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US state government revenues decline by nearly 31 per cent.

Total state government revenue dropped to $1.1 trillion in 2009, a decline of 30.8 per cent from $1.6 trillion in 2008, according to the latest findings from the US Census Bureau. The large decrease in total revenue was mainly caused by the substantial decrease in social insurance trust revenue.

Social insurance trust revenue is made up of four categories - public employee retirement, unemployment compensation, workers compensation and other insurance trusts (i.e., Social Security, Medicare, veteran's life insurance).

State governments received nearly $1.5 trillion in general revenues in 2009, a decrease of 1.4 per cent from 2008. General revenue does not include utility, liquor store or insurance trust revenue.

Total taxes collected in 2009 ($715.1 billion), which accounted for 47.9 per cent of general revenue, fell by 8.5 per cent from $781.6 billion in 2008. This is the first year-to-year decline in tax revenue since 2002. Federal grants ($477.7 billion) increased 12.9 per cent from 2008 to 2009 and accounted for nearly one-third of general revenue.

The findings come from the 2009 Annual Survey of State Government Finances , which reports revenues, expenditures, debt, and cash and security holdings for each state as well as a national summary.

While tax revenue declined substantially, total federal grants to states increased 12.9 per cent to $477.7 billion. Federal grants for welfare programmes made up 59.3 per cent of all federal grants received in 2009 and increased 16.3 per cent to $283.3 billion over 2008, compared with only 4.3 and four per cent year-to-year increases in 2008 and 2007, respectively.

General expenditures by state governments rose by three per cent in 2009 over 2008. These expenditures totaled more than $1.5 trillion, with expenditures for education ($562.1 billion), public welfare ($437.5 billion) and health and hospitals ($119.1 billion) representing the top three activities.

State government spending on education totaled more than 40 per cent of general expenditures in 15 states led by Georgia (46.1 per cent), Utah (45.6 percent) and Alabama (45.3 per cent).

State government spending on public welfare was greater than 30 per cent of general expenditures in 11 states, led by Minnesota (37.5 per cent), Rhode Island (36.5 per cent) and Maine (36.1 per cent).

The leading states in spending for highways, as a percentage of general expenditures, were Alaska (13.5 per cent), North Dakota (13.4 per cent) and South Dakota (12.9 per cent).

Hawaii (12.3 per cent) led the states in spending on public health and hospitals as a percentage of general expenditures, followed by Connecticut (11.4 per cent) and Virginia (10.9 per cent).

For the 42 states with lotteries, ticket sales totaled $52.3 billion in 2009, compared with $52.7 billion in 2008. Lottery prizes awarded totaled $32.2 billion, and lottery proceeds were $17.7 billion. The top three states in lottery ticket sales were New York ($6.8 billion), Massachusetts ($4.2 billion) and Florida ($3.7 billion). The same states also ranked highest in prizes awarded; New York awarded ($4 billion), Massachusetts ($3.2 billion) and Florida ($2.3 billion).

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Publication:CPI Financial
Date:Jan 11, 2011
Words:551
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