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Capitol Planning Region – Government Finance

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Government finances play a pivotal role in shaping the local economy, influencing economic growth, stability, and the overall well-being of communities. The impact of government finances on the local economy can be analyzed through several key mechanisms, including public spending, taxation, debt management, and fiscal policies. These elements collectively determine the flow of resources, the level of economic activity, and the quality of life for residents.

  1. Public Spending and Investment One of the most direct ways government finances affect the local economy is through public spending. Governments allocate funds to infrastructure projects, education, healthcare, public safety, and social services. These investments create jobs, stimulate demand for goods and services, and enhance the productivity of the local workforce. For instance, building roads, bridges, and public transportation systems not only provides immediate employment opportunities but also improves connectivity, reducing transportation costs for businesses and facilitating trade. Similarly, investments in education and healthcare contribute to a skilled and healthy workforce, which is essential for long-term economic growth.

  2. Taxation Policies Taxation is another critical component of government finances that impacts the local economy. Taxes fund public services and infrastructure, but they also influence the behavior of individuals and businesses. High tax rates can discourage investment and consumption, potentially stifling economic growth. Conversely, low tax rates may attract businesses and stimulate spending but can lead to budget deficits if not managed properly. Progressive taxation, where higher-income individuals pay a larger share, can reduce income inequality and increase disposable income for lower-income households, boosting local demand for goods and services.

  3. Debt Management Government borrowing and debt management also have significant implications for the local economy. When governments borrow to finance deficits or invest in long-term projects, they can stimulate economic activity in the short term. However, excessive debt can lead to higher interest rates, crowding out private investment, and increasing the risk of financial instability. Effective debt management ensures that borrowing is sustainable and that funds are used efficiently to generate economic returns.

  4. Fiscal Policies Fiscal policies, including government spending and taxation, are tools used to manage economic cycles. During economic downturns, expansionary fiscal policies, such as increased spending and tax cuts, can stimulate demand and help the economy recover. Conversely, during periods of high inflation, contractionary fiscal policies, such as reduced spending and higher taxes, can help cool down the economy. The timing and effectiveness of these policies are crucial in stabilizing the local economy and maintaining public confidence.

  5. Social and Economic Equity Government finances also play a role in promoting social and economic equity. Redistributive policies, such as social welfare programs and subsidies, can reduce poverty and inequality, leading to a more inclusive economy. By providing a safety net for vulnerable populations, governments can ensure that all residents have access to basic needs, which in turn supports overall economic stability and growth.

  6. Conclusion In summary, government finances have a profound impact on the local economy through public spending, taxation, debt management, and fiscal policies. Effective management of these financial tools can stimulate economic growth, reduce inequality, and enhance the quality of life for residents. Conversely, poor financial management can lead to economic instability, reduced investment, and social unrest. Therefore, it is essential for governments to adopt prudent fiscal policies and ensure that financial resources are allocated efficiently and equitably to support sustainable economic development.

A key indicator for comparison is how much government collects, spends and and establishes debt for each resident under its perview.

The revenue per resident at the local level is:

6,947.35

The expenses per resident at the local level is:

6,680.28

The outstanding debt per resident at the local level is:

6,053.14

 
CapitolConnecticutNational



LocalLocalLocalLocalStateState
PerContri-PerContri-PerContri-
LocalPer CentStatePer CentCapitabutionNationalPer CentCapitabutionCapitabution
Description(,000's)Per Capitato Total(,000's)Per Capitato TotalIndexIndex(,000's)Per Capitato TotalIndexIndexIndexIndex

Revenue2,344,548,4806,947.35100.0001,000.00100.006.951.0001,000.00100.006.951.000.000.00

  General revenue2,168,968,4006,427.0792.5101,000.00100.006.430.9301,000.00100.006.430.930.000.00

    Intergovernmental revenue808,559,1482,395.9234.4901,000.00100.002.400.3401,000.00100.002.400.340.000.00
      From Federal government146,274,793433.446.2401,000.00100.000.430.0601,000.00100.000.430.060.000.00
      From State government662,284,3551,962.4828.2501,000.00100.001.960.2801,000.00100.001.960.280.000.00
      From local government00.000.0001,000.00100.000.000.0001,000.00100.000.000.000.000.00

