Background and Databases: 2012 Census of Governments State and Local Finance Data

Every five years the U.S. Census Bureau conducts a Census of Governments to record the organization, employment, and finances of every state and local government in the country. For the past few months the Bureau has been releasing finance data from the 2012 Census of Governments, and I’ve been tabulating it. Attached to the end of this post are spreadsheets that provide a comparison between New York City, all local governments in the U.S. combined, all local governments in different regions of New York State, all local governments in each county in both New York State and New Jersey, and selected counties across the country. And all local governments, by state, in each state in the U.S.

There is column for each area and, moving across the same row, one can find, for example, what share of New York City residents’ personal income the city collects in local government taxes, compared with the U.S. average and local governments elsewhere. The same comparison could be made for property taxes or sales taxes alone. Or one can also find what share of the income of all NYC residents the city spends, in total or in specific categories such as parks and libraries. And I’ve provided additional spreadsheets with data for state government revenues and expenditures, by category as a percent of the personal income of each state’s residents. Similar data is provided for 1992 and 2002, for a comparison over time.

Over the next month or two I intend to write a series of posts, complete with charts, with my analysis of this data. What I would really like, however, is for people to first download these spreadsheets, look at the tables on their own, and make up their own minds about what the data says, before getting my take on it. There is far more information here and coming, for far more areas, than I could ever find time to write about. When you see this data, and you see how different places compare, you realize that much of what you hear in the media about state and local government is misleading. The public discussion is dominated by those with a financial stake in state and local policy, and it is slanted to their views – at best by providing only a partial picture, at worse by simply making stuff up. The staff of the Census Bureau has worked diligently to provide objective information for open minded, curious people, and I’ve spent 96 hours of my own time, so far, to put it in a form that makes fair comparisons from place to place and time to time possible. Please use it and think about it.

Before downloading the spreadsheets, people should read the rest of this post to understand what it is that they are seeing. The data was downloaded from the Census Bureau’s home page here,

and other locations with more detailed data that I’m familiar with because of my long use of this dataset and interaction with the Bureau’s Governments Division staff. In the spreadsheets presented in this post the data as downloaded is located toward the bottom of each column. Each place has its own column, and the data items have been laboriously reorganized to ensure that same item is in the same row for each column/place. You’ll see codes for each data item, along with their identifying titles. To fully understand the data items are and how the data was compiled, you can read the Census Bureau’s latest manual here.

My analysis takes the local government data item (revenue, expenditure, debt) for each place and presents it per $1,000 of the personal income of an each area’s residents. Think of it this way. Your household earns X thousand dollars per year, and spends some percent of it on food, some percent of it on housing, some percent of it on clothing, some percent of it on entertainment, etc. And the government takes some percent of your income, and everyone else’s income, and spends some percent of it on public schools, some percent of it on streets and highways, some percent of it on public schools, etc. The figures are in the tables are expressed per $1,000 of personal income, rather than as a simple percent of personal income, because otherwise spending in some categories would be too low to stand out. For example, in FY 2012 the City of New York spent $3.88 per $1,000 of the income of its residents on fire protection. Expressed as a percent, that would be well less than one percent, about 0.39%.

The personal income data was downloaded from the federal Bureau of Economic Analysis, from the State Personal Income and Local Area Personal Income datasets. These can be found here.

I use personal income, rather than population, to adjust the spending totals for the size of different areas because I also want to adjust for the cost of living. In places with higher average incomes, such as those in the Northeast Corridor, the average resident can afford to pay more in state and local taxes than the average resident of lower-income areas, such as those in the South and Southwest, without it being a greater burden as a percentage of their income.

At the same time, however, places with higher average incomes also tend to have higher costs of living, due to higher housing costs and higher wages in sectors that provide services direct to consumers. Thus one could not expect to pay a teacher or police officer the same wages in the suburbs of New York City as in Texas or Oklahoma and expect them to be as well off, and thus attract workers of the same caliber.

Tabulating the data per $1,000 of personal income adjusts for both the local cost of living and the capacity of local residents to pay taxes, and thus provides a more fair comparison from the place to place.

