Research News

Where Does the Federal Money Go?

Most county governments are working hard to provide the services that their citizens want. They levy taxes, charge fees, establish special districts and in many other ways try to find revenue sources that don't regressively affect their residents.

Many counties also rely on state and federal entitlements, grants and other funding to meet the annual financial needs of their communities. These funds come in many forms, including direct entitlement payments, salaries, federal installations, subsidies, payments in lieu of taxes, grants and allocations from various programs.

In 1996, the federal government expended nearly $1.4 trillion in direct federal funds. Although much of this money is targeted for special purposes, it invariably assists with the local economy of the area.

Who gets the most?
Of the top 30 counties in the country for total federal dollars received, six are in California, four are in Texas and three each in Maryland and Florida. With more than $1 trillion coming to the area, Los Angeles County receives more federal expenditures than any other county area in the country. Nearly $40.9 billion dollars in federal money was expended there in 1996.

Los Angeles was followed closely by the New York City area with a total expenditure of $40.7 billion. These two county areas alone received more federal direct expenditures than 43 states.

Cook County, Ill. is third on the list with direct federal expenditures in 1996 of $23 billion. San Diego County, Calif. with federal expenditures of $16.7 billion is fourth and the St. Louis County, Mo. area, with federal expenditures of $12.1 billion, rounds out the top five. The top 10 counties received $13 out of every $100 spent by the federal government that year.

(Research News was written by Jacqueline Byers, research director.)