Figure 3
State Revenue Growth Outpaces Population and Inflation, 199298
Actual Tax
R e v e n u e G r o w th ,
4 5 .3 %
199298
P o p u l a t i o n G ro w t h +
I n f la t i o n , 1 9 9 2 9 8
22.3%
0%
10%
20%
30%
40%
50%
State Spending Trends
to expand rapidly. Between 1990 and 1997
state government expenditures climbed by 56
in the 1990s
percent, from $572 billion to $894 billion in
current dollars. After adjusting for inflation,
With 031 of the state governorships now
In the 1990s
$50
that represents a 27.2 percent increase. Since
held by Republicans and with almost half the
state budgets
$475
1980 real state spending has increased by 78
state legislative chambers also controlled by the
have continued
percent.
GOP,$ 4 5 0would be natural to conclude that
it
1 9 9 8 r e v e n u e w i n d f a ll:
$ 7 5 . 2 b illion
As Table 1 shows, the2threerlargest compo-
states have moved in a more fiscally conserva-
to expand rapidly.
($ 78 pe capita)
$425
nents of state budgets are education, welfare,
tive direction in the 1990s. But that conclusion
and health. Health and hospital spending has
would 4be wrong. While the growth of federal
$ 00
been growing so rapidlyl thatRitvhasenow sup-
Actua Tax
e enu
govern3 7 5 nt spending has been slowing some-
me
$
planted highway spendingeasfethetn C a p ulargest
third l a t io n
what in the 1990s because of reductions in mil-
Tax Rev nu
wi h Po
G r o w th + I n l a t i o
p
$350
item in state budgets. Since 1980 state
itary spending, state budgets have continued
$325
Figur$e3 40
0
$75 Billion 9Revenue Windfall
19 2
1998
$500
$475
1998 revenue windfall:
$450
___
<
$75.2 billion
($278 per capita)
$425
$400
Actual Tax Revenue
$375
Tax Revenue with Population
Growth + Inflation Cap
$350
$325
$300
1992
1998
4