The data also has to be adjusted for the complex relationships between the federal, state and local governments. For this reason, spending data by category is presented for “direct spending.” In some cases states spend money on services and benefits they provide themselves, with higher education, corrections (prison), and unemployment insurance examples of functions where states do most of the work. But more often they merely pass money on to local governments or (as in the case of health care funded by Medicaid) the private sector. The Census Bureau distinguishes between “direct spending” on actual public services and benefits, and “intergovernmental” spending, the portion of the budget sent to some other government. And between “own source” taxes and other revenues (such as fees and fines) and intergovernmental revenue received from some other level of government.

Take, for example, Medicaid-funded health care at a hospital run by New York City’s Health and Hospitals Corporation. Medicaid is a state program in New York, but local governments are required to contribute to it. So the City of New York might “spend” a dollar on “public welfare” aid to the State of New York (Medicaid is lumped in with public welfare in revenue data because it is a categorical, income restricted federal program). The State of New York, meanwhile, could then “spend” that same dollar as “public welfare” aid to the City of New York, as a payment to the Health and Hospitals Corporation. And then the City of New York could then spend that same dollar a third time, as direct Public Hospital spending on health care.

In total spending, that same dollar could be spent three times. In direct spending it is spent only once. For comparisons of spending by function across places, only “direct expenditures” should be used.

It is to analyze intergovernmental spending, however, that I was required to download and compile more detailed data than the Census Bureau generally provides. For local governments the Bureau’s summary tabulations generally present state aid and federal aid as one number each. I want to be able to identify how much of local government spending in each is financed by fees for that specific service and categorical federal and state aid that can’t be used for anything else, rather than general local taxes.

Adjustments also have to be made for the varying division of state and local government responsibilities in different places. In most of the country public schools are a local government function, but in Hawaii the state government runs all the schools, and this affects the U.S. average. And in some states such as New Jersey the state government has taken over some local school districts, and their spending now counts as “state government spending” rather than “local government spending.” In most of the country, and in New York City, mass transit is classified as a local government activity, whereas in all of New York State outside New York City and in New Jersey it is classified as state government. That is true even though New York City Transit has been part of the state-run MTA since 1968. Comparing New York City’s local government spending in these categories with the New Jersey and U.S. totals based on the original data, therefore, would be misleading, because some of the spending would be missing.

In the tables to be presented, therefore, state spending on elementary and secondary Education and public transit is generally re-tabulated as local government spending, to get a similarly measured total for different places. For local government spending within different parts of New York State, I allocated New York State spending as recorded by the Census Bureau to different parts of New York State based on 2012 data from the Federal Transit Administration that I compiled last year (and presented here).

As an added complication, for historical reasons all the revenues, expenditures and debt of the Port Authority of New York and New Jersey is tabulated as local government in New York City. (Aside from a couple of tiny agencies, the City of New York and the Port Authority of New York and New Jersey are the only local governments within the borders of New York City). Where possible I divide Port Authority revenues and expenditures between the New York City (and state) and New Jersey. You can look at the formulas in the “adjusted” columns to see how.

There is a limit to the adjustments I can make, however. When I present data for local governments in individual New York State and New Jersey counties, data for “state government” public transit systems such as the Long Island Railroad, New Jersey Transit and the Capital District Transportation Authority are not included. Instead, adjusted mass transit data is presented only for the Downstate Suburbs as a whole, the Upstate Metro Counties as a whole, and New Jersey as a whole.

Similarly, I decided not to try to divide up New Jersey’s state government spending on public schools among Essex County, Hudson County, Passaic County and Camden County, because I don’t know NJ as well as NY. The public school spending totals for these counties, therefore, are inaccurate because they don’t include schools in the cities of Newark, Jersey City, Paterson and Camden respectively. Only the adjusted state total for NJ, and other NJ counties, can be directly compared with NYC and the U.S. average for public school spending.

It should be noted that in this tabulation the “Downstate Suburbs” are Nassau, Suffolk, Westchester, Rockland, and Putnam Counties. The “Upstate Urban” counties are Albany, Broome (Binghamton), Dutchess, Erie (Buffalo), Monroe (Rochester), Niagara, Oneida (Utica), Onondaga (Syracuse), Orange, Rensselaer (Troy), Saratoga and Schenectady. The Rest of New York is the remaining counties, with their rural areas and small cities and towns. Data for these areas, along with NYC, will be used in bar charts later on.

