer to the
Government Financeand Employment Classifcation Manual 
at <www2.census.gov/govs/pubs/classication/2006_classication_manual.pd>.
school district governments), thereby underliningthe states’ role as a nancial resource or their sub-ordinate governments. Capital outlay accounted or7.0 percent o general expenditure. Expenditure oreducation and public welare, together, comprisedover 65.9 percent o all state government generalexpenditure, accounting or 35.8 percent and 30.1percent, respectively. Expenditure on highwayswas the next most nancially signicant activity,accounting or 6.6 percent o general expenditure.
and short term) was $1,132.5 billion at the end o 2011, an increase o 1.5 percent rom 2010. Thisaspect o state nances, however, does not havenearly the impact o the local (or ederal) govern-ment debt burdens. The state government total, orexample, was only 39.4 percent o the state andlocal government total ($2,829.1 billion in govern-ment debt or 2010).
billion in 2011. However, the states dedicated mosto this money to specic purposes, such as redemp-tion o long-term debt (13.4 percent o total cashand security holdings). The single largest portion o these assets, $2,437.0 billion, or 66.5 percent, washeld in state government-employee retirement trustsystems, making this accumulation o unds a majorsource o investment capital. Only 1.4 percent washeld or capital improvements.
Taxes consist o compulsory contributions exacted bygovernments or public purposes—including generalrevenue and/or regulation. However, this reportingcategory excludes employer and employee paymentsor retirement and social insurance purposes (classedas insurance trust revenue) and special assessments,which are classied as nontax general revenue.Taxes were the single largest source o general rev-enues or state governments (Figure 1). In 2011, taxescomprised 45.9 percent o general revenues, totaling$757.9 billion. This was an increase o 8.0 percent rom
Service charges, $181.1 billion in 2011, increased 6.6percent rom 2010.
Source: U.S. Census Bureau, 2011 Annual Survey o StateGovernment Finances.
U.S. Census Bureau
32010 when taxes totaled $701.7 billion, and up 6.2percent rom 2009, when taxes totaled $713.5 billion.Sales and gross receipt taxes were the predominanttax sources or state governments, totaling $366.3billion and 48.3 percent o total taxes in 2011. Thisrepresented the highest level during 2007 to 2011.Sales and gross receipts totaled $342.7 billion in2010, $342.6 billion in 2009, $358.8 billion in 2008,and $352.7 billion in 2007.Selective sales taxes were up 9.7 percent rom 2010,with the largest increase in other selective salestaxes, up 29.5 percent rom 2010. Taxes collected oninsurance premiums increased 3.8 percent, taxes onalcoholic beverages increased 4.1 percent, and motoruel increased 8.9 percent.Income taxes, both personal and corporate, totaled$299.3 billion in 2011, an increase o 9.8 percentrom 2010. This was the rst increase in the last 2years; income taxes totaled $272.7 billion in 2010,$285.2 billion in 2009, $327.9 billion in 2008, and$318.8 billion in 2007.License taxes or 2011 increased 2.8 percent to $51.8billion. License taxes constituted only 6.8 percent o total tax revenues in 2011.Although tax revenues provide inormation on the abil-ity o state governments to raise revenues, some typeso taxes are more refective o economic conditionsthan others. For example, the corporation net incometax and documentary and stock transer tax, two taxesthat react airly quickly to business cycles, showedincreases o 9.4 and 9.1 percent, respectively, rom2010 to 2011. Yet, these two taxes comprise only 5.9percent o total state government tax revenues.The sum o all other taxes increased 12.3 percent,including severance tax and death and git taxes, up31.2 percent and 15.4 percent, respectively.
Federal grants accounted or 34.7 percent o all stategovernment general revenue in 2011, compared to 35.5percent o state government general revenues in 2010,and 30.4 percent in 2009. Total ederal grants to stateswere up 3.4 percent rom 2010 (Figure 2).The primary source o direct revenue rom the ederalgovernment to the states was in the public welarecategory, which increased 5.3 percent compared to2010 (Appendix Table A-1). In 2011, ederal welaregrants totaled $332.6 billion, compared to $316.0billion in 2010, $280.2 billion in 2009, $240.2 billionin 2008, and $230.3 billion in 2007. These includethe two most well known public assistance programs:Temporary Assistance to Needy Families and Medicaid.Excluding the ederal monies or public welare pro-grams, ederal grants rose 0.9 percent rom 2010.Federal grants to state governments or highwaystotaled $44.2 billion in 2011, an increase o 3.0 per-cent rom 2010. These grants amounted to 7.7 percento total ederal grants to state governments in 2011.This increase in ederal grants compares to a 17.7percent increase rom 2009 to 2010.Federal grants to state governments or educationdecreased 0.9 percent to $104.6 billion, rom $105.5
Figure 1.
Source of State Government Revenue:2011
Source: U.S. Census Bureau, 2011 Annual Survey of StateGovernment Finances.
(In percent)Other8.4Federal grants34.7Taxes45.9Servicecharges11.0
Figure 2.
State Government Taxes Collected andFederal Grants Received: 2007 to 2011
Source: U.S. Census Bureau, 2007 to 2011 Annual Survey of State Government Finances.
TaxesFederal grants(In billions of dollars)757.5779.7713.5701.7757.9406.3419.2475.0555.1574.1

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