Financial Assistance
provided by:

3.3 Total State Outlays

Some people feel the trend in general fund spending does not adequately represent the growth in state spending because it ignores the growth in other parts of the budget. The U.S. Department of Commerce data showing the history of total state government outlays (appropriations that actually hit the street) provide one way to measure growth in total government spending over time; also see the next section on appropriations.

(See also the Comparison to the U.S. average.)

Total state government outlays as reported by the U.S. Department of Commerce have continued to grow. (What is included in outlays?)

If we net out the Permanent Fund dividend, which the federal government includes in its definition of state government outlays, we see that there was a break in the growth of state outlays in 1994 and that they have been flat since that time.

Furthermore, if we subtract federal grants from outlays, we see that "Outlays from Own Sources" has been growing more slowly than total outlays.

If outlays in early years are converted to 1998 purchasing power (real 1998 $), we see that outlays excluding the Permanent Fund dividend have been trending downward, as have been outlays from own sources (net of the dividend and outlays financed by federal grants).

The trend in real per capita outlays has been clearly downward. Even including the Permanent Fund dividend, which has been increasing, real per capita outlays have been falling since the late 1980s. Real per capita outlays are now at the same level they were in about 1979.

State outlays as a share of personal income have been decreasing, although they are still much higher than at any time before the "petrodollar" boom. One line of reasoning suggests that there should be a stable relationship between public spending and personal income, reflecting a balance between public and private consumption.

State outlays have increased as a share of gross state product—value added. We can think of gross product as the tax base for the state.

Total public (state + local government) outlays as reported by the U.S. Department of Commerce have been increasing more slowly than state-only outlays because local government budgets have been growing more slowly than the state's. Tables reporting the combined outlays will be added to this section in the near future.

Fiscal Policy Papers