What Is Funded by State Taxes?
When most people talk about government spending, they refer to the federal government, which spends more than $2 trillion per year. State governments, by contrast, receive far less attention ; the 50 state governments collect billions in taxes each year.
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How Much is Collected?
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Data from the U.S. Census Bureau for 2007 showed that the 50 states collected nearly $750 billion in taxes.
Function
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The four major categories of expenditures that are funded by state taxes are education (including elementary/secondary and higher education), public welfare, health care, and transportation, such as state roads and highways.
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Significance
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Education was the largest recipient of state tax funding. Overall, education accounted for more than 35 percent of state spending. Elementary and secondary education accounted for about 25 percent of state spending, while higher education consumed another 12 percent.
Healthcare
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Health care expenditures accounted for about 14 percent of state spending. States fund health care for low-income families through such programs as Medicaid and the Children's Health Insurance Program (CHIP).
Considerations
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Rising health care costs have forced states to spend increasing amounts of tax revenue on health-care related expenses.
Identification
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Transportation, which includes state roads and bridges as well as public transit systems, accounts for about 7 percent of state spending. Prisons and corrections programs make up another 5 percent.
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