    General revenue from own sources1,360,409,2524,031.1558.0201,000.00100.004.030.5801,000.00100.004.030.580.000.00
      Taxes894,124,7052,649.4638.1401,000.00100.002.650.3801,000.00100.002.650.380.000.00
        Property627,434,2421,859.2126.7601,000.00100.001.860.2701,000.00100.001.860.270.000.00
        Sales & gross receipts165,801,503491.307.0701,000.00100.000.490.0701,000.00100.000.490.070.000.00
          General sales125,994,306373.355.3701,000.00100.000.370.0501,000.00100.000.370.050.000.00
          Selective sales39,807,197117.961.7001,000.00100.000.120.0201,000.00100.000.120.020.000.00
            Motor fuel sales1,892,6875.610.0801,000.00100.000.010.0001,000.00100.000.010.000.000.00
            Alcoholic beverage sales845,0352.500.0401,000.00100.000.000.0001,000.00100.000.000.000.000.00
            Tobacco product sales318,8170.940.0101,000.00100.000.000.0001,000.00100.000.000.000.000.00
            Public utilities15,744,64746.650.6701,000.00100.000.050.0101,000.00100.000.050.010.000.00
            Other selective sales21,006,01162.240.9001,000.00100.000.060.0101,000.00100.000.060.010.000.00
        Individual income tax44,730,192132.541.9101,000.00100.000.130.0201,000.00100.000.130.020.000.00
        Corporate income tax11,009,92732.620.4701,000.00100.000.030.0001,000.00100.000.030.000.000.00
        Motor vehicle license2,263,6136.710.1001,000.00100.000.010.0001,000.00100.000.010.000.000.00
        Other taxes42,885,228127.081.8301,000.00100.000.130.0201,000.00100.000.130.020.000.00

      Charges & misc general revenue466,284,5471,381.6919.8901,000.00100.001.380.2001,000.00100.001.380.200.000.00
        Current charges365,048,3361,081.7115.5701,000.00100.001.080.1601,000.00100.001.080.160.000.00
          Education19,143,89456.730.8201,000.00100.000.060.0101,000.00100.000.060.010.000.00
            Institution of higher education7,681,25722.760.3301,000.00100.000.020.0001,000.00100.000.020.000.000.00
            School lunch sales (gross)1,566,4414.640.0701,000.00100.000.000.0001,000.00100.000.000.000.000.00
          Hospitals124,953,811370.265.3301,000.00100.000.370.0501,000.00100.000.370.050.000.00
          Highways10,287,28930.480.4401,000.00100.000.030.0001,000.00100.000.030.000.000.00
          Air transportation (airports)22,414,40266.420.9601,000.00100.000.070.0101,000.00100.000.070.010.000.00
          Parking facilities2,924,3498.670.1201,000.00100.000.010.0001,000.00100.000.010.000.000.00
          Sea and inland port facilities4,760,82614.110.2001,000.00100.000.010.0001,000.00100.000.010.000.000.00
          Natural resources2,531,1967.500.1101,000.00100.000.010.0001,000.00100.000.010.000.000.00
          Parks and recreation9,708,20828.770.4101,000.00100.000.030.0001,000.00100.000.030.000.000.00
          Housing and comm development7,308,73521.660.3101,000.00100.000.020.0001,000.00100.000.020.000.000.00
          Sewerage68,695,647203.562.9301,000.00100.000.200.0301,000.00100.000.200.030.000.00
          Solid waste management21,694,93864.290.9301,000.00100.000.060.0101,000.00100.000.060.010.000.00
          Other charges70,625,041209.283.0101,000.00100.000.210.0301,000.00100.000.210.030.000.00

        Miscellaneous general revenue101,236,211299.984.3201,000.00100.000.300.0401,000.00100.000.300.040.000.00
          Interest earnings10,227,01630.300.4401,000.00100.000.030.0001,000.00100.000.030.000.000.00
          Special assessments15,026,42544.530.6401,000.00100.000.040.0101,000.00100.000.040.010.000.00
          Sale of property3,784,73711.210.1601,000.00100.000.010.0001,000.00100.000.010.000.000.00
          Other general revenue72,198,033213.943.0801,000.00100.000.210.0301,000.00100.000.210.030.000.00

  Utility revenue173,592,043514.397.4001,000.00100.000.510.0701,000.00100.000.510.070.000.00
    Water supply80,167,107237.553.4201,000.00100.000.240.0301,000.00100.000.240.030.000.00
    Electric power78,135,733231.533.3301,000.00100.000.230.0301,000.00100.000.230.030.000.00
    Gas supply7,630,12322.610.3301,000.00100.000.020.0001,000.00100.000.020.000.000.00
    Transit7,659,08022.700.3301,000.00100.000.020.0001,000.00100.000.020.000.000.00

  Liquor store revenue1,988,0375.890.0801,000.00100.000.010.0001,000.00100.000.010.000.000.00

