Category Archives: State & Local Finance

Make Your Own Tables Of State Taxes And Expenditures With Our State And Local Finance Data Query System (SLF-DQS)

Source: Brookings Institution and the Urban Institute, Tax Policy Center

The State & Local Finance Data Query System (SLF-DQS) allows flexible presentation of data from the Census of Governments State and Local Finance series. That series contains detailed revenue, expenditure and debt variables for the United States, each of the 50 states, and the District of Columbia for 1977-2004. The data are available by type of government: state, local, state and local totals, and local government detail. All data presented are state aggregates of finance data for the selected level of government. Users can view the data along different dimensions, in real or nominal dollars, and on a per capita or fraction of personal income, general revenues or total expenditures basis. This tool is useful for comparative, single state, or time series analysis.

Who Pays for the Water Pipes, Pumps and Treatment Works? – Local Government Expenditures on Sewer and Water – 1991 to 2005

Source: Rich Anderson, Mayors Water Conference, 2007

Local government spent $82 billion to provide sewer and water services and infrastructure in FY2005, up from $45 billion in FY1992. The local government share of spending on sewer is just over 95 percent, and the state share is just under 5 percent. The local government share of spending on water supply is over 99 percent. Total spending on sewer and water from 1991-1992 to 2004-2005 is $841 billion.

The trend is for greater spending levels. Factors contributing to the increased need for investment include: population growth and land use development; an aging water infrastructure that needs constant maintenance and rehabilitation; and climate change impacts that threaten water supplies from drought; reduced snow-pack; salt water intrusion on coastal aquifers from rising sea levels; increased storms, hurricanes and flooding that require infrastructure hardening.

Local government is the primary investor in public-purpose sewer and water. Costs and spending will increase dramatically over time, and the added costs from climate change impacts are not currently included in infrastructure financing discussions. The nation’s cities need more help from the federal government and greater access to private equity to address investment needs over the next 50 years.

City Fiscal Conditions in 2007

Source: Michael A. Pagano and Christopher W. Hoene, National League of Cities, Research Brief 2007-2, October 2007

City finance officers report that the fiscal condition of the nation’s cities improved in the past year. However, as they prepare to close the books on 2007, finance officers are less optimistic, predicting a slowdown in revenues and increased spending pressures.

Related article:

Housing Downturn Takes Toll on Cities’ Revenue

Source: Monica Davey, New York Times, October 18, 2007

Federal Funding for Public Health Preparedness: Implications and Ongoing Issues for Local Health Departments

Source: National Association of County and City Health Officials (NACCHO), August 2007

From http://www.naccho.org/press/releases/pr2007_09_10.cfm:
Federal funding received by local health departments for all-hazards emergency preparedness fell 20 percent last year, according to a new report by the National Association of County and City Health Officials (NACCHO). The report says that continued cuts in funding provided through the Centers for Disease Control and Prevention (CDC) threaten important, hard-won advances made in recent years in response planning to natural disasters, bio-terrorism events, emerging infectious diseases, and other public health emergencies.
See also:
National Preparedness Month

Navigating State and Local Finances

Source: Susan Kellam, Kim Rueben, Therese J. McGuire, Urban Institute, September 28, 2007

From the abstract:
Past trends will not foretell the future, but charting how state and local finances weathered the 2001 recession suggests viable ways to navigate going forward. Lacking the deficit finance ability of the federal government, states and localities must set a spending course based on anticipated taxes and revenues. An unexpected crisis–like the stock bubble burst at the beginning of this century and the subsequent economic slowdown–that throws budgets into fiscal chaos requires such unpopular bailouts as tax increases or cuts in services and welfare. Did that happen?

