How do states and counties pay for public services?

Everyone knows taxes are the main source of revenue for state and local governments, but federal funds play a big role, too. In fact, they are the second-largest source of state revenue. On average, federal grants account for nearly 36% of state revenue and, in some states, between 43% and 56%.

That’s a big deal and part of the reason Congress must approve a fully funded federal budget before the end of the year. Failure to do so would jeopardize public services in communities across the country in 2023.

At a time of high inflation and a fragile economic recovery, Congress needs to make sure that communities across the country can deliver the public services we all need. These include funding public health, highways, clean water treatment, child care and education, public safety, senior services and more. 

Because federal investments in state and county governments also help drive local economic growth, failure to act would increase the chances of a recession.

As the country emerges from the pandemic, demand on public services will continue to grow. It isn’t good enough, as some in Congress currently propose, to keep federal dollars the same as in the past. That’s why AFSCME is telling members of Congress that to support our communities in 2023, they must approve a fully funded federal budget.