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State Government Finances Summary 2011

State Government Finances Summary 2011

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U.S. Department o Commerce
 
Economics and Statistics Administration
U.S. CENSUS BUREAU
census.gov 
State Government Finances Summary: 2011
Governments Division Briefs 
December 2012
G11-ASFIN
By Cheryl H. Lee, Mara Beleacov, and Nancy Higgins
INTRODUCTION
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).
1
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
 
DID YOU KNOW?
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.
1
Throughout this report, all reerences to years (i.e., 2010 or 2011)reer to scal years.
 
2
U.S. Census Bureau
operated by 17 state governments.
2
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.
3
 
STATE GOVERNMENT FINANCES SUMMARY
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.
•Stategovernmentgeneralrevenuetotaled
$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).
•Stategovernmentgeneralexpenditurein2011
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
2
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.
3
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.
•Stategovernmenttotaldebt(includinglongterm
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).
•Cashandinvestmentholdingstotaled$3,663.9
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.
STATE GOVERNMENT REVENUE
Taxes
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
DID YOU KNOW?
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 INTERGOVERNMENTAL REVENUES
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.
20112010200920082007
TaxesFederal grants(In billions of dollars)757.5779.7713.5701.7757.9406.3419.2475.0555.1574.1

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