This report (1) briefly describes the way in which Census Bureau statistics on governmental finances are collected, (2) provides some guidelines concerning the use of these statistics, (3) defines some of the terms used in classifying governmental finances, and (4) lists the major publications on state and local governments issued by the Census Bureau.Public Economics,

Waldo, Arley D.

Yoho, Carole B.

English

Research Papers in Economics

Staff Paper P76-9 March 1976
USING CENSUS BUREAU STATISTICS
ON GOVERNMENTAL FINANCES
by
Arley D. Waldo and Carole B. Yoho
Staff Paper Series
Department of Agricultural and Applied Economics
Umversity of Minnesota
St. Paul, Minnesota 55108Arley D. Waldo is a professor and extension economist in publlc
policy and Carole B. Yoho M an associate professor and extension spe -
clalist m public policy in the Department of Agricultural and Applled
Economics, Umversity of Minnesota, St. Paul.
This report was prepared as a part of the public pollcy education
program of the University of Minnesota Agricultural Extension Service.
Single copies are avadable on request from:
Public Policy Education Program
317 Classroom Office Building
Umverslty of Mumesota
St. Paul, Minnesota 55108
Staff papers are published without formal review within the Department
of Agricultural and Applled Economics.USING CENSUS BUREAU STATISTICS
ON GOVERNMENTAL FINANCES
by
Arley D. Waldo and Carole B. Yoho
The U, S. Bureau of the Census collects and publishes a substan-
tial amount of data on governmental finances. These statistics are
widely used to describe and compare the revenue systems and expen-
diture patterns of state and local governments. This report (1) briefly
describes the way in whmh Census Bureau s tatlstlcs on governmental
finances are collected, (2) provides some guidelines concerning the
use of these statmtics, (3) defines some of the terms used m classifying
governmental finances, and (4) lists the major publications on state and
local governments issued by the Census Bureau.
Sources and Methods
Information on governmental finances and employment is compiled
regularly by the Governments Division of the U. S. Bureau of the Census.
One of the advantages of Census Bureau statistics is that they are based
on a uniform classification of state and local financial data. This makes
it easier to compare the finances of different states.
State government information is based on an annual Census Bureau
survey. State financial data are compiled from official state reports
and records by representatives of the Census Bureau. Local govern-
ment information is estunated from a random sample of approximately
16,000 units of local government. Information on local governments m,
therefore, subject to sampling error. Because state government figures
are not subject to samplmg variability, aggregate state-local lhgures
are more reliable than local government estimates alone.
State and local financial data are grouped on a July 1 to June 30
fiscal year basis. Most state governments and school districts operate3
This compar~son shows that revenue from state and local sources
per $1,000 of personal income was much higher m IVhnnesota than m
North Dakota. Does ths suggest that Minnesota is a “high tax” state
and North Dakota, a “low tax” state? Not necessarily. A comparison
based on mformatlon for 1973 shows only a small dl~ference between
the two states.
State and Local General
Revenue from Own Sources
Per $1,000 of Personal
Income, 1973
Rank Among
Amount All States .-
Minnesota $193.63 4
North Dakota $184.44 7
Total revenue from state and local sources increased in both
states from 1973 to 1974--by 8.8 percent m Minnesota and 17. !j
percent in North Dakota. However, these increases were more than
offset by increases m personal income. Personal income rose by
19.5 percent in Minnesota and 54.3 percent in North Dakota. Conse -
quently, revenue from state and local sources per $11,000 of personal .—
income was lower m 1974 than m 1973 in both states. The figure for
North Dakota dropped more th= the figure for Minnesota because
income increased much more m North Dakota. The larger increase in
income m North Dakc)ta was due to two factors: (1) nationally, farm
income increased much faster than nonfarm income, and (2) farm in-
come is a much larger component of total personal income m North
Dakota than m Mmnes eta.
