SOURCES OF PUBLIC WELFARE FUNDS
The sources of funds for the maintenance of public welfare services, as in the case of some other governmental services, are numerous. Some of the public welfare funds are derived from the sale of farm and industrial products, from interest on bank deposits, and from fees for services rendered, but these constitute a small percentage of the total. By far the majority of such funds are derived from taxation. Federal, state, and local governments levy a great variety of taxes. Some of the federal collections are given to the states in the form of grants-in-aid, and some of the state funds are passed down to the local governments in the same form. In those states which require the counties to pay all or a part of the cost of maintaining persons in institutions, some of the county or other local taxes collected are turned over to the state agency which uses them in partial payment for the cost of services. Funds for immediate and pressing necessities may be borrowed, but eventually the loans are paid out of taxes collected, which means that borrowing is not a source of real income for public welfare purposes but is a device for maintaining services during a brief period when the cash available in the treasury is inadequate to meet the requirements of authorized services.
The means of securing revenue and the unit of government which secures it are determined by traditional practices, ease of administration of a particular tax, and the influence of pressure groups. Pauper relief has historically been a local responsibility and remains so to a large extent in most states. Consequently, until the differentiation of unemployment relief from other poor relief, which began in some of the states in 1931 and 1932 and in the federal government in 1933, the local government had to secure funds to pay for relief under the pauper laws. Because of long tradition and relative ease of collection, the means of securing funds for this service consist mainly of taxes on property. Hospitals for the insane have been and