Public budgeting occurs at the federal, state, and local levels of government. However, they “differ consistently from one another”. (9) The federal government’s budgeting is very “unique” because its expenses are greater than revenues most of the time. (10) The state government takes care of the large size revenues and expenditures. (11) The local government manages the revenues and expenditures within the cities and villages. (12) These three levels of governments have their own responsibilities, so that when work together, the United States can run smoothly.
The federal government in “the U.S. government is the largest financial entity in the world; it frequently spends significantly more than it collects.” (10) It is responsible for international and national-related revenues and expenses. It spends more than it earns most of the times. That depends on the economic as a whole worldwide and within the country. If the federal budget is on deficit, chances are the state and the local governments might have fewer budgets as well. That’s what the country has in saving. One of the revenues is the “income taxes”, which “make up 70 to 80 percent of federal revenues.” (10) Other revenues include, but not limited to, “postal fees … taxes on liquor … [, and] telephone tax, etc. (10) The fact is that the federal government pays for “goods and services that are used in providing public services to improve citizens situations”. (10) Beside the “defense being the largest example” of expenditures, the federal government also spends money on “Social Security, aid to state and local governments (mostly grants), Medicare, Medicaid, and agricultural price support payments”. (10) Moreover, there is another kind of expenditures that is “revenue expenditure and credit support”. (10) One example is “tax-related”. (10) It is the tax money that the federal government does not collect from a person due to mortgage payment. In other words, the federal government waives the tax from collecting from a home owner, and in turn paying for the amount in the book (bookkeeping). “The federal government provides credit support for student loans, deposits in financial institutions, small business loans, home loans, and most recently automobile companies and financial institutions under the Troubled Asset Relief Program (TARP)”. (11) When loan is not paid by the borrower for whatever reason, for example, bankrupt, the federal government might have to pay for the amount in the end.
The state government takes care of “large size, responsiveness to economic conditions, particular compositions of revenues and expenditures, and a significant degree of complexity”. (11) However, the state government does not “run large deficits; they respond to economic conditions and maintain budgets that are mostly balanced”. (11) This level of government relies on “revenue streams … [such as,] income and consumption taxes, federal aid, and fees”. (11) On the other hand, the state government spends money on “the realm of police powers … [like], .[such as,] … …f government rely on “mic conditions and maintain budgets that are mostly balanced”ositions of revenues and epublic welfare, health, safety, and morals”. (12) “Legal systems, health care, corrections, welfare, education, and transportation” are the main and largest expense for the state government. Another fact is that “state budgeting is complex because of state responsibilities … [that is] having smaller budgets for relatively routine programs over which they have greater formal control”. (12) In other words, the state government has its own expenses on commonly run programs, different from the federal government, but “their budgets [are much less] than the federal government”. (12) The state government is middle level of the government, which takes care of large size revenues and expenditures. If there is deficit within the state government budget, educational grants, for example, might be in effect as well as other financial support for other businesses.
The local government is the third and smallest government of three, but it has its own important roles as well. It takes care of the city fees, city tax, city education, street lighting, and sanitizing the streets for snow and litter. However, the local government budget depends on the federal and state budget. It is “created under the authority of states … [responsible] under state laws, revenues sources, and budget requirements … [that takes care of] municipalities – cities and villages”. (12) This includes, but not limited to, “counties … delegated by states for specific territories, townships … from essentially municipal operations to subdivisions of counties with one or a few significant responsibilities, [and] … school districts [that] provide educational services”. (12) Other special services include “recreation, street lighting, irrigation, and transportation”. (12) Due to the local government’s “narrower responsibilities and smaller territories and population, local budgets tend to be much smaller in size than state budgets, except … Los Angeles County and New York City”. (12) The amounts that the local government spends or earns depend on “each state government”.
In conclusion, the three levels of government: federal, state, and local government, though, has their differences on their revenues, expenditures, and amounts of the budgeting; they all work as a team to help run the country smoother. Overall, although they are in various amounts on budgeting, they each have their own essential roles to play to make us have a better life.
- Swain, JW & Reed, B.J. (2010). Budgeting for Public Managers. Routledge (formerly M.E. Sharp)