How Much Of The Government's Money Is Going Towards Welfare 2016 America

Land and local governments spent $3.three trillion on direct general government expenditures in fiscal year 2019.^one States spent $1.6 trillion directly and local governments—cities, townships, counties, schoolhouse districts, and special districts—spent $1.viii trillion directly (the numbers do not sum to the combined total because of rounding).^two

While state governments raised more revenues than local governments in 2019, local governments' direct expenditures were larger than states' because localities often administer programs with funds transferred from land governments. In 2019, states transferred over $568 billion to local governments. This full includes indirect funds from the federal government, frequently referred to as pass-through grants. For instance, the federal government sends uncomplicated and secondary education funds to land governments, then state governments transfer the money to local governments which spend the dollars on local education programs.

Nearly state and local government spending falls into one of seven categories: elementary and secondary pedagogy, public welfare (which includes nigh Medicaid spending), higher education, health and hospitals, highways and roads, criminal justice (which includes spending on police, corrections, and courts), and housing and community evolution.

What exercise state and local governments spend money on?
How does state spending differ from local spending?
How have state and local expenditures changed over time?
How and why does spending differ across states?

What do state and local governments spend money on?

State and local governments spend nigh of their resources on education, health, and social service programs. In 2019, near one-third of land and local spending went toward combined simple and secondary education (22 percent) and higher education (9 per centum).³ (Demography'southward information on higher education expenditures include both spending funded by revenue enhancement revenues and student tuition and fees. See our higher education backgrounder for more data.)

Some other 22 percent of expenditures went toward public welfare in 2019. Public welfare includes spending on means-tested programs, such as Medicaid, Temporary Assist for Needy Families, and Supplemental Security Income.⁴ Spending on health and hospitals was another 10 percent of land and local direct expenditures.

State and Local Direct General Expenditures

Medicaid constitutes a big and growing portion of state spending. However, Census does not dissever Medicaid spending into its ain category. Instead, nigh Medicaid spending is accounted for under the public welfare category with some spending counted as hospital expenditures.⁵

The National Association of State Budget Officers (NASBO) estimates that in fiscal year 2021 Medicaid lonely accounted for near 27 percent of total state spending—upwards from xx percent in 2008. (Both of these totals include the federal share of Medicaid spending.)⁶

Highway and road spending was 6 percent of land and local direct general expenditures in 2019. Looking at criminal justice expenditures individually, police spending was 4 percent of state and local direct general expenditures, corrections spending was iii percent, and court spending was ii percent. Housing and customs evolution expenditures accounted for another 2 percent of state and local direct full general expenditures.

Near of the remaining 22 percent of state and local straight expenditures in 2019 went toward these programs:

financial administration and central staff services (v pct)
involvement on debt (3 percent)
sewerage (2 percent)
local fire protection (ii percent)
parks and recreation (1 percent)
natural resources services (1 percentage)
air transportation (1 percent)
solid waste management (ane percent)
public buildings, libraries, and water transportation (each expenditure accounted for less than 1 percent)

The rest was generally miscellaneous expenses not elsewhere classified past Census.

How does land spending differ from local spending?

States and local governments provide different mixes of services, which are reflected in their direct full general expenditures.

State verse Local Expenditure

Elementary and secondary education is a far larger share of straight local authorities spending than than land spending. In 2019, twoscore percent of direct local government spending went to simple and secondary education versus less than 1 percent of directly state spending. Still, while local governments overwhelmingly spent these dollars direct, much of that money came from state and federal funds.^vii In total, during the 2017-2018 school year, states provided 47 percent of overall elementary and secondary education funding, local governments provided 45 percentage, and the federal regime provided 8 percent.^eight

Meanwhile, higher education was a far larger share of state direct spending (17 per centum) than local regime directly spending (3 percentage) in 2019.

Similarly, states also straight spent a far higher percentage of their budgets on public welfare expenditures than local governments. In 2019, 43 per centum of states' direct full general expenditures went toward public welfare, the largest straight expenditure as a share of state spending. Local governments spent merely 4 percent on public welfare. Much of public welfare spending is Medicaid spending, which is jointly funded by states and the federal government but administered by state governments (and local governments in a few states).

