Local Government Expenditures

9 Key excerpts on "Local Government Expenditures"

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  Handbook of Governmental Accounting

  • Frederic Bogui(Author)
  • 2008(Publication Date)
  • Routledge

    (Publisher)

  These amounts are instead shown as direct expenditures at the local level. Other shares of state expen-ditures go to transportation (10%), public safety (7%), government administration (5%), and others (U.S. Bureau of the Census, Government Division, 2006). Generalizing about local expenditures is a somewhat risky enterprise. In 2002, there were nearly 88,000 local governments in the United States: counties, munici-palities, townships, school districts, or special districts (U.S. Bureau of the Census, Government Division, 2002). Local governments vary significantly in their service delivery. Some local governments, such as cities and counties, have a wide range of responsibilities. Others, primarily school districts and other special districts, are responsible for only one or a few types of programs (Nice, 2002: 28). Table 3.4 shows local expenditures in the United States in aggregate, but caution should be exercised in relating the overall pattern to each type of local government. By far, the single largest share of local spending is education, which accounts for 44% of the total direct general expenditure. The bulk of this spending is aimed at elementary and secondary education, which alone amounts to 41%. Bear in mind that almost all expenditures of this category are made by independent school dis-tricts that are set up just for education although a number of large cities may oper-ate their schools as a municipal department (Mikesell, 2003: 120). In addition, as described earlier, a considerable portion of these resources is financed by state aid, while the provision remains a critical local concern. For most cities and coun-ties, two major traditional responsibilities are public safety (police, fire, and correc-tion) and local transportation (public roads and highways) (Nice 2002: 28). “Social

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  Local Government Financial Reform in Developing Countries

  The Case of Tanzania

  • J. Boex, J. Martinez-Vazquez(Authors)
  • 2006(Publication Date)
  • Palgrave Macmillan

    (Publisher)

  12 Part of the challenge in assuring adequate funding for these local govern- ment responsibilities is that local government allocations are more or less overlooked in the budget formulation process (including the Medium Term Expenditure Framework, the Public Expenditure Review, and the NSGPR). Despite the sectoral nature of these spending programs, the central govern- ment contributions to spending at the local level are contained in a series of regional votes under PO–RALG, although they are disbursed by the Ministry of Finance to local government under a standing order. As such, there is no consistent, strong central government stewardship over these decentralized resources. 2.7 Local government administration A primary responsibility for any local government is to assure proper functioning of the local council and to meet the cost of local govern- ment administration. While some countries provide local governments with unconditional general purpose grants to cover (part of the) operational costs of local authorities, Tanzania does not provide unconditional grants to the local government level. 13 Instead, the central government provides local authorities with earmarked allocations to cover the salaries of senior local administrative staff and other (centrally approved) local government officials. Expenditures on local government administration (excluding own source spending on local administration) have grown relatively slowly over the period under consideration, slipping from almost 8 per cent of local government spending to around 5–6 per cent of local government spending. There are a number of potential factors that may have contributed to this trend. Part of the relative decrease in local administration grants over time may be explained by changes in budget classifications. While until FY 2001/02, agricultural extension services were included under the heading of local administration, in later years these resources were moved to a separate sectoral heading.

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  China's Public Finance

  Reforms, Challenges, and Options

  • Shuanglin Lin(Author)
  • 2022(Publication Date)
  • Cambridge University Press

    (Publisher)

  6 The Size and Structure of Government Expenditure 6.1 Introduction Government expenditure is a key instrument through which government seeks to achieve its economic and social goals. Adam Smith (1776) argued that the government has duties to erect and maintain a public education system, a transportation system, public infrastructure needed to support commerce, public safety, and national defense, and a justice system that protects as far as possible, every member of society from the injustice or oppression of every other member of it. He mentioned that the govern- ment should provide services that “support the whole of society.” In modern public finance, government is entrusted with more responsibil- ities, such as stabilizing the economy and promoting economic growth. The size and structure of government expenditure are important issues in public finance. The size of government expenditure is usually measured by the ratio of government expenditure in gross domestic product (GDP), and it matters for economic development. By introducing government expenditure into the production function, Barro (1990) showed that the- oretically, if government expenditure is small, an increase in government expenditure will increase the growth rate of the economy; if government expenditure is large, an increase in government expenditure will decrease the growth rate. However, Landau (1983, 1986) found that government spending negatively affects economic growth based on data from more than 100 countries. The structure of government expenditures is repre- sented by the shares of various government expenditures in total govern- ment expenditure, and it also matters. Barro (1991) showed that government consumption expenditures negatively affect economic growth and government investment expenditures are insignificantly related to 163 economic growth. De Long and Summers (1991) demonstrated a positive causal relationship between government equipment investment and GDP growth.