  Insurance trust revenue162,8580.480.0101,000.00100.000.000.0001,000.00100.000.000.000.000.00
    Unemployment compensation162,8580.480.0101,000.00100.000.000.0001,000.00100.000.000.000.000.00
    Employee retirement00.000.0001,000.00100.000.000.0001,000.00100.000.000.000.000.00
    Workers' compensation00.000.0001,000.00100.000.000.0001,000.00100.000.000.000.000.00
    Other insurance trust revenue00.000.0001,000.00100.000.000.0001,000.00100.000.000.000.000.00

Expenditure2,254,418,5176,680.28100.0001,000.00100.006.681.0001,000.00100.006.681.000.000.00

  Intergovernmental expenditure00.000.0001,000.00100.000.000.0001,000.00100.000.000.000.000.00
  Direct expenditure2,254,418,5176,680.28100.0001,000.00100.006.681.0001,000.00100.006.681.000.000.00
    Current operation1,887,390,8875,592.7083.7201,000.00100.005.590.8401,000.00100.005.590.840.000.00
    Capital outlay284,581,195843.2712.6201,000.00100.000.840.1301,000.00100.000.840.130.000.00
      Construction284,581,195843.2712.6201,000.00100.000.840.1301,000.00100.000.840.130.000.00
    Assistance and subsidies2,376,9447.040.1101,000.00100.000.010.0001,000.00100.000.010.000.000.00
    Interest on debt80,069,491237.263.5501,000.00100.000.240.0401,000.00100.000.240.040.000.00
    Insurance benefits and repayments39,9940.120.0001,000.00100.000.000.0001,000.00100.000.000.000.000.00
    Exhibit: salaries & wages525,546,0041,557.2923.3101,000.00100.001.560.2301,000.00100.001.560.230.000.00

  Direct expenditure by function2,254,418,5176,680.28100.0001,000.00100.006.681.0001,000.00100.006.681.000.000.00
    Direct general expenditure2,024,660,7925,999.4689.8101,000.00100.006.000.9001,000.00100.006.000.900.000.00
      Capital outlay233,677,777692.4310.3701,000.00100.000.690.1001,000.00100.000.690.100.000.00


Education services:
      Other direct general expenditure1,790,983,0155,307.0379.4401,000.00100.005.310.7901,000.00100.005.310.790.000.00
      Education862,837,2522,556.7538.2701,000.00100.002.560.3801,000.00100.002.560.380.000.00
          Capital outlay89,314,081264.653.9601,000.00100.000.260.0401,000.00100.000.260.040.000.00
        Higher education46,067,730136.512.0401,000.00100.000.140.0201,000.00100.000.140.020.000.00
          Capital outlay5,394,84215.990.2401,000.00100.000.020.0001,000.00100.000.020.000.000.00
        Elementary & Secondary education814,392,5782,413.2036.1201,000.00100.002.410.3601,000.00100.002.410.360.000.00
          Capital outlay83,919,239248.673.7201,000.00100.000.250.0401,000.00100.000.250.040.000.00
        Other education2,376,9447.040.1101,000.00100.000.010.0001,000.00100.000.010.000.000.00
      Libraries13,625,82240.380.6001,000.00100.000.040.0101,000.00100.000.040.010.000.00


Social services and income maintenance:
      Public welfare67,699,317200.613.0001,000.00100.000.200.0301,000.00100.000.200.030.000.00
        Other public welfare67,699,317200.613.0001,000.00100.000.200.0301,000.00100.000.200.030.000.00
      Hospitals141,312,054418.736.2701,000.00100.000.420.0601,000.00100.000.420.060.000.00
        Capital outlay6,546,84619.400.2901,000.00100.000.020.0001,000.00100.000.020.000.000.00
      Health77,108,561228.493.4201,000.00100.000.230.0301,000.00100.000.230.030.000.00
      Social insurance administration35,9470.110.0001,000.00100.000.000.0001,000.00100.000.000.000.000.00
      Veterans' services00.000.0001,000.00100.000.000.0001,000.00100.000.000.000.000.00

Transportaion:
      Highways82,616,882244.813.6601,000.00100.000.240.0401,000.00100.000.240.040.000.00
        Capital outlay30,060,50189.081.3301,000.00100.000.090.0101,000.00100.000.090.010.000.00
      Air transportation (airports)28,556,24984.621.2701,000.00100.000.080.0101,000.00100.000.080.010.000.00
      Parking facilities2,108,1706.250.0901,000.00100.000.010.0001,000.00100.000.010.000.000.00
      Sea and inland port facilities4,034,90811.960.1801,000.00100.000.010.0001,000.00100.000.010.000.000.00

