Can a state issue bonds?
State and local governments issue bonds to pay for large, expensive, and long-lived capital projects, such as roads, bridges, airports, schools, hospitals, water treatment facilities, power plants, courthouses, and other public buildings..
Are local governments funded by transfers from the state?
Local governments received about 32 percent of their general revenue from state government transfers (including indirect federal funds) and 4 percent directly from the federal government. … Meanwhile, housing-program transfers are about 40 percent of federal transfers to local governments.
Can states operate at a deficit?
However, there are only two real constraints on state and local governments that do not balance their budgets according to constitutional or legislative statute. … State and local governments do not really have the economic ability to run fiscal deficits to encourage aggregate demand like the federal government.
Which states are in the most debt?
US States With the Most DebtRankStateDebt Total (Billions)1California$152.802New York$139.203Massachusetts$77.004New Jersey$65.9046 more rows•Jun 17, 2019
Can US states issue debt?
State and local governments typically issue debt to finance the construction of capital facilities (e.g., buildings, roads, and airports). … The federal government subsidizes the cost of many state and local bonds by exempting any interest income they earn from federal income taxation.