Runaway Spending: A Bipartisan Problem

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Posted by Patrick Gleason, Nathaniel Rome on Friday, June 26th, 2015, 9:44 AM PERMALINK

In a time when it seems like Republicans and Democrats cannot agree on anything, there is something that appears to have bipartisan agreement: overspending. In an analysis of state government spending in all 50 states, it is clear that all state governments are growing at an unsustainable rate, some more so than others.  

A reasonable baseline is for a state to adjust spending in line with inflation and population changes. Americans for Tax Reform used the Tax Foundation’s handy state spending calendar to find out how state spending over the last decade compared to inflation and population growth. The chart below shows how cumulative state spending in all 50 states has increased at a much faster rate than population growth and inflation. The orange line below shows change in population and inflation from 1999 to 2009. The blue line represents growth in total state government spending during that period.

First, here is the national trend, looking at all 50 states:


(Source: U.S. Census Bureau, Tax Foundation)

This information is more useful if we break it down state-by-state to see who the worst offenders of overspending are. Below is a table of each state and the percent that they overspent beyond the rate of growth the population and inflation over the 10 year period from 1999 to 2009:

State

Overspending  Percent

California

36%

Wyoming

33%

Oklahoma

31%

Mississippi

31%

Kansas

31%

Wisconsin

31%

South Carolina

27%

Rhode Island

27%

Florida

27%

Maine

26%

New Mexico

25%

Indiana

25%

Colorado

24%

Nebraska

24%

Vermont

24%

Pennsylvania

24%

Kentucky

23%

Illinois

23%

Louisiana

23%

Ohio

23%

Maryland

23%

Arkansas

23%

Minnesota

22%

New Jersey

22%

Missouri

22%

Arizona

22%

Delaware

22%

North Carolina

22%

Iowa

21%

Alabama

21%

Idaho

20%

Texas

20%

Tennessee

20%

Michigan

19%

Montana

19%

New York

18%

Alaska

18%

Virginia

16%

Washington

16%

Georgia

16%

North Dakota

16%

Massachusetts

16%

South Dakota

16%

Hawaii

15%

West Virginia

14%

Oregon

14%

Connecticut

14%

Utah

12%

New Hampshire

9%

Nevada

8%

(Source: U.S. Census Bureau, Tax Foundation)

The biggest overspender is (unsurprisingly) California. California alone overspent by nearly $347 billion – more than the GDP of Denmark – over the decade from 1999 to 2009. But what is surprising is that each and every state overspent by billions of dollars. 33 states overspent by more than 20 percent beyond the rate of growth in population and inflation, and all but two states overspent by at least 10 percent.

State budgets have been a mixed bag this year, with some states confronting shortfalls and some who have surpluses. For state lawmakers still grappling with how to balance a budget – either through cutting spending, raising taxes, or a combination of the two – the numbers demonstrate that the problem is on the spending side of the ledger.

 

 
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