4. Be cautious when compamn g figures for local governments .—
alone or for state governments alone.
For example, suppose you are comparing per capita local govern-
ment taxes m Minnesota and South Dakota.
Per Capita Tax Revenue
of Local Governments,
1974
Amount .—
Minnesota $225.30
South Dakota $276.10This comparmon shows that per capita local government tax reve-
nue M higher in South Dakota than m Minnesota. But this tells nothing
about how state-collected taxes compare.
Per Capita Tax Revenue
of State Governments,
1974
Amount
Minnesota $470.54
South Dakota $242.82
A comparison of taxes collected by state governments shows per capita
state tax revenue m Minnesota to be nearly twice as high as m South
Dakota. States vary widely m the relatlve amounts of tax revenue
raised at the local and state level.
5. When comparmg tax levels, you w1ll usually want to include
both tax revenue and revenue from charges for public ser -
and
vices and other state and local sources of non-tax revenue.
Suppose you are comparmg per capita tax burdens in Minnesota
Massachusetts and you include only tax revenue.
Per Capita State and
Local
Minnesota
Massachusetts
This comparison shows that per capita state and local tax revenue was
‘Tax Revenue,
1974
Amount
$695.84
$766.68
higher m Massachusetts than m Minnesota. But Minnesota relies more
than Massachusetts on revenue from charges for public services and
other non-tax sources. If you count both taxes and charges, you fmd
the following:
Per Capita State and
Local General Revenue
from Taxes and Other State
and Local Sources, 1974
Amount
Minnesota $900.71
Massachusetts $889.085
This comparison shows Minnesota leading Massachusetts. States vary
widely in the extent tc) which they rely upon non-tax revenue sources.
6. When compa ring states, you should compare both amounts
per capita ar~damounts per $1, 000 of personal income.
For example, suppose you are comparmg tax levels (including
non -tax revenue but excluding federal aid) m Mirmesota and New Mex~co.
Per Capita State and Local General
Revenue from Own Sources, 1974
Amount
Minnesota $900.71
New Mexico $689.82
This comparison shows that per capita general revenue (excluding
federal aid) was substantially higher in Mmneso ta than m New Mexico.
However, you may want to know how this difference relates to incomes
in the two states.
State and Local General
Revenue frclm Own
Sources Per $1,000 of
Personal Income, 1974
Amount
Minnesota $176.24
New Mexico $181.60
This comparmon shows New Mexico to be a little higher than Minnesota.
Are average tax burdens m the two states about the same or is Minnesota
significantly higher ? The answer depends on how you choose to compare
tax burdens.
7. Remember that reformation cm expenc~itures includes revenue
that originated at the federal level as well as the state and
local level.
Suppose you are comparmg total general expenditure per $1,000
of personal income in Minnesota and Mississippi.State and Local General
Expenditure Per $1,000 of
Personal Income, 1974
Amount
Minnesota $203.82
Mississippi $210.30
This comparison shows Mlsslssippl sllghtly ahead of Minnesota. Does
this suggest that taxes (relatlve to income) are higher m Mlsslsslppl
than in Minnesota? Not necessarily. Mississippi receives substan-
tially more federal aid per $1, 000 of personal income than does
Minnesota. If you compare revenue from state and local sources
(excluding federal aid), you fmd the following:
State and Local General
Revenue from Own Sources
Per $1,000 of Personal
Income, 1974
Amount
Minnesota $176.24
MM sis slppi $161.88
Def mltlons
Some of the major categories used by the Census Bureau m
reporting state and local governmental finances are defined below.
Addltlonal mformatlon and the definitions of other terms may be found
m reports Issued by the Census Bureau.
Expenditure -- All money paid out by a government (net of recoveries
and correcting transactions) except money paid out for retme -
ment of debt, investment m securities, extension of credit, or as
agency transactions.
General Expenditure -- All expenditure of a government except expen-
ditures associated with the operation of public utlllties, liquor
stores, and insurance trust funds.
Dmect Expenditure -- All expenditure of a government except inter-
governmental expenditure.General Sales and Gross Receipts Taxes -- Sales and gross receipts
taxes which apply to all types of goods, or goods and services,
