Summary: This fact sheet presents data on aggregate state and local government revenues, expenditures, and related variables during the 30-year period from 1961 to 1990. Federal aid to state and local governments only began in the 1960s, so this timeframe helps put in perspective the recent policy changes of the 1980s. GAO found that the state-local sector is running a deficit in financing its current service operations--one that is approaching a record high for the 30-year period--and state-local tax burdens continue to rise and have also reached a 30-year high. On the expenditure side, state and local governments are increasingly picking up the tab for U.S. domestic expenditures. Health care spending is the most rapidly growing area in state-local budgets. Real levels of spending for cash assistance and capital investment have been virtually flat during the past three decades. On the revenue side, federal support to state and local governments leveled off in the late 1970s and has been declining ever since. Such revenues have increasingly shifted toward Medicaid and away from most other areas, especially investments in transportation, job training, and community and regional development. Personal income and general sales taxes have been the most rapidly growing sources of revenues generated by state-local governments themselves. Despite a brief decline in the late 1970s, local property tax revenues have resumed the steadily upward rise seen in the 1960s.