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  Growth and Variability in State Tax Revenue

  An Anatomy of State Fiscal Crises

  • Randall G. Holcombe, Russell S. Sobel(Authors)
  • 1997(Publication Date)
  • Praeger

    (Publisher)

  Rather, fiscal crises arise when the state's financial commitment to its programs exceeds its revenues. This chapter provides some background to show where those pressures come from, but also examines how the composition of state government expenditures has changed over the years. One thing that makes state government finance interesting to study is that every state is different, creating what David Osborne called laboratories of democracy. 1 Because some states rely much more heavily on local governments than others, it is worth looking at state and Local Government Expenditures together for many 20 Growth and Variability in State Tax Revenue purposes. Much of this chapter examines the individual components of state government spending, but first the breakdown between state and Local Government Expenditures is examined. STATE VERSUS LOCAL GOVERNMENT SPENDING Traditionally, local governments have produced elementary and secondary schools, parks, fire and police protection, and infrastructure, leaving states to produce higher education, state roads that connect localities, and environmental amenities such as state parks and ecosystem protection designed to serve more than just a local constituency. In recent decades, the importance of state government has been expanding relative to local, however. Partly, this is because the mix of goods is tilting more toward those produced by state governments, but in addition, states have seen increased revenues relative to local governments. In addition to growing state spending, another consequence of growing state revenues is an increased reliance on state funds by local governments. State aid to local governments now accounts for about 30 percent of all local revenue. Figure 2.1 shows the growth in the state component of state and Local Government Expenditures over the four decades from 1950 to 1992. In the 1950s and early 1960s state governments spent about as much as local governments. Figure 2.1 State General Expenditures

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  Local Government in the United Kingdom

  • David Wilson, Chris Game(Authors)
  • 2011(Publication Date)
  • Red Globe Press

    (Publisher)

  Technically, Current Expenditure is defined as these running costs minus Capital Financing Costs or interest paid on loans. Capital Expenditure : Spending that produces longer-term assets, often expensive, but the benefits of which will last beyond the following financial year: purchase of land, construction of buildings and roads, major items of equipment. Gross Expenditure : The total cost of providing a council’s services, before taking into account rents, fees and charges for services, and income from specific government grants. Net Expenditure: Gross expenditure minus various forms of income – fees, charges and rents set by the local authority, and central government grants. Capital Receipts: Income from the sale of capital assets. Capping: A limit placed by the government on a council’s budget, and hence on its Council Tax. Community Charge: The local flat-rate personal tax used by councils from 1990–3; also known as the Poll Tax , after similar fourteenth-century flat-rate taxes. Specific (or Ring-fenced, or Hypothecated) Grants: Central government funds distributed by individual departments to local authorities that must be spent on a specified service or programme. Most significant is the Dedicated Schools Grant (DSG) . General (or Non-selective, or Unhypothecated) Grants: Funds that may be spent at the discretion of the grantees, local authorities themselves. The general Revenue Support Grant used to be an authority’s largest single source of grant funding, but, with the arrival of DSG, this is no longer the case. sent out by their council – particularly the details of the council’s budget. If, perhaps as a student, you have no tax demand yourself, find one on Google Images, and it will probably lead you to a friendly council website and a much fuller explanation than we have space for here. With luck, you may unearth other goodies, such as a glossary or jargon-buster – a mini-version of which is provided here in Exhibit 12.1.

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  Defensible Spending for Public Schools

  • Arvid J. Burke(Author)
  • 2019(Publication Date)
  • Columbia University Press

    (Publisher)

  CHAPTER II GOVERNMENTAL SPENDING AND PUBLIC SCHOOL EXPENDITURES ANALYZING GOVERNMENTAL EXPENDITURES Difficulties of analysis. The analysis of total governmental expenditures into allotments for various purposes is necessary for understanding, appraisal, and policy formulation. The amount which can be spent for public schools depends in part upon expenditures for other governmental purposes and vice versa. For this reason local, state, and Federal analyses of governmental spending have been prepared. On the basis of such comparisons public school expenditures and other governmental expenditures have been defended and attacked. In-creases or decreases have been urged, using such evidence. Yet, there are certain limitations of the data which often make such generaliza-tions invalid. The analysis and comparison of expenditures for various govern-mental purposes involves three very serious limitations. In the first place, most governmental activities serve several purposes and all classifications are arbitrary. Secondly, most services are provided by overlapping units of government, or more than one unit participates in their financing. And finally, the compilation of statistics is made difficult and inexact owing to differences in definitions, accounting, records, and reports. There are few governmental activities which promote only one pur-pose. Most of them have multiple objectives, many of which are the same as those of some other governmental service. Public education, hospitals, public health, sanitation, water supply, recreation, and public assistance to the disabled and unemployed are all classified as separate activities, but they all promote health. Education, police protection, fire protection, traffic control, highways, correction, health, sanitation, water supply, and public assistance, all help pro-tect life.