Most of the local government data I used is from the Census Bureau’s “County Area” files. Quoting the Bureau:

County area data afford the user a more complete picture of government activities than data for any one type of local government. This is because a service provided by county governments in one state may be provided by a different type of government in another. For example, Connecticut and Rhode Island do not have county governments, but they do have township governments that provide a wide range of services. On the contrary, thirty states do not have township governments at all. Thus, by examining the sum of all governments within the geographic area of a county, the services provided by local governments in different states are more comparable than they otherwise would be. The County Area files also make State and Local government finance data more compatible with other county-based data published by the Census Bureau.

The County Area data is the only data that should be used to make local government comparisons from place to place. Many years ago a New York think tank published a report, prepared by a consultant, that expressed shock how much higher total per capita spending by the City of New York was compared with the City of Los Angeles. What the consultant did not know is that not only did the City of Los Angeles not provide the public schools within its borders, it didn’t even provide the police (provided by a separate special district). And of course the County of Los Angeles provides a wide range of services to city residents as well. In my compilation, you will see data for all governments in Los Angeles County combined rather than for the City of Los Angeles, along with Suffolk County rather than Boston and Cook County rather than Chicago. In the case of Philadelphia and San Francisco, the county and city boundaries are co-terminus.

Even with the County Area data, however, there are complications. Quoting the Bureau again:

There are caveats the user should be aware of when interpreting the data. First, the revenues obtained by governments within a county area may not derive exclusively from the residents of that county area. For instance, a sizeable portion of sales taxes obtained by local governments in popular tourist destinations would be paid by people who are visiting, but do not live in, that county area. In a similar vein, the expenditures of local governments may not solely benefit the residents of the county area. Consider a county in an urban area that supports a large number of people who commute to work from neighboring counties. Local governments in the urban county would incur expenses on infrastructure used by commuters – water, sewerage, road maintenance, mass transit, and the like – in addition to county area residents.  

I don’t worry too much about spending on commuters. The services involved tend not to be those that cost the big bucks, and the sales taxes on commuter purchases and property taxes on the places of business they frequent likely more than offsets them. In New York City, the in-commuters are most likely to commit crimes of the white-collar variety, and these are not the responsibility of the NYPD.

Additionally, there are local governments that serve more than one county area. In these cases, the Census Bureau practice is to assign the total financial information for the government into one county only – typically, the county in which the government’s headquarters is located. For instance, the Washington Metropolitan Transit Authority serves a number of county areas in both Maryland and Virginia, but in our County Area file, all of its finances are included in the District of Columbia’s totals.

That is more of a problem. So in the local government data as I tabulated it you will, in some cases, see a separate “transit” personal income figure in addition to the “personal income” of each county. For mass transit, the spending data for the metropolitan area transit agency is divided by the metropolitan area personal income figure, rather than by the personal income of residents of the headquarters county alone. I made a similar adjustment, dividing by the service area population rather than the headquarters county poopulation, when I tabulated public mass transit employment per 100,000 residents from the 2012 Census of Governments here:

The Bureau’s source data is not perfect, and some strange differences from place to place may not be real. Notes the Bureau:

The data in these files are not subject to sampling error because the data are from a census, or complete survey, of all local and state governments in the United States. The data are subject to various non-sampling errors such as nonresponse error (errors caused by governmental units that do not return their completed forms), response error (errors introduced by the survey respondent), processing errors (keying or other errors introduced during the handling of the questionnaires), or coverage errors (errors introduced by not having a complete listing of governmental units). Census Bureau staff review and edit individual government units to reduce response and processing errors.[1]   Additionally, data for government units that do not respond is imputed in an effort to reduce the effects of nonresponse error.

I’m told that cooperation with the U.S. Census Bureau by local governments has been going down as fiscal crises, often generated by public employee pension underfunding, take hold. But New York State’s reporting is among the best.

There is, however, a source of comparison inaccuracy for which New York City is among the worst: accounting for pensions and employee benefits.

Most local government workers are covered by state run government pension plans: in FY 2007 local government pension plans paid $30.5 billion in benefits, while state government pension plans paid $136 billion.   Those “expenditures” come from pension plan assets, and are thus not directly funded by taxes, fees or intergovernmental aid. What is paid for by taxes are pension plan “revenues,” those paid by state and local governments. By counting taxpayer pension contributions as “revenues” it is as if the Bureau was counting health care spending on public employees by private health insurers as government spending, and the payments by governments to those health insurers as government revenues. The spreadsheets as I’ve presented them generally exclude data on pension revenues and expenditures, and these will have to be analyzed separately.

