In the 1990s state
The Biggest Spending States
Medicaid spending has doubled from 8 to 16
percent of total state budgets. In percentage
The nationwide spending totals for the
outlays have
terms, public welfare, administration, interest
states mask the huge diversity in budget
grown at an
on general debt, and especially corrections
trends among the states. Table 2 shows that
annual rate of 1.3
have also been high-growth areas in state bud-
the spending trends in individual states varied
gets since 1980.
from a high of 58.8 percent in Oregon to
percent above
No matter how it is measured, state spend-
Alaska's 0.6 percent decline in real spending.
income growth.
ing has accelerated in the 1990s. As Figure 5
Alaska was the only state with an absolute
shows, real state spending has even been grow-
decline in spending, and that was a result of
ing slightly faster in the 1990s than it did in
the drop in oil prices, which has severely
the 1980s--when many state budgets doubled
reduced the state's oil tax revenues.
in size.6 State expenditures expanded by 3.4
· Three states increased real spending by
percent per year in the 1980s, after adjusting
for inflation, compared to a 3.5 percent
more than 50 percent from 1990 to
growth rate in the 1990s. On a per capita basis,
1997: Oregon (58.8 percent), Texas
real state spending has grown by 2.5 percent
(52.9 percent), and Mississippi (51.5
per year in the 1990s, slightly faster than in the
percent).
· Three other states increased real spend-
1980s.
State spending per $1,000 of personal
ing by less than 10 percent from 1990 to
income nudged upward by 0.1 percent per year
1997: Alaska (0.6 percent decline),
in the 1980s. In the 1990s state outlays have
Wyoming (5.5 percent), and Rhode
grown at an annual rate of 1.3 percent above
Island (8.1 percent).
income growth. And there is no sign of a
spending slowdown. Since 1996 state general
To control for differences in state popula-
fund spending has accelerated to 3.1 percent
tions, government spending and tax figures
of real growth per year, compared to the 1.7
are often measured on a per capita basis.
percent per year growth rate from 1990 to
Table 3 shows the 10 states where real per
1996.7
capita state spending increased the most
Table 1
Shifting Spending Priorities: State Spending by Function (in millions of 1997 dollars)
198097 Real Increase
1980
1990
1997
Mil. $
Percentage
Education
$171,420
$226,694
$275,821
$104,401
61%
Public welfare
$86,198
$128,957
$203,204
$117,006
136%
Health and hospitals
$34,805
$52,411
$63,193
$28,388
82%
Highways
$48,819
$54,360
$60,204
$11,385
23%
Correction
$8,673
$21,212
$29,043
$20,370
235%
Governmental administration
$13,624
$22,556
$28,656
$15,033
110%
Interest on general debt
$13,183
$26,452
$26,310
$13,127
100%
Natural resources
$8,471
$12,173
$12,909
$4,437
52%
Police protection
$4,412
$6,346
$7,501
$3,089
70%
Parks and recreation
$3,012
$3,432
$3,900
$888
29%
Other and unallocable
$52,262
$69,332
$77,434
$25,173
48%
5