Spending on Social