New Research Examines State-By-State Growth In Per Capita State Spending

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Posted by Jack Fencl on Tuesday, August 11th, 2020, 2:46 PM PERMALINK

State government spending nationwide has grown steadily over the past two decades, according to new research conducted by Americans for Tax Reform, utilizing data from the National Association of State Budget Officers and the Census Bureau. 

After controlling for inflation, average per capita state spending rose by 25.58% between 2000 and 2018, with the vast majority of the growth taking place between 2000 and 2010. In 2000, inflation adjusted average per capita state spending was $4,885.30. In 2010, inflation adjusted average per capita state spending was $6,033.84. By 2018, inflation adjusted average per capita state spending had risen to $6,134.97.   

Inflation adjusted average per capita state spending in most states spiked rapidly from 2000 - 2010, rising by an average of 23.51% that decade (the Bush years were bad for spending at both federal and state levels). After the 2010 wave election, average per capita state spending was held nearly flat, rising only 1.68% between 2010 and 2018. 

Between 2000 and 2018, inflation adjusted per capita state spending rose in 49 states. Only Florida saw a reduction in per capita spending since 2000, with the Sunshine State experiencing a 14.67% decline over the 18 year period. Florida was also the only state that had a decline in per capita state spending in the decade from 2000-2010. Today, Florida has the lowest per capita state spending at $3,696.19 (2018 dollars). This, coupled with the state’s lack of an income tax, its supermajority requirement for the state legislature to raise taxes, and its national leadership in expanding school choice make Florida a limited government success story. 

Twelve states saw their per capita spending grow by more than 40% over the last two decades, with the table below listing the ten states where spending grew most rapidly. West Virginia has the unfortunate distinction of leading the pack, with the Mountain State’s spending growing by an astonishing 79.89%. While this is certainly a dubious honor, West Virginia has made some progress in recent years, with per capita state spending declining by 26.21% between 2010 and 2018. 

10 States Where Per Capita State Spending Grew The Most Since 2000

State

% Per Capita Spending Growth ('00-'18)

West Virginia

78.89%

Colorado

77.07%

Vermont

70.24%

Wyoming

62.88%

Arkansas 

54.87%

North Dakota

51.77%

New York

49.04%

Montana 

45.68%

Pennsylvania 

45.50%

Maryland 

44.02%

 

On the flip side, the table below lists the ten states that did the best job at keeping spending under control over the past two decades. Among this group, the four states that stand out for their superb fiscal restraint are Florida, Missouri, South Carolina, and North Carolina. These are the only states that held per capita spending growth to single digits (with Florida seeing a real reduction) since the turn of the century. 

10 States Where Per Capita State Spending Grew The Least Since 2000

State

% Per Capita

Spending

Growth ('00-'18)

Florida

-14.67%

Missouri

1.66%

South Carolina

2.02%

North Carolina

2.64%

Georgia 

10.53%

Michigan

10.58%

Utah

10.72%

Idaho

11.11%

New Hampshire

13.14%

Maine

13.40%

 

Below is current (2018 data) per capita spending for all 50 states, ranked lowest to highest. The national average is $6,134.97.   

50 States 2018 Per Capita Spending, Ranked Lowest to Highest

State

2018 Per Capita Spending

Florida

$3,696.19 

Texas

$4,024.22 

Missouri

$4,253.45 

New Hampshire

$4,529.85 

Idaho

$4,548.89 

Utah

$4,689.64 

Nevada 

$4,711.40 

North Carolina

$4,800.02 

Georgia 

$4,889.48 

South Carolina

$4,967.79 

Indiana 

$5,021.43 

Tennessee

$5,049.01 

South Dakota

$5,072.28 

Arizona 

$5,238.04 

Kansas

$5,473.05 

Alabama

$5,577.70 

Michigan

$5,670.43 

Illinois 

$5,720.55 

Oklahoma 

$5,753.21 

Ohio

$5,967.88 

Washington

$6,116.67 

Virginia

$6,125.66 

Maine

$6,281.29 

Nebraska 

$6,305.00 

Montana 

$6,554.38 

Mississippi

$6,592.71 

Pennsylvania 

$6,633.04 

Louisiana 

$6,707.10 

California 

$6,833.68 

New Jersey

$6,839.39 

Colorado

$6,995.61 

Minnesota

$7,102.61 

Maryland 

$7,256.04 

Iowa

$7,426.12 

Kentucky

$7,633.00 

Wyoming

$7,661.00 

North Dakota

$7,768.31 

Wisconsin

$8,299.57 

Massachusetts

$8,299.87 

New York

$8,384.08 

Arkansas 

$8,518.03 

Rhode Island

$8,751.88 

Vermont

$9,089.34 

Connecticut

$9,282.32 

West Virginia

$9,342.73 

Oregon

$9,713.08 

New Mexico

$9,776.65 

Hawaii

$10,699.05 

Delaware

$11,234.84 

Alaska

$14,013.68 


An examination of what happened following the 2010 wave election, a period during which Republicans achieved a level of control in state legislatures not seen in roughly a century, shows that states exerted much more fiscal restraint compared to the previous decade. 

The table below lists the ten states that experienced the most precipitous decline in spending per capita between 2010 and 2018. While these ten saw the most dramatic cuts in per capita state spending, 22 states in total experienced a reduction over the period. The overwhelming majority of states where spending declined are Republican led, and in the historically blue states that saw spending drop, Republicans held power at some point over that eight year period.

10 States Where Per Capita State Spending Declined The Most After 2010

State

% Per Capita Spending Growth ('10-'18)

Wyoming

-50.97%

West Virginia

-26.21%

Mississippi

-25.30%

North Carolina

-18.16%

Louisiana 

-16.49%

Maine

-13.32%

Alaska

-11.03%

Utah

-10.32%

Oklahoma 

-10.04%

Massachusetts

-7.74%

 

On the flip side, some states saw their spending per capita continue to rise at an unsustainable clip after 2010. The table below lists the ten states where spending rose most rapidly from 2010-2018. This list is mostly comprised of blue states, with the usual culprits like Illinois, Hawaii, and New York seeing some of the most egregious spending growth. 

10 States Where Per Capita State Spending Grew The Most After 2010

State

% Per Capita Spending Growth ('10-'18)

Nevada 

33.42%

Illinois 

29.30%

Connecticut

18.39%

Hawaii

15.71%

New Mexico

13.97%

Alabama

12.45%

Kentucky

11.06%

Maryland 

9.96%

New York

9.50%

Minnesota

9.33%


Overall, two clear pictures emerge from the data. The first is that per capita state spending has been growing at an alarming rate over the past two decades. The second is that continued profligacy is not inevitable and that course correction can occur. The post-2010 state spending trends prove that it is possible for states to exercise fiscal restraint, provided that those in positions of power have the necessary political will and courage. 

[State spending comes from the National Association of State Budget Officers annual spending reports for years 20002010 and 2018. Population information provided by the United States Census Bureau.]

Photo Credit: Peter Fitzgerald

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