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State government expenditures exceed revenues again

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Staff writer ▼ | January 24, 2014
DollarsGeneral revenues for state governments were $1.6 trillion in 2012, a 1.8 percent decrease from $1.7 trillion in 2011, according to the latest findings on state government finances from the U.S. Census Bureau.


General expenditures by state governments fell 0.5 percent in 2012 to $1.6 trillion, down from $1.7 trillion in 2011. This is third time in the last four years that general expenditures have exceeded revenues.

A major contributor to the fall in general revenue was declining funding from federal grants. Federal grants to states totaled $514.2 billion, down 10.7 percent from $575.8 billion in 2011. (Federal grants make up 31.6 percent of states' general revenue.)

Total revenue, which includes general revenues and social insurance trust revenue such as unemployment compensation funds, fell 15.6 percent to $1.9 trillion in 2012 (down from $2.3 trillion in 2011).

"A large part of the decrease in the federal grants revenue was due to the temporary nature of funding provided through federal stimulus money beginning in mid-2009," said Lisa Blumerman, chief of the Census Bureau's Governments Division. "The 2012 Census of Governments captures the third fiscal year since the beginning of the infusion of stimulus money."

The findings are from the 2012 Census of Governments: Finance – Survey of State Government Finances, which shows revenues, expenditures, debt, and cash and security holdings for each state as well as a national summary of state government finances. The decline in total revenue in 2012 was mainly due to the $323 billion decrease in social insurance trust revenue.

Social insurance trust systems showed revenues of $263.7 billion in 2012, a drop of 55.1 percent from $586.7 billion in 2011. These systems are mainly composed of state employee retirement systems and state social insurance trust systems, including those for unemployment compensation and workers' compensation.

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