Spending on Social Welfare Programs in Rich and Poor States. Final Report.. 1. Purpose

07/01/2004

The study included site visits to six states for in-depth answers to questions about how state fiscal capacity affects state spending on social programs. We visited states with low fiscal capacity and high social needs to understand how such states coped with this seeming imbalance. Three questions were of particular interest:

  • How did states with the greatest needs and the least resources make financial decisions regarding their social welfare programs?
  • How did such states respond to short-run financial challenges, such as the recent state fiscal crises?
  • Why did some poor states spend more on needy populations than other poor states? And why did some spend more on certain programs and less on others?

Thus, we devised a research plan to (1) discern variation in spending levels and program emphases among poor states, (2) identify the processes of decision-making that affected spending on social programs as well as influences on those processes, (3) use this information to assess the credibility of hypotheses about differences in spending by poor states, and (4) examine how state decisions were affected by economic expansions and contractions, such as the recent downturn in state revenues in FYs 2001 and 2002.

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