Essay Example: Virginia Revenue Sources and Expenditure

The Census Bureau of United States of America (2010) compiled and released the most recent Per Annum Surveys about the States and Local Government Finance Data in 2010. This data provided a sophisticated image of the State's sources of funds. In general, the State and Local governments acquire their income from diverse sources; however, the breakdown changes from one state to the other. These variations come in as a result of the differentiated tax perspectives, number, and types of natural or human-made resources available in different states, the intergovernmental transfers, and policy prioritization. The paper will be addressing the Virginia State biennial budget by the budget along with related processes such as sources of funds and the expenditure. The specific financial information used for this paper includes the data between the 2008 and 2010 biennial fiscal year as reflected in the Appropriation Act of 2009 (US Department of Commerce, Bureau of Economic Analysis, 2010).

Sources of Funds for Virginia State

According to Ryan Forster & Kail Padgitt, (2010), the Virginia State's GDP in the biennial fiscal year between 2008 and 2010 is roughly estimated to be around $383 billion. The "per capita income" of each was $ 35,477. Following this high income of the state's funds, there are substantial sources of funds. These sources include the following:

The state of Virginia mainly generates its funds and finances from "taxes, grants, fees, sales, earnings and transfers, and balances." For instance, in the biennium year, 2008 to 2010, the total Virginia State resources present for appropriation projects was equal to around $81.9 billion, plus the year-end "balances, transfers and bond proceeds." The total revenues collected from every tax source accrued to approximately $35.7 billion. In addition to that, the tax revenues included $19.7 billion from the individual income taxes. The motor vehicle as well as highway taxes accumulated to around 4.3 billion. The federal grants funded by the National Government included $18.0 billion while the revenue from the institutions; the fees generated by the learning and medical institutions such as "colleges, universities, medical and mental hospitals" added up to 10.0 billion. The Virginia state revenue generation or sources can, therefore, be divided into two broad categories; 1) the general and 2) the non-general funds (Ryan Forster & Kail Padgitt, 2010). The non-general funds offer half and above revenue (58.7%) of the total revenue generated by the state government (Ryan Forster & Kail Padgitt, 2010).

On the other hand, the general fund revenues add up to 41.3% of the total budget. This revenue is mainly obtained from; 1) individual income taxes ($19.7) billion. These are the taxes given directly by the citizens and businesses. 2) Corporate taxes ($1.4 billion); these are the taxes given by corporations together with businesses on their income. 3) Sales and use taxes ($6.1) billion; these are taxes generated from citizens and businesses on goods they purchase. 4) Insurance premium taxes ($540.6) billion: these are the taxes generated from the payments done by the insurance companies on premiums (Ryan Forster & Kail Padgitt, 2010).

The non-general sources of revenue in the state of Virginia is the main source of funds and revenue (Ryan Forster & Kail Padgitt, 2010). The revenue from this sector is guided by the regulation or law for particular tasks. The significant sources of revenue generated as non-general sources include the federal grants which add up to $18.0 billion. The second revenue generated is the institutional fee which makes $10.0 billion. The state transportation revenues is another source mainly obtained from the vehicle fuel taxes, the motor vehicle purchases, road taxes among other taxes (Ryan Forster & Kail Padgitt, 2010).

PCI = i/P where

i = total personal income

P = total population

Hence; = $383,000,000,000/10,795,726 = $35,477

Percentile amount = 50/100 * $383 billion = $191.5 billion

State of Virginia Funds Expenditure

The state of Virginia government uses the biennium form of the budget. From the total revenue generated by the state government, the government budgets from both the operating budget as well as capital budget. The operating budget is the budget done to pay the bills for the government's daily running activities while the capital budget involves the funds set apart for constructing new government infrastructures, improvement, and repair of the government facilities (Ryan Forster & Kail Padgitt, 2010). The budgetary of the "Commonwealth for the 2008-2010 biennium years" allocated $73.0 billion to cater for operating bills while $1.8 billion went to the capital budget.

Therefore, the major expenditures of the state of Virginia revenue finances include education (36.4%), health and human resources (30.4%), commerce and trade (4.6%), transportation (18.4%) and public safety (3.9%).

Put the consideration of general funds only, the states government expenditure can be used at the exclusive of General Assembly and the Governor to fund various government responsibilities such as education (38.2%), health and human resources (29.6%), public safety (6.5%), transportation (11.0%), general Government (7.7%) and other (7.0).

When considering the non-general fund's expenditure, the law embarks the finances to specific tasks. The major expenditure includes "education (40.9%), health and human resources (28.5%), finance (10.8%), Administration (4.0%), public safety (10.4% and other areas of state government (5.5%)."

PCI = i/P where

i = total personal income

P = total population

Hence; = $74,800,000,000/10,795,726 = $6,928

Percentile amount = 50/100 * $74.8 billion = $37.4 billion

In conclusion, Virginia State generates its revenue from taxes (such as corporate taxes, individual taxes, and business taxes), funds and grants from the federal government, institutional fees, and sales. On the other hand, the major expenditure in the state of Virginia includes education, health and human resources, transportation, public safety, general government projects (like administration, finance, payment of salaries) and finally, commerce and trade (Ryan Forster & Kail Padgitt, 2010).

References

Ryan Forster & Kail Padgitt, (2010). Where Do State and Local Governments Get Their Tax Revenues?, Tax Foundation Fiscal Fact No. 242 (August 27, 2010), https://files.taxfoundation.org/docs/ff242.pdf.

U.S. Census Bureau, State & Local Government Finance, fiscal year (2010). http://www.census.gov/govs/estimate/.

US Department of Commerce, Bureau of Economic Analysis (2010). BEA National Economic Accounts: Current-dollar and real GDP.