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...
Please join StudyMode to read the full document