This report is an abbreviated version of a longer report that examined the effects of fiscal capacity on state spending choices regarding programs to support low-income populations. It focuses on the key findings of the project without including a lengthy technical description of the study’s methodology and detailed analysis. The project included a two-part study of state spending on social services. The first part used existing data sources to build a multi-variate, fifty-state model to examine social welfare spending choices made by states at different points in time. In the second part of the study, additional information was gathered through site visits to a half-dozen of the poorest states to develop a more detailed analysis of the spending decisions relating to social welfare programs. The report found that: 1) States with less fiscal capacity spent less per capita on social welfare than states with higher per capita incomes. 2) The distribution of federal funds neither greatly diminished nor greatly increased spending from state-generated revenue sources. 3) State fiscal capacity bore a stronger relationship to spending on non-health programs than on health-related programs. 4) Between 1977 and 2000, state spending on social services changed in major ways, and the changes differed between rich and poor states. For example, although Medicaid spending grew rapidly among all states, stronger growth occurred among the poorest states than among the richest states.
PIC ID: 8068.1; Agency Sponsor: ASPE-OHSP, Office of Human Services Policy; Federal Contact: Isaacs, Julia, 202-690-7507; Performer: Kevin McGowan, Rockville, MD