In some cases, moreover, state governments are responsible for making contributions for local government employees, notably teachers in California, New Jersey and the portion of Illinois outside the City of Chicago. In addition some years ago the State of New York started simply deducting the teacher pension contributions from state school aid, rather than sending money to school districts and having those districts send the money back to the state as pension contributions (or at least that’s what the data says happens). This means the general Census Bureau finance data shows less state aid to, and less spending by, public schools in the rest of New York State.

As it happens, the largest local government pension system in the U.S. is right here in New York City, with $9.2 billion in taxpayer pension contributions in FY 2012. Based on the separate database of public employee pension data the Bureau released last year, which I tabulated for NYC, the Rest of New York State, and other states here:

The Bureau’s recently released government finance data, however, excludes this pension revenue/taxpayer spending for New York City, because it is merely an “internal transfer” from one part of the city government to another (the pension plans). As a result, for example, the $44.41 per $1,000 of city residents’ personal income that NYC spent on public schools is excluding pensions. I confirmed this using data from the Budget Summary report from the NYC office of Management and Budget. Payments by many (but not all) school districts elsewhere to state run pension plans, on the other hand, are included in the U.S. average of $40.76 per $1,000 of personal income spent on schools.

In the case of schools, a different Census Bureau dataset provides per student spending for all public schools with pension and other employee benefit costs always included. I tabulated this data for 1992, 2002 and 2012 last year, and posted it here.

In the finance data linked at the end of this post, the data for NYC public schools includes employee benefit costs other than pensions. But that isn’t the case for all New York City agencies. Take the NYPD. NYC spent $10.69 per $1,000 of its residents’ personal income on police in FY 2012, compared with a U.S. average of $6.06 per $1,000 of personal income. That sounds like a pretty good deal, given that NYC had nearly three times as many police officers as the U.S. average, as I showed earlier. However a closer look at the data, and a comparison with NYC OMB documents, shows that the city’s “police spending” figures, as reported to the Census Bureau, only really include half the city’s spending on the police – the wages of those on the job, and perhaps purchases such as gasoline for the police cars. The very expensive pension AND other benefit costs are not included.

If you have a single function government, such as a school district or a sewer district, it is pretty easy for the Census Bureau to figure out which function its employee benefit costs should be allocated to. The City of New York, no the other hand, has agencies providing services for just about every local government function there is. The NYC Comptroller, however, has for decades generally refused to try to allocate pension, health benefit, and other benefit costs among city agencies in its accounting. That is why Mayor Bloomberg had the Office of Management and Budget provide this information, at least to some extent.

While City of New York’s pension costs don’t show up at all in the Bureau’s general government finance data at all, however, the other benefit costs do show up – under code E89 Other and Unallocable. According to the Bureau’s classification manual this category includes lump-sum contributions for employee benefits (retirement, unemployment and workers’ compensation, health and life insurances, etc.) other than transfers to own insurance trusts; premiums for government-wide fire, auto, liability, and other such insurances; judgments and compensation for injury to persons or property, in addition to very small functions in a variety of categories. In 2012 NYC accounted for less than 3.0% of the U.S. population and 3.4% of U.S. personal income, but it accounted for 11.6% of U.S. local government expenditures in the “Other and Unallocable” category. That is about $10 billion in “other and unallocable” spending in NYC.

Strapped for funds, the Census Bureau has been unable to modernize the data collected by its Governments division, other than to reduce the amount of information that is collected. Health insurance benefits probably weren’t that important in the 1950s, when the Census of Governments was designed, and are thus not well accounted for. As public employee and retiree health care costs increase, the extent to which NYC spending for most public services is higher than it appears (relative to other areas) also increases.

It should be noted that interest payments are also not assigned to individual government functions either, with some exceptions. That, however, is true everywhere, and thus does not make place-to-place comparisons weaker. I make the comparisons I can, using the data that is available.

For pensions, some of the spreadsheets linked below have data for NYC, the rest of New York State, and other states on taxpayer contributions as a percent of public employee wages and salaries. I do that here because the pension-specific data released by the Census Bureau hasn’t had data on employee wages in the past, so this merging of datasets is the only way to provide that measurement. I’ll provide more information specifically on pensions later.

