Where Local Revenues from State Governments are Declining

Across the country, many local governments and school districts have seen money from state capitols start to dry up in recent years.

Governing compiled financial data reported to the Census Bureau and compared the most recent fiscal year 2014 aggregate local intergovernmental revenue totals to averages between 2007 and 2009, when revenues peaked in most states. Nationally, total inflation-adjusted funding from states to localities and schools dipped 6 percent from prior levels. In 16 states, the cuts exceeded 10 percent.

Localities in some places were hit much harder than others. Arizona (-24 percent) and Ohio (-19 percent) recorded the largest drops in intergovernmental revenues from states, followed by Massachusetts, Hawaii and West Virginia. Only Alaska and North Dakota – two states benefitting from substantial energy revenues – reported sizable increases.

Changes in Intergovernmental Revenue from States to Localities

The following table shows total revenue from states to all local governments and school districts. Duplicative intergovernmental transactions are excluded. Figures, reported by the Census Bureau, are estimates derived from a sample of local governments in each state.

1)Amounts adjusted for inflation, shown in FY 2014 dollars.
SOURCE: Governing calculations of U.S. Census Bureau Annual Survey of State and Local Government Finances data

Historical Intergovernmental Revenues By State

Select a state to view inflation-adjusted totals flowing from states to localities and schools:

State Unrestricted General Support

Many local governments experienced larger declines in a much smaller pot of money that’s unrestricted in how it may be spent. Local governments in 17 states incurred inflation-adjusted declines in unrestricted funding exceeding 20 percent, although some rely on this money very little to begin with.

These payments include shared taxes, revenue-sharing programs and other aid unrestricted in the function or purpose of its use. Excludes aid targeted to schools or single-purpose special districts.

1)Amounts adjusted for inflation, shown in FY 2014 dollars.
SOURCE: Governing calculations of U.S. Census Bureau Annual Survey of State Government Finances data

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