State Expenditure Growth Slowing

Source: Elizabeth C. McNichol, Nicholas Johnson and Sarah Farkas, Center on Budget and Policy Priorities, July 31, 2007

State expenditure growth is projected to slow significantly for fiscal year 2008, which is the 12-month period that began July 1, 2007 in most states. During May, June, and early July, the Center on Budget and Policy Priorities conducted a phone and email survey of state legislative and executive budget officials to learn states’ actual General Fund spending for fiscal year 2006, their best estimate of fiscal year 2007 spending, and the fiscal year 2008 spending included in their recently enacted budget. The preliminary results of this survey show that in fiscal year 2008, General Fund spending will grow about 5.3 percent — well below the rates of growth in fiscal years 2006 and 2007.

State and Local Governments: Persistent Fiscal Challenges Will Likely Emerge within the Next Decade

Source: Government Accountability Office, GAO-07-1080SP, July 18, 2007

Our simulations for the state and local government sector indicate that in the absence of policy changes, large and growing fiscal challenges for the sector will begin to emerge within the next few years. … As is true for the federal sector, it is the growth in health-related costs that is a primary driver of the fiscal challenges facing the state and local government sector. In particular, two types of state and local expenditures will likely rise quickly because of escalating medical costs. The first is Medicaid expenditures, and the second is the cost of health insurance for state and local employees and retirees. Conversely, we found that other types of expenditures of state and local governments—such as wages and salaries of state and local workers, pension contributions, and investments in capital goods—are expected to grow slightly less than gross domestic product (GDP). At the same time, most revenue growth is expected to be approximately flat as a percentage of GDP. As such, the projected rise in health-related costs is the root of the fiscal difficulties these simulations suggest will occur.

FY 2007 Homeland Security Grant Program

Source: U.S. Department of Homeland Security, 2007

From the press release:
The U.S. Department of Homeland Security (DHS) announced today final Fiscal Year (FY) 2007 Homeland Security Grant Program (HSGP) awards totaling $1.7 billion, including a total of almost $411 million to the nation’s six urban areas at highest risk of a terrorist attack: New York City/Northern New Jersey; the National Capital Region; Los Angeles/Long Beach; the California Bay Area; Houston; and Chicago.

HSGP grants enhance the ability of states, territories, and urban areas to prevent, protect against, respond to and recover from terrorist attacks and other disasters. Including this funding, by the end of FY 2007, DHS will have invested $23 billion in local planning, organization, equipment, training, and exercises for state and local governments since September 11, 2001.

Making the “Internet Tax Freedom Act” Permanent Could Lead to a Substantial Revenue Loss for States and Localities

Source: Michael Mazerov, Center on Budget and Policy Priorities, July 11, 2007

Key Findings
+ Making the 1998 “Internet Tax Freedom Act” permanent — as proposed by S. 156/H.R. 743 — could adversely affect state and local government revenues, and therefore the availability of funds for important services like education, health care, and law enforcement, in three ways:
+ Potentially block states and localities from extending their normal sales taxes to music, movies, and television programming delivered over the Internet, which is rapidly becoming a major marketplace for such services.
+ Allow Internet access providers to try to escape a host of general taxes that other businesses must pay, such as sales taxes on equipment purchases;
+ Deprive nine states of $80m-$120m in annual revenues from non-discriminatory and heretofore grandfathered taxes on Internet access services;
+ The enactment of this legislation is unwarranted:
+ Studies by GAO and U. of Tennessee economists show that existing taxes on Internet access have not adversely affected household subscriptions to access or the availability of broadband access in particular locations.
+ All of the 14 developed nations that outrank the U.S. in broadband adoption do tax Internet access services. Taxation is not the issue.

Taxing the Poor: A Report on Tobacco, Alcohol, Gambling, and Other Taxes and Fees That Disproportionately Burden Lower-Income Families

Source: Michael L. Davis, National Center for Policy Analysis, NCPA Policy Report No. 300, June 2007

Press release
As Congress seeks to fund the expansion of government-provided health care for children by increasing taxes on tobacco and possibly alcohol, a new report from the National Center for Policy Analysis (NCPA) notes these taxes disproportionately impact the poor. The report notes that governments at all levels are raising revenues in a number of regressive ways, particularly through a lottery and excise taxes on products such as alcohol and tobacco and essential services such as utilities and gas.