Fair comparisons over time face an additional issue. Some years are better for the economy than others, and when the economy is bad personal income goes down and taxes and spending a share of personal income go up. That represents circumstances, not policy. A fair comparison over time, therefore, requires data for somewhat similar years.

As it happens FY 2012, the most recent Census of Governments year, was a lousy post-recession year for the economy, as FY 2002 and FY 1992 had been. So I have also re-tabulated data for those two years for comparison with FY 2012. Although I already have it on my computer, on the other hand, I will not be re-publishing data from the 2007 Census of Governments, since 2007 was the peak year of an economic bubble. Perhaps 2017, the next Census of Governments year, will be more like 2007, though that’s not the way to bet.

Now the reader understands what they will seeing, here is the spreadsheet with adjusted local government data for the U.S. and, based on the county area file, NYC, the Downstate Suburbs, the Upstate Urban Counties, the rest of NY State, New Jersey, and Fairfield County. Along with every county in both New York and New Jersey, and selected other states and counties around the U.S.

Census Local Gov Finance 2012 By County

The “panes” are frozen so one can move across the rows to different areas while keeping the U.S. average and the row titles to the left. The downloaded data is below the data per $1,000 of area residents’ personal income. You’ll see there are more date items on the bottom than I chose to include in the output tables at the top. But anyone could, if they wished, add a row and divide the data for an additional specific item by personal income, then copy and paste the formula across all the rows for comparison.

Here is a smaller spreadsheet set up to print (though I can’t guarantee what your spreadsheet program with do with it), with local government data for NYC, aggregated other regions of NY State, the U.S., NJ and Fairfield County CT alone, and without the source data.

Census Local Gov Finance 2012 NY-NJ

The next spreadsheet includes detailed local government revenue and expenditure data for every state in the country, from the Census Bureau’s “statetypepu.txt” file, tabulated the same way, with all state government transit and public school spending included as local government. And state government revenue and expenditure data from that same file tabulated for every state as well (note the two tabs on the bottom – state and local).

Census State and Local Gov Finance By State Detail

In the state government worksheet, major spending categories generally carried out directly by state governments are in bold, and taxpayer and employee pension contributions for state and local pensions combined are expressed as a percentage of wages and salaries.

For comparisons with the past, these two spreadsheets provide local government data for the county areas for 2002 and 2012 in the same format.

Census Local Gov Finance 1992 By County

Census Local Gov Finance 2002 By County

And for an easier comparison, this spreadsheet has local government revenue and expenditure data for FY 1992, 2002 and 2012 for the U.S. total, NYC, other regions of NY State, New Jersey and Fairfield County. It is also set up to print.

Census Local Gov Finance 1992-02-2012 NY-NJ

Here is a spreadsheet of state government revenues and expenditures for 1992, 2002 and 2012 for the U.S. as a whole, New York State, New Jersey, and selected other states.

State Finance Census of Governments 92 02 12

Finally, since I decided to keep track of what doing this was costing me this time around, here is how much time I’ve had to spend on compiling 2012 state and local government data from the Census Bureau, just to get to this point.

Project Hours Log

I’ve done this work so that anyone can know at least as much as I do about comparative state and local government for this part of the country.   Instead of being dependent on what various interests want them to know. You won’t see anyone else putting out ALL the data, for ALL the areas, with the source data, formulas and calculations there for all to see, so the assumptions and decisions can be examined.  No one is paying for this work.  Recall the subject of another one of my posts from years ago.  In this era “Nobody’s Gonna Pay You To Tell The Truth.”

To me this data is the essential background for any discussion of state and local government policy. Otherwise all you get for any give place is this year’s budget compared with last year’s budget. That is an analysis with an ideology, that the current winners and losers in a place’s priorities should be locked in forever, or at least that those priorities have some assumed legitimacy. Comparisons with other places, adjusted for income and other factors, provide an alternative view. Just because it is the national average doesn’t make it right, because different places have different characteristics, preference and needs. But wide divergences from the U.S. average and other similar places need to be explained and justified rather than merely continued by the divine right of those who come out ahead. In state legislatures were only interest groups are represented and in debates in which the general public is either left out or misinformed.