About Local Government Finances

How have aggregate local government expenditures changed over time?

Aggregate local government general current expenditures rose steadily from $448 billion in 1977 to $1.2 trillion in 2009 (in constant 2010 dollars), an increase of 177 percent. Over this period, local expenditures varied from approximately 7 to 9 percent of GDP. Local government expenditures, when viewed as a percentage of GDP, have remained quite flat, indicating that they generally kept pace with the growth of the broader economy.

LOADING...

Source: GAO Analysis of U.S. Census Bureau Government Finance Statistics. Although the original sources for finance statistics are accounting records of governments, the data derived from them are purely statistical in nature. Consequently, the Census Bureau statistics on government finance cannot be used as financial statements or to measure a government's fiscal condition.

Note: The components of general current expenditure include current operations, interest on debt, assistance and subsidies, and intergovernmental expenditures.

Local Government General Current Expenditures (1977-2009): TXT PDF

Source: GAO Analysis of U.S. Census Bureau Government Finance Statistics. Although the original sources for finance statistics are accounting records of governments, the data derived from them are purely statistical in nature. Consequently, the Census Bureau statistics on government finance cannot be used as financial statements or to measure a government's fiscal condition.

Note: The components of general current expenditure include current operations, interest on debt, assistance and subsidies, and intergovernmental expenditures.

Local Government General Current Expenditures as a Percentage of GDP (1977-2009): TXT PDF

What are the key categories of local expenditures and how have they changed over time?

While local government expenditures for many categories were relatively consistent from 1977 to 2009, the two largest categories of expenditures, educationEducation (Local Expenditures):
includes elementary and secondary education, higher education auxiliary enterprises, other higher education (degree-granting institutions operated by state or local government), state government scholarships and other subsidies, and federal and state other education (special programs and institutions primarily for training and education of the blind, deaf, or other people with disabilities).
and public safetyPublic Safety (Local Expenditures):
includes correctional institutions, other corrections, local fire protection, judicial and legal, police protection, and protective inspection and regulation.
, increased considerably. During this time period, local government expenditures for education increased by 165 percent from $205 billion in 1977 to $543 billion in 2009 (in constant 2010 dollars). Expenditures for public safety also grew significantly over the time period from $45 billion in 1977 to $168 billion in 2009. Other categories in the top six local expenditures were health careHealth Care (Local Expenditures):
includes health (provision of services for the conversion and improvement of public health, other than hospital care, and financial support of the government’s health programs) and hospitals (expenditures related to the government’s own hospitals as well as expenditures for the provision of care in other public or private hospitals).
(which excludes Medicaid and Medicare), natural resourcesNatural Resources (Local Expenditures):
includes agriculture, state fish and game, federal and state forestry, other natural resources (water resources, mineral resources, regulation of industries, products, and establishments), parks and recreation, sewerage, and solid waste management.
, public welfarePublic Welfare (Local Expenditures):
includes federal categorical assistance programs, other cash assistance programs, payments to Medicare trust fund, vendor payments for medical care, vendor payments for other purpose, institutions, other (expenditures not classified elsewhere), veteran’s bonuses, and federal and state veteran’s services.
(which includes Medicaid), and public servicePublic Service (Local Expenditures):
includes miscellaneous commercial activities, financial administration, federal and state legislative, central staff services, general public buildings, libraries, and social insurance administration.
.

Source: GAO Analysis of U.S. Census Bureau Government Finance Statistics. Although the original sources for finance statistics are accounting records of governments, the data derived from them are purely statistical in nature. Consequently, the Census Bureau statistics on government finance cannot be used as financial statements or to measure a government's fiscal condition.

Note: The components of general current expenditure include current operations, interest on debt, assistance and subsidies, and intergovernmental expenditures.

Select Local Government Expenditures (1977-2009): TXT PDF

How has aggregate local government revenue changed over time?

Aggregate local government general revenue rose from $526 billion in 1977 to $1.4 trillion in 2009 (in constant 2010 dollars), an increase of 168 percent. As a proportion of GDP, local government revenue was just under 9 percent in 1977 and increased to 10 percent in 2009.

Source: GAO Analysis of U.S. Census Bureau Government Finance Statistics. Although the original sources for finance statistics are accounting records of governments, the data derived from them are purely statistical in nature. Consequently, the Census Bureau statistics on government finance cannot be used as financial statements or to measure a government's fiscal condition.

Note: The components of general revenue are own-source revenue (taxes, charges, miscellaneous revenue, etc.) and intergovernmental revenue (revenues received from federal and state governments).

Local Government General Revenue (1977-2009): TXT PDF

Source: GAO Analysis of U.S. Census Bureau Government Finance Statistics. Although the original sources for finance statistics are accounting records of governments, the data derived from them are purely statistical in nature.

Note: The components of general revenue are own-source revenue (taxes, charges, miscellaneous revenue, etc.) and intergovernmental revenue (revenues received from federal and state governments).

Local Government General Revenue as a Percent of GDP (1977-2009): TXT PDF

What are the key sources of local government revenue and how have they changed over time?

From 1977 through 2009, the largest sources of local government revenue were state assistanceState Assistance (Local Revenues):
grants from the state government to the local government for a variety purposes, including public welfare, education, and transportation.
, property taxesProperty Taxes (Local Revenues):
taxes imposed on ownership of property and measured by its value. Three types of property taxes, all having in common the use of value as a basis for the tax: general property taxes, special property taxes, and taxes based on incomes produced by property.
, and licensing fees and chargesLicensing Fees and Charges (Local Revenues):
alcoholic beverage license, amusement license, corporation in general license, hunting and fishing license, motor vehicle license, motor vehicle operators license, public utilities, occupant and business license, other license taxes, and all other general current charges.
. Sales taxes grew faster than other revenue sources. The largest local government revenue source, state aid, grew from $177 billion in 1977 to $476 billion in 2009 (in constant 2010 dollars). Other categories making up the top six local revenue sources are other taxes and miscellaneous revenueOther Taxes and Miscellaneous Revenue (Local Revenues):
includes death and gift taxes, documentary and stock transfer taxes, severance taxes, special assessments, sale of property, interest earnings, state government—other dividends, fines and forfeits, rents, royalties, donation from private sources, net lottery revenue, and miscellaneous general revenue.
, sales taxesSales Taxes (Local Revenues):
taxes applicable with only specified exceptions (e.g., food and prescribed medicines) to sales of all types of goods and services or to all gross receipts, whether at a single rate or at classified rates; and sales use taxes.
, and federal assistanceFederal Assistance (Local Revenues):
grants from the federal government made directly to the local government. These grants do not include funds that come from federal government that are passed to states.
.

Source: GAO Analysis of U.S. Census Bureau Government Finance Statistics. Although the original sources for finance statistics are accounting records of governments, the data derived from them are purely statistical in nature. Consequently, the Census Bureau statistics on government finance cannot be used as financial statements or to measure a government's fiscal condition.

Note: The components of general revenue are own-source revenue (taxes, charges, miscellaneous revenue, etc.) and intergovernmental revenue (revenues received from federal and state governments). These data represent the aggregate for the sector. Local governments receive a wide variety of revenues from diverse sources, which can impact their fiscal condition. For example, Boston's major revenue source is property tax, while Philadelphia's largest source is a wage tax, and Phoenix's is sales tax.

Select Local Government General Revenue (1977-2009): TXT PDF