A

SPENDING AT THE STATE AND LOCAL LEVELS

State Bureaucracy

Throughout his two terms as president, Eisenhower worked to curb the size of government. But an entirely separate layer of government bureaucracy had grown at the state and local levels. In 1950 only three states—New York, Pennsylvania, and California—had general revenues and borrowing over __BODY__ billion; state governments' total revenue and borrowing exceeded $13 billion, with tax revenues topping $11.8 billion. By 1959 seven states exceeded __BODY__ billion in revenues and borrowing, and California hit a whopping $3 billion in revenues. Even states traditionally considered "poor," such as Mississippi, took in more than $320 million. By 1960 general revenues and borrowing by the states exceeded $27 billion, of which taxes accounted for only $18 billion.

Local and State Spending

States dramatically increased their spending on highways over the decade, going from $567 million in 1950 to more than $7.3 billion in 1960. Expenditures on education soared; local funding of public secondary education in 1950 constituted 66 percent of all funding, while state and federal spending comprised 33 percent. A decade later local funding of public secondary education fell by 5 percent, and state and federal spending rose by 5 percent. In 1950 state spending on education and transfers for education totaled $2.8 billion; by 1959 it had risen to $8.1 billion.

State Borrowing Increases

State governments' debts grew as they increasingly borrowed to finance their activities. Borrowing accounted for approximately 10 percent of state funds in 1950, costing a total of $87 million in interest. By decade's end, borrowing had risen to nearly 30 percent, racking up interest payments of more than $2.5 billion. Some states, such as Montana, barely financed half their activities out of taxes. Others, such as Michigan, borrowed for only about 25 percent of their needs.