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  English Local Government

  • Herman Finer(Author)
  • 2019(Publication Date)
  • Columbia University Press

    (Publisher)

  But economy in this sense is equally consistent, not with less, but with more, expenditure by public authorities. The ultimate questions are the respective values of the ends to be pursued, and the relative efficiency of the organization and incentives of private and public enterprise. They involve subtle analysis and delicate weighings, and they are not to be settled, though they may be prejudiced, by im-passioned bellowing in the market-place. 1 The Measurement of Economical Service. Now control over expenditure is impossible without measurement. But the measurement of the economy of State and municipal services is extremely difficult. We need a mature and continuous review of 1 The reader ought not to fail to study the investigation—its principles of analysis and economy—of The Committee, on the Expenditure of Local Authorities, Cmd. 4200, 1932. 26 372 ENGLISH LOCAL GOVERNMENT every sub-item to appreciate the intensity of the want for it. Then we must ask whether the amount supplied is worth what we pay for it. There are certain factors in municipal administration making analysis of purpose and costs especially necessary. Not all local coun-cillors are experts—they require detailed instruction. Councillors and officials are not responsible in their own pockets for profit and loss; that stimulus is lacking; and the fear of losing votes and sheer devotion to public duties do not yet supply an adequate alternative. Further, the citizens are not yet enlightened enough to balance what they are getting against what they must pay. Finally, the nature of the social services is such as to make quantitative expression in £ s. d. of the good done or the amount spent difficult, and sometimes impossible. 1 This difficulty has, in fact, retarded the development of adequate cost accounting.

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  Public Expenditure Decisions in the Urban Community

  • Howard G. Schaller(Author)
  • 2016(Publication Date)
  • Routledge

    (Publisher)

  3 Intergovernmental Aspects of Local Expenditure Decisions

  by Selma J. Mushkin1

  Many considerations enter into urban decisions for public services. Among these considerations is the "hard" tax dollar, against which are weighed: the budget of the previous year, cost-benefit comparisons at the margin, and the "Social-Problem-of-the-Year," carved out and dramatized in presidential and gubernatorial messages. Decisions about urban public services are influenced, too, by grants-in-aid from state and national governments. In this paper, we shall explore some of the issues raised by two questions about grants-in-aid: What restrictions do they impose upon local decisions? And, can grant programs be amended to achieve a more effective and efficient use of resources?

  Quantitative Importance of Grants-in-Aid

  Before taking up these questions, we shall briefly examine the nature of grants-in-aid and the amount of grant support of local expenditures.

  The basic notion of the grant-in-aid is simply to provide a device for keeping program administration and. decision making "close to the people" and to broaden the financial resources available for program support. A similar device is the shared tax which makes available to a community for expenditure, in accord with the decisions of local citizens, tax sources that can be administered more effectively and efficiently by a larger governmental unit. Use of superior taxing power for revenue raising purposes only, suggests a distribution of the proceeds of the tax back to the area in which it was paid. Use of the grant to further public programs requires a distribution proportionate to some measure of program need. The rapid extension of grants during the depression of the '30's, when local property tax revenues dropped off sharply, largely accounts for the fusion of tax-sharing schemes with grants-in-aid. State sales and income tax levies were adopted at that time to meet the fiscal crisis; revenues from these levies were shared frequently with local communities as amounts earmarked for specific program expenditures. A part of the funds was distributed on the basis of need, a part in accord with the place of origin of the tax.

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  Municipal Finances

  A Handbook for Local Governments

  • Catherine Farvacque-Vitkovic, Mihaly Kopanyi(Authors)
  • 2014(Publication Date)
  • World Bank

    (Publisher)

  However, shortly after this local tax was imposed, the pres- ident abolished it to boost his popularity as he sought reelection in 2006. Kampala and other local governments were denied a source of locally generated revenue because of political pressure from a politician at center. Political interference is not restricted to devel- oping nations. For example, in the United States, in 2003, the governor of the state of Virginia extended the time that a person must spend in jail after three drunken driving arrests from five days to 15 days. But the local jails are not administered by the state government; they are administered by county governments Thus the directive from the state imposed additional costs on localities that were required to house people in jail for longer periods. Takeaway Messages Key messages from this chapter include the following: • Expenditure management should be seen and performed in a cycle of policy setting, plan- ning, execution analysis, and audit, which feeds into the next cycle and policy setting. • Effective expenditure management requires close and timely monitoring and analysis of both operating and capital expenditures, com- paring clear and measurable targets to solid baseline data, and initiating corrective actions as required. • Monitoring and evaluation not only measure and control results but also facilitate cost con- trol and decision making, for example, about whether or not to contract out specific services. • A number of well-tested, effective instruments are useful for expenditure analysis, including plan/actual variance analysis, forecasting, and benchmarking results to local, national, or inter- national indicators. Net present value, internal rate of return, and cost-benefit analysis are among the most important techniques applied along with a rigorous sensitivity analysis. • Setting, monitoring, and controlling tariffs are vital elements of effective expenditure management.

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