State and Local Spending Since 1962: DC, Alaska, Delaware, New Mexico and New York Growing Fastest Relative to Income

Marc JoffeCensus data shows, on average, state and local government spending as a  percentage of personal income rose sharply between 1962 and 1977, but then flattened out in the years leading up to 2020. However, there is substantial variation across jurisdictions: while some states have seen little overall change in the percentage of income devoted to government spending since 1962, others experienced dramatic growth.The animation below shows how state and local government spending have evolved in all fifty states and DC since 1962. Spending data comes from the Census Bureau ’s Annual Survey of State and Local Government Finances, and includes expenditures of federal funds as well as own‐​source revenue. State personal income data comes from the Bureau of Economic Analysis. We used personal income for the second quarter of each year, since June 30 is the most comm on fiscal year end date for U.S. state and local governments.In nominal terms, government spending has skyrocketed over the last sixty years. Evaluating spending as a  proportion of a national income measure (like personal income or GDP) over time corrects for inflation and economic growth.But the notion that government spending should remain a  constant proportion of personal income is open to debate. Some essential industries decline as a percentage of income as our society grows richer. For example, an analysis ofUSDA data shows that food expenditures (both at home and away from home) fell from 16 pe...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs