WASHINGTON—The U.S. federal government spent $ 3.1 trillion in states during fiscal 2013, and the spending varied widely from state to state, The Pew Charitable Trusts said Tuesday in a report.
The amount of federal spending was slightly down, compared to $3.23 trillion from the previous fiscal year, reported by U.S. Census Bureau.
The Pew report was designed to fill in a data gap left by the U.S. Census Bureau when it stopped the Consolidated Federal Funds Report in 2012. The former CFFP report had provided an annual look at the geographic distribution of federal spending for nearly three decades, but was discontinued. Pew used the publicly available data set, from Bureau of Economic Analysis and USAspending.gov, to re-create and extend CFFR's analysis for fiscal 2004 through 2013.
"Because of the state-by-state variation, a given federal budget decision, such as reductions in defense spending or changes to entitlement programs, can have widely different impacts across the country," said Anne Stauffer, director of Pew's fiscal federalism initiative.
Nationally, federal spending in the states in fiscal 2013 was found to be equivalent to 19%, nearly one-fifth, of states' economic activity, according to Pew's report. But each state had a different percentage relative to its own gross domestic product. They ranged from 32.9% in Mississippi, to 11.6% in Wyoming. The District of Columbia, had the most federal spending, accounting for as much as 42.3% its total economic activity.
Many factors, such as demographics, industry distribution, and state and local governmental decisions, resulted in differences in the makeup of federal spending across states. The effect of a given federal budget change had varied impacts due to each state's unique mix of federal spending. In Louisiana and Alaska, for example, both had the federal spending at about 18% of the state GDP in fiscal 2013. The spending on salaries and wages, however, was 4.4% for Alaska but only 1.4% for Louisiana. As a result, Alaska will be more exposed to the federal salary cuts than Louisiana.
Federal spending mainly included retirement benefits, nonretirement benefits, grants, contracts, and salaries and wages. Benefits payments to individuals made up for 61% of federal spending in states in fiscal 2013. Over 34%, about $1,061 billion, of the total spending went to retirement benefits, such as social security and employee pensions. Another 27%, $870 billion, went to nonretirement benefits including Medicare. Grants including Medicaid, at $506 billion, and contracts at $407 billion, made up 16% and 13% of total spending, respectively. Salaries and wages, at$304 billion, accounted for 10%.
Historically, total inflation-adjusted federal spending in the states increased 26%, to $3.1 trillion from $2.5 trillion, from fiscal 2004 to fiscal 2013. Every category except for grants increased over the past years.
