Local government revenues and expenditures, size and structure with special focus on the local-central relation in  education and transport in the United States

Outline Fiscal division between Federal State and Local revenues and transfers. Source of Local&State tax revenue Sources of Federal tax revenue Federal to State&Local transfers Local and state tax deductions (SALT) and Tax reform Education spending organization Infrastructure spending organisation

Federal State and Local Budgets Total Government Spending in the United States   Fiscal Year 2018     Federal Gross Spending     $4.1 trillion     Intergovernmental  transfers    $-0.7 trillion  State Direct Spending     $1.9 trillion  Local Direct Spending     Total Spending     $7.2 trillion 

State State-Local Tax Burden as a Percent of State Income Rank U.S. Average 9.9%   Alabama 8.7% 39 Alaska 6.5% 50 Arizona 8.8% 36 Arkansas 10.1% 17 California 11.0% 6 Colorado 8.9% 35 Connecticut 12.6% 2 Delaware 10.2% 16 Florida 34 Georgia 9.1% 32 Hawaii 14 Idaho 9.3% 26 Illinois 5 Indiana 9.5% 22 Iowa 9.2% 31 Kansas 23 Kentucky 24 Louisiana 7.6% 45 Maine 13 Maryland 10.9% 7 Massachusetts 10.3% 12 Michigan 9.4% 25 Minnesota 10.8% 8 Mississippi 8.6% 41 Missouri 29 Montana 38 Nebraska 30 Nevada 8.1% 43 New Hampshire 7.9% 44 New Jersey 12.2% 3 New Mexico 37 New York 12.7% 1 North Carolina 9.8% 20 North Dakota 9.0% 33 Ohio 19 Oklahoma 40 Oregon 10 Pennsylvania 15 Rhode Island 9 South Carolina 8.4% 42 South Dakota 7.1% 49 Tennessee 7.3% 47 Texas 46 Utah 9.6% 21 Vermont 11 Virginia 27 Washington 28 West Virginia 18 Wisconsin 4 Wyoming 48 DC 10.6% (10)

SALT state and local tax deduction

What is the purpose of state level deductions to federal taxes SALT deductions existed in the tax code since introduction of federal income taxes in 1913 and allowed for deduction of local and state taxes in federal tax calculation. This creates a situation that it is a a regressive tax break at the federal level.As a form of revenue-sharing, it disproportionately helps rich states .It reduces the tax base and requires higher federal income tax rates.California recives over 20% of SALT deductions while it only 14.17% of the national GDP due to very high state and local taxation level and high property prices that due to old deductions created a big drain on federal tax burden for citizens of such states like Ilinois New York or California. Eliminating it without a real replacement like equalization payments would strain state budgets and put extra burden on buisnes and individuals in high tax states. Getting rid of it doesn’t enable less economic distortion through lower tax rates; it keeps income taxation roughly constant but shifts it from states to the federal government.Getting rid of SALT allows GOP to balance the tax cuts in tax reform and this allowed for passing the vote without 60 votes due to budget neutral nature of the bill.

Infrastructure spending

Education Spending Of an estimated $1.15 trillion being spent nationwide on education at all levels for school year 2012- 2013, a substantial majority will come from State, local, and private sources. This is especially true at the elementary and secondary level, where about 92 percent of the funds will come from non- Federal sources.

Rep. Massie Introduces Bill to Abolish Federal Department of Education WASHINGTON, D.C. – Representative Thomas Massie introduced H.R. 899, a bill to abolish the federal Department of Education. The bill, which is one sentence long, states, “The Department of Education shall terminate on December 31, 2018.” ​The Department of Education began operating in 1980. On September 24, 1981 in his Address to the Nation on the Program for Economic Recovery, President Ronald Reagan said, “As a third step, we propose to dismantle two Cabinet Departments, Energy and Education.

DOE during government shutdown in 2013 deemed 94% of it’s Staff as not essential.  Contingency Plan for Lapse in FY 2014 Appropriation Department of Education „If the interruption were to last longer than one week, the Department would phase in employees only as necessary to conduct other excepted activities to prevent significant damage to the underlying activity.  At most, a total of not more than 6 percent of the total staff would be called back to work during a longer interruption.  (Some employees would be called in on a partial or rotating basis; the combined number of excepted employees working at any given time would not exceed approximately 6 percent of the Department’s total full-time equivalents (FTEs).)  As of September, the Department employed 4,225 full and part-time employees.” EXCEPTED POSITIONS WEEK 1 WEEK 2 – WEEK 4 Necessary to protect life or property (not separately reported in 1996) 23 Presidential appointees (PAS) 10 Excepted to support the Secretary/Deputy Secretary/Under Secretary 11 Excepted to support other Presidential appointees 7 Direct Loan and Pell Grants 138 (TBD) 146 (TBD) Excepted for authorized payments and obligations 23 (TBD) 45 (TBD) TOTAL __212_ _242_