Profile of Government Finance in New England

The Profile of Government Finance provides a concise summary of state and local tax revenues and expenditures in New England.

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State and Local Tax Revenues by Source as a Percent of Total Tax Revenues, 2000

chart depicting State and Local Tax Revenues by Source
Source: U.S. Census Bureau last updated: August 14, 2003
State and local governments collect tax revenues from a variety of sources. These taxes can be classified into seven broad categories: property, general sales, selective sales, individual income, corporate income, motor vehicle, and all others. The proportion of each source of revenue within the overall mix varies significantly from state to state. In New England, state governments rely primarily upon personal income taxes and general sales taxes for revenue, while local governments rely on property taxes. The one exception in the region is New Hampshire. The only New England state without either a broad based tax on personal income or a sales tax, New Hampshire’s statewide property tax accounts for over 60 percent of overall state and local tax revenue.

 

Per Capita State and Local Spending by Function, 2002

chart depicting Per Capita State and Local Spending by Function
Source: U.S. Census Bureau last updated: August 14, 2003

On a per capita basis, Connecticut, Massachusetts, New Hampshire, and Vermont’s state and local governments spend more on elementary and secondary education than on any other function. The share of these expenses that are picked up by each level of government varies from state to state and school district to school district. New Hampshire and Vermont, for example, impose statewide property taxes and redistribute revenues locally based on need. The remaining New England states fund K-12 education primarily through local property taxes, supplemented by state funds. The second largest category of spending in the region, and the largest for Maine and Rhode Island, is social services. These expenditures, primarily at the state level, fund programs like Medicaid and Temporary Aid to Needy Families.

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