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     State and local government spending increased by 6.5 percent in 2008, totaling more than $2.8 trillion, according to the U.S. Census Bureau. Education topped government spending ($826.1 billion), followed by public welfare ($404.6 billion), insurance trust expenditures ($234.6 billion), utilities ($193.4 billion) and highways ($153.5 billion).

    “These data provide a detailed look at state and local government spending priorities,” said Lisa Blumerman, chief of the U.S. Census Bureau's Governments Division.

    These findings come from the 2008 Annual Surveys of State and Local Government Finances, which includes data on revenues, expenditures, debt and assets (cash and security holdings) for state and local governments.

    Among state and local government spending, housing and community development increased 11.0 percent. Additionally, spending on hospitals increased 8.4 percent and spending on insurance trust systems increased by 9.8 percent (See Table 1 [Excel]).

     Nationwide, state and local governments spent 2.8 percent on health services (other than hospital care), an increase of 7.4 percent.

     State and local governments took in $2.7 trillion in total revenues in fiscal year 2008, a 13.4 percent decline since 2007. This was largely the result of a decrease in insurance trust revenue (See Table 2 [Excel]).

     Revenue from taxes, the largest share of state and local government revenue, rose 3.7 percent to $1.3 trillion. Sales and gross receipts made up the largest share of tax revenue ($448.7 billion), followed by property taxes ($409.7 billion) and individual income tax revenue ($304.6 billion) (See Table 2 [Excel]).

     Debt outstanding for state and local governments rose 5.8 percent to $2.6 trillion, while assets declined 1.7 percent to $5.4 trillion.

     Other highlights for state and local government finances:

• Public welfare spending increased 5.2 percent from $384.8 billion to $404.6 billion.
• Higher education spending increased 9.1 percent from $204.7 billion to $223.3 billion.
• Spending on education totaled more than 35 percent of expenditures in Vermont (36.7 percent) and Virginia (35.9 percent) (See Table 3 [Excel]).
• The leading state in expenditures for housing and community development was Louisiana (11.8 percent) (See Table 4 [Excel]).