or all gross income with only specified exceptions.
Selectlve Sales and Gross Receipts Taxes -- Sales and gross receipts
taxes which apply to only particular commodltles, or s ervlces,
or gross receipts of particular businesses. Examples include
taxes on motor fuels, alcohollc beverages, tobacco products, etc.
Property Taxes -- Taxes paid as a condltlon of property ownership
and measured by Its value. This category does not include spe-
cial assessments against property owners.
License Taxes -- Taxes paid as a requirement for exerclsmg a
business or nonbusmess privilege. Examples include llcense
taxes imposed on speclflc types of businesses, corporation
franchise taxes, motor vehicle llcens e taxes, motor vehicle
operators llcenses, hunting and fishing llcenses, etc.
Death and Gift Taxes -- Taxes imposed on the transfer of property
at death, m contemplation of death, or as a gift.
Severance Taxes -- Taxes unposed on the removal of natural pro-
ducts (eg. , timber, oil, gas, coal, etc. ) from land or water and
measured by the value or quantity removed or sold.
Census Bureau Re~orts
Census Bureau reports on state and local governments include
(1) a census of governments, (2) annual and quarterly reports, and
(3) occasional special stuxhes,
Census of Governments
The most comprehensive source of data on state and local govern-
ments M the federal census of governments conducted every five years
(in years ending in 2 and 7). The census of governments covers four
major subjects: (1) governmental organization, (2) taxable prop erty
values, (3) public employment, and (4) governmental finances.
Information from the 1972 Census of Governments M available in
the following reports:Volume 1. Governmental Organization (1 publication)
Volume 2.
Part 1.
Part 2.
Volume 3.
No. 1
No. 2
No. 3
Volume 4.
No. 1
No. 2
No. 3
No. 4
No. 5
Volume 5.
Volume 6.
No. 1
No. 2
No. 3
No. 4
No. 5
Volume 7.
Volume 8.
Taxable Property Values and Assessment-Sales
Price Ratios (2 publications)
Taxable and Other Property Values
Assessment-Sales Price Ratios and Tax Rates
Public Employment (3 publlcatlons)
Employment of Major Local Governments
Compendmm of Public Employment
Management-Labor Relations in State and
Local Governments
Governmental Finances (5 publications)
Finances of School Dis trlcts
Finances of Special Districts
Finances of County Governments
Finances of Mumclpalities and Township
Governments
Compendium of Government Finances
Local Government in Metropolitan Areas (1 publication)
Topical Studies (5 publications)
Employee -Retirement Systems of State
and Local Governrnen ts
State Reports on State and Local Government
Finances
State Payments to Local Governments
HMtorlcal Statistics on Governmental
Fmanc es and Employment
Graphic Summary
State Reports (separate publication for each state)
Guide to 1972 Census of Governments (1 publication)
Annual and Quarterly Reports
As a supplement to census data, the Census Bureau publishes
a number of annual and quarterly reports. One of the most useful
annual reports is Governmental Finances (Series GF, No. 5). This
is the only report that includes information for all levels of govern-
ment. Annual and quarterly reports include:
Annual Reports on Governmental Finances (Seines GF)
No. 1 State Tax Collections
No. 2 Finances of Employee -Retmement Systems
of State and Local Governments10
No. 3 State Government Finances
No. 4 City Government Finances
No. 5 Government al Finances
No. 6 Local Governmental Finances in Selected
Metropolitan Areas and Large Counties
No. 7 Chart Book of Governmental Data
No. 8 County Government Finances
Annual Reports on Government Employment (Series GE)
No. 1
No. 2
No. 3
No. 4
Quarterly Reports
Series GC.
Series GR.
Series GT.
Public Employment
City Employment
Local Government Employment in Selected
Metropolitan Areas and Large Counties
County Government Employment
Construction Expenditure of State and
Local Governments
Holdings of Selected Publlc Employee
Retirement Sys terns
Quarterly Summary of State and Local
Tax Revenue
For more information about the content of these reports and a
list of special studies relating to state and local governments, see
U.S. Bureau of the Census, Guide to Recurrent and Special Govern-
mental Statistics, Series SS, No. 62, 1972.

USING CENSUS BUREAU STATISTICS ON GOVERNMENTAL FINANCES

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