The main difference between the federal budget and the state and local budgets is the issue of a monetary deficit, in which expenditures in the budget exceeds revenues that were estimated. State and local governments are required to balance their budgets. The federal government is allowed to borrow money to meet its obligations and have a deficit. The federal government collects the most tax revenue, but state and local governments have a greater range of revenue options for funding their budgets. The federal government relies mainly on income taxes, capital gains and Social Security taxes. State and local governments collect sales taxes, taxes on fuel, property taxes and fees from special licenses and permits. Also, many state and local Governments collect funds from state lotteries and taxes on alcohol and tobacco.
When comparing Federal, State and Local Budgets, each one is slightly different. Each budget has its own goals and direction that they are moving toward. On the internet site: http://www.usgovernmentspending.com I was able to obtain several pie charts that breaks down the 2012 fiscal year budget for Federal, State and Local governments. These pie charts give a basic breakdown of the budgets for each level. Figure 1: Federal Budget (Federal Budget Site). This budget shows that the largest portion of the federal budget is for Defense. This includes military spending for the troops in the Afghanistan and Iraq and Homeland Security. Since 200,1 this portion of the budget has increased from $297 billion to $740 billion in 2011. The next largest portion is both Health Care and Pensions at 22% of the federal budget each. Health care constitutes Social Security, Medicare and Medicaid. Social Security was established in the 1930s and was created to help older Americans.
Before Social Security the responsibility of their well being was the responsibility of the community and the family. While the individual was working, they paid a small portion into a federal fund so they would be able to receive benefits when they were older. Medicare benefits are sometimes considered part of the Social Security benefits but are actually a separate program. Medicare was established in 1965 and is available for people 65 and older, people under 65 that have disabilities and people that have permanent kidney failure that are in need of a transplant and receiving dialysis (Medicare Site). Medicare comes in two portions. Part A includes hospital expenses that normally cost the Medicare holder nothing out of pocket. Part B covers the cost of doctor visits and other medical care but cost the Medicare holder a small monthly charge (Medicare site).
Medicaid is an insurance covered by the federal government for people that have lower incomes and cannot afford health insurance (Medicaid site). Next on the pie chart show that 12% is spent on Welfare. This would include Unemployment, Workers Compensation and food and nutrition assistance. The fifth largest portion on the federal budget is the money paid back due to interest. The federal government must make payments on the interest on the money it has borrowed, which is now the National Debt. The amount of the interest only is approximately $230 billion of around 6% of the federal budget (Policy Basics).
Figure Two: Georgia State Budget (Georgia Budget Site). This budget shows that the largest portion of the Georgia budget is for Education, at over half of the budget. Education would include an increase of $188.5 million from previous years. This is because of the increase in k-12 students and an increase in the college system and the state making the required payments into the Teachers Retirement System (Georgia Budget). The next largest portion of the Georgia budget is regarding Healthcare. In Georgia they face several different challenges when it comes to health care; Infectious diseases, obesity and low birth weights are just a few of these problems. Georgia’s public health challenges such as obesity, infectious disease and low birthweight continue to increase in importance, but Georgia’s per-capita investment in public health programs has declined in recent years due to a shrinking state funding commitment coupled with a growing state population.
The next largest portion at almost 10% of the budget is allotted to Criminal Justice. In the state of Georgia we have 159 state funded prisons that house over 57,000 inmates (Ga Prison Fact Sheet). This also includes over 13,000 state employees that run these facilities (AJC Prison). Each inmate takes approximately $51 a day. This includes housing, meals and general day to day activities (Ga Prison Fact Sheet). Forth largest in the Georgia budget is for Debt Services. Debt services include the payments of the principal and interest of any general or long term obligation that the state has accrued. This amount is over $64 million in 2012. Lastly, the fifth largest budget allocation is for transportation. Transportation encompasses road repair, improving the efficiency of the movement of goods, construction of new roads and Highways and reducing congestion within the state. Along with these services, the salaries and benefits of their employees are figured into this section of the budget (Georgia Budget site). Figure 3: Local Budget (Cobb County Budget). This budget shows the breakdown on the spending in Cobb County Georgia. Cobb County includes portions of Atlanta and is just north of Fulton County, which contains the largest portion of the city of Atlanta.
The largest portion of the Cobb County budget goes toward Education. In Cobb County there are 4 Universities, 64 Elementary Schools, 25 Middle Schools and 16 High Schools (Cobb County School Site). The Cobb County school system is the 2nd largest system in the state and 24th largest in the country (Cobb County School site). With the large amount of Schools in the County come a large number of employees at 13,551. This portion of the budget includes keeping up with technology, salaries, maintenance of older schools and the construction of new facilities. The Next largest is listed as Other Spending. Other spending would include things like waste management, water treatment, and agriculture and community development. Each area has its own operating expenses, salaries and new projects.
The third largest budget expense in the Cobb County Budget is for Protection. This would include things like the jail and court system, Sheriff’s Office, Police Departments, Fire Department, 911 services and Ambulance services. Just like each other portion of the budget it contains operating expenses and salaries of their employees. The fourth and fifth largest portion of the Cobb County Budget, at 8% is for Transportation and Health Care. Transportation in Cobb County would include things like public transit system, operation of the Department of Transportation operation and the school bus department. Health care in Cobb County maintains a Public Health Department and two separate hospitals.
When comparing the different budgets, each one has a much different focus on their expenditures. Some portions of each budget in the top five are shared by each level in some sort of fashion. The number one expenditure for the Federal Government is Defense. Number three for the State of Georgia is Criminal Justice and number three for Cobb County Georgia is Protection. Comparatively so, all three items are very much alike. The federal government is concerned with National Security and based 24% of its budget on its funding. The State of Georgia spends 9.4% of their budget toward state prisons and their state police. Cobb County spends 11% of their budget to protect their citizens by pre-trial housing, local law enforcement and emergency medical services. Another large expenditure for the federal government is health care at 22% of their budget.
This is only slightly higher than the State of Georgia spends on health care at 20.5%. Cobb County’s Health Care budget comes in at the 5th highest expense at only 8%. When looking at the different budgets I started trying to compare all three of them and decided that the best way to look at the different spending is with a graph that give a visual element to better describe the scope of their spending. Based on each group of budgets, these graphs show the comparative relationship between the top five expenditures.
This first graph shows that the top five budget expenses for the federal government is much different when compared to the State of Georgia and the Cobb County Government. The federal government spends 24% of its budget on national defense and 22% each on Health Care and Federal Pensions. Looking at the top five budget items for the federal government uses 86% of their available funds.
This graph shows the State of Georgia top five budget items. The majority of the budget for Georgia is allocated to Education at 51.8% of their funds. The top five budget items for the State of Georgia uses 92.2% of the $19.2 billion budget. This graph shows the top five budget items for Cobb County Georgia. It shows a drastic difference in the second largest budget item, Community Development at 20%.