State governments also spent more directly on highways and roads (8 percent) than local governments (4 percent), while local governments spent a larger share of their budgets on police (six percent) than country governments (1 per centum). Direct spending on health and hospitals (9 percent of state budgets and 10 percent of local budgets) was roughly equal at the two levels of government.

How have state and local expenditures changed over time?

From 1977 to 2019, in 2019 aggrandizement-adjusted dollars, land and local government spending increased from $1.2 trillion to $iii.3 trillion, a 190 percent increment. Real per capita expenditures increased from $5,238 to $10,161, a 94 pct increase, over the same period.

Although spending in all major categories increased over the menstruum, the per centum change in state and local directly general expenditures varied. For example, state and local regime spending on public welfare, in 2019 inflation-adjusted dollars, increased past 411 percent between 1977 and 2019, by far the almost of any major expenditure. Medicaid is responsible for almost of the increase in total state and local public welfare spending, but the federal share of Medicaid spending also increased over this menstruum, from 55 percent of Medicaid spending to 65 percent.⁹ Related, health and hospital spending grew 231 percent from 1977 to 2019. Meanwhile, elementary and secondary education spending grew 138 percentage between 1977 and 2019.

State and Local Expenditures

Higher educational activity spending grew 184 percentage, but changes in higher education spending are complicated by the increasing share of tuition payments every bit a funding source. Police spending grew 179 percent between 1977 and 2019. Among these major expenditures, highway and route spending grew at the slowest footstep, 108 percent, from 1977 to 2019.

How and why does spending differ across states?

State and local governments spent $10,161 per capita in 2019, but per capita direct spending varies widely beyond states.

Among us, Alaska had the highest per capita state and local spending in 2019 at $17,596, followed by New York ($15,667) and Wyoming ($15,107). As is typical, the District of Columbia'southward per capita spending exceeded all states at $21,066.¹⁰ Arizona ($vii,251) and Georgia ($seven,280) had the lowest per capita spending in 2019.

State and Local Expenditures

Data: View and download each state's per capita direct general expenditures

Differences in spending arise from variations in geography, demographics, history, and other external factors. They can too arise from state policy choices, such every bit generosity of service levels, eligibility rules for social services, or tax policy. For example, New York has relatively high elementary and secondary instruction spending fifty-fifty though information technology has relatively few schoolhouse-age children for its overall population and a bigger share of kids in individual schoolhouse than well-nigh states.¹¹ Only New York'southward per capita spending is relatively high because it has more teachers per student enrollment and college teacher salaries than most states.¹² In dissimilarity, Idaho has a relatively high number of school-age children to educate for its overall population and a high charge per unit of attendance in public schools, simply it has relatively low per capita education spending considering information technology employs fewer teachers per educatee and has lower payroll costs than almost states.¹³

Interactive Data Tools

State and Local Finance Data: Exploring the Census of Governments

Country Fiscal Briefs

What everyone should know about their land's budget

Notes

³The Census counts state expenditures on scholarships and other educational subsidies under a separate category that includes subsidies for higher and Yard–12 education combined. The lawmaking (J19) includes, for case, individual scholarships for college didactics and institutional assistance to individual K–12 charter schools.

⁷See William A. Fischel, Schoolhouse Finance Litigation and Property Tax Revolts: How Undermining Local Control Turns Voters Abroad from Public Education, Working Newspaper WP98WF1 (Washington, DC: Lincoln Institute of Land Policy, 1998); also Sheila Murray and Kim Rueben, Schoolhouse Finance Over Time: How Changing Structures Affect Support for K–12 Education, Policy working newspaper WP07SM1 (Cambridge, MA: Lincoln Institute of State Policy, 2007).

Source: https://www.urban.org/policy-centers/cross-center-initiatives/state-and-local-finance-initiative/state-and-local-backgrounders/state-and-local-expenditures

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