Public safety:
      Police protection119,298,947353.515.2901,000.00100.000.350.0501,000.00100.000.350.050.000.00
      Fire protection64,033,823189.742.8401,000.00100.000.190.0301,000.00100.000.190.030.000.00
      Correction32,595,24396.591.4501,000.00100.000.100.0101,000.00100.000.100.010.000.00
        Capital outlay915,2972.710.0401,000.00100.000.000.0001,000.00100.000.000.000.000.00
      Protective inspection & regulation7,062,87020.930.3101,000.00100.000.020.0001,000.00100.000.020.000.000.00

Environment and housing:
      Natural resources13,342,66139.540.5901,000.00100.000.040.0101,000.00100.000.040.010.000.00
        Capital outlay4,485,96313.290.2001,000.00100.000.010.0001,000.00100.000.010.000.000.00
      Parks and recreation43,717,263129.541.9401,000.00100.000.130.0201,000.00100.000.130.020.000.00
        Capital outlay10,096,60129.920.4501,000.00100.000.030.0001,000.00100.000.030.000.000.00
      Housing and comm development58,336,344172.862.5901,000.00100.000.170.0301,000.00100.000.170.030.000.00
      Sewerage68,504,527202.993.0401,000.00100.000.200.0301,000.00100.000.200.030.000.00
        Capital outlay23,319,98269.101.0301,000.00100.000.070.0101,000.00100.000.070.010.000.00
      Solid waste management28,653,83084.911.2701,000.00100.000.080.0101,000.00100.000.080.010.000.00
        Capital outlay1,863,1165.520.0801,000.00100.000.010.0001,000.00100.000.010.000.000.00

Governmental administration:
      Financial administration23,707,42470.251.0501,000.00100.000.070.0101,000.00100.000.070.010.000.00
      Judicial and legal27,887,73782.641.2401,000.00100.000.080.0101,000.00100.000.080.010.000.00
      General public buildings13,643,40540.430.6101,000.00100.000.040.0101,000.00100.000.040.010.000.00
      Other governmental administration37,267,357110.431.6501,000.00100.000.110.0201,000.00100.000.110.020.000.00
      Interest on general debt66,807,524197.962.9601,000.00100.000.200.0301,000.00100.000.200.030.000.00

General expenditures, n.e.c.:
      Misc commercial activities2,707,8798.020.1201,000.00100.000.010.0001,000.00100.000.010.000.000.00
      Other and unallocable137,158,796406.436.0801,000.00100.000.410.0601,000.00100.000.410.060.000.00

Utility expenditures:
    Utility expenditure228,078,201675.8410.1201,000.00100.000.680.1001,000.00100.000.680.100.000.00
        Capital outlay50,897,505150.822.2601,000.00100.000.150.0201,000.00100.000.150.020.000.00
      Water supply82,479,587244.403.6601,000.00100.000.240.0401,000.00100.000.240.040.000.00
      Electric power73,696,368218.383.2701,000.00100.000.220.0301,000.00100.000.220.030.000.00
      Gas supply7,182,24421.280.3201,000.00100.000.020.0001,000.00100.000.020.000.000.00
      Transit64,720,002191.782.8701,000.00100.000.190.0301,000.00100.000.190.030.000.00

Liquor store expenditures:
    Liquor store expenditure1,679,5244.980.0701,000.00100.000.000.0001,000.00100.000.000.000.000.00

Insurance trust expenditures:
    Insurance trust expenditure39,9940.120.0001,000.00100.000.000.0001,000.00100.000.000.000.000.00
      Unemployment compensation39,9940.120.0001,000.00100.000.000.0001,000.00100.000.000.000.000.00
      Employee retirement00.000.0001,000.00100.000.000.0001,000.00100.000.000.000.000.00
      Workers' compensation00.000.0001,000.00100.000.000.0001,000.00100.000.000.000.000.00
      Other insurance trust00.000.0001,000.00100.000.000.0001,000.00100.000.000.000.000.00

Debt outstanding2,042,775,1706,053.14100.0001,000.00100.006.051.0001,000.00100.006.051.000.000.00

  Short-term debt outstanding28,356,92884.031.3901,000.00100.000.080.0101,000.00100.000.080.010.000.00
  Long-term debt outstanding2,014,418,2425,969.1198.6101,000.00100.005.970.9901,000.00100.005.970.990.000.00

Long-term debt issued264,717,314NANA0NANANANA0NANANANANANA
Long-term debt retired218,916,559NANA0NANANANA0NANANANANANA


Sources: STI: PopStats and STI: Colossus