Where Do Local Governments Spend Money?

local-governments-spend-money Credit: Mike Mozart/CC-BY-2.0

Local governments allocate their financial resources to several federally mandated areas, including education, health care, transportation, corrections and public assistance. They also reserve roughly a quarter of their funds for town-oriented services such as plowing and road maintenance.

Within each category of expense, local governments divide funding even further. In the area of education, a majority of funds go to elementary school and secondary education facilities, which include middle schools and high schools. The remaining amount, generally less than 10 percent, goes to higher education. Health care receives the second highest volume of local funding; most goes to Medicaid. Transportation services, including trains and buses, receive approximately 10 percent of local funds, while 5 percent goes towards corrections and less than 2 percent to public assistance. Municipalities may use the remainder of their funds to maintain infrastructures, such as town libraries, parks and museums and sports and cultural facilities.