Final answer:
Education and health care represent the two largest budget items for state and local governments, with education being the most significant. State governments often spend more on higher education, while local governments allocate significant funds to elementary and secondary education. Budget allocation patterns can have major impacts on university operations and funding.
Step-by-step explanation:
The two largest budget items generally representing a significant portion of an institution's budget, such as at the state and local levels, are education and health care. These expenditures dominate the budget charts, with education leading as the prime area of expenditure. For local governments, a vast amount of funding is allocated towards public education at the elementary and secondary levels. On the other side, state governments are inclined to spend more on higher education, although funds for public higher education have declined in some states due to decreased sales tax revenue from increasing internet commerce.
The federal budget also has its own set of major expenditures, with the majority allocated to Social Security, health care and health insurance programs, and defense, as noted in previous state and local spending patterns. It is essential for universities and state university systems to have a voice before the legislature, especially when budget cuts are considered, since funding decisions can impact their operations extensively.