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State and Local Finances

State and Local Finances State and local governments collect roughly half of all taxes in the United States. In 2004, state governments raised nearly $1.2 trillion in general revenues. Local governments collected almost $700 billion more. Revenue transfers from the federal government raised total funds to about $2.4 trillion or roughly 62 percent of total government spending.

Main Features of State Tax Systems: States rely on a broad range of sales, income, excise, and property taxes to finance their operations.

Make your own tables of state taxes and expenditures with our State and Local Finance Data Query System (SLF-DQS).

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.

 
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State Individual Income Tax Progressivity (tax fact)
Author: Carol Rosenberg (03/28/07)
Personal income tax systems vary widely across states, leading to different levels of progressivity. Of the forty-three states and the District of Columbia that have an individual income tax, all but eight have multiple tax brackets and rates. Even so, their systems are fairly flat.

 
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Fiscal Disparities Across States, FY 2002 (Policy Brief)
Authors: Yesim Yilmaz, Sonya Hoo, Matthew Nagowski, Kim Rueben, and Robert Tannenwald (01/02/07)
States and their local governments vary both in their needs to provide basic public services, and in their abilities to raise revenues to pay for those services. This study summarizes the Representative Revenue System (RRS) and the Representative Expenditure System (RES) frameworks and quantifies these disparities across states by comparing each state's revenue capacity, revenue effort, and necessary expenditures to the average capacity, effort, and need in states across the country.

 
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AMT Coverage by State, 2004 (Article/Tax Facts)
Authors: Leonard E. Burman and Carol Rosenberg (12/14/06)
Many taxpayers must calculate their federal income tax liability under two sets of rules: those applying to the regular income tax and those of the alternative minimum tax. If a taxpayer owes more tax under the alternative rules, then the difference is paid as AMT. The AMT hits people in some states harder than it does in others because state and local income and property taxes are not allowed as itemized deduction against the AMT and because states vary based on the income of their residents. This column discusses AMT participation rates by state and the general expansion of the AMT across all the states.


Analyzing Recent State Tax Policy Choices Affecting Low-Income Working Families: The Recession and Beyond
Author: Elaine Maag (11/15/06)
Owing to balanced budget requirements, states often raise taxes during recessions. Unless carefully crafted, these tax hikes can fall on low-income working families--the same families likely to be subject to concurrent budget cuts. During the recession that started in 2001, states utilized several tools to balance budgets including tapping rainy day funds, borrowing, increasing taxes, and cutting spending. In many cases, low-income families were shielded from tax increases by increasing or creating state Earned Income Tax Credits (EITCs). This policy brief details state tax changes affecting low-income families between 2002 and 2006.

- See posts about state and local taxes on TaxVox, TPC's blog

- See all publications related to state and local finances

- See all tax facts (background data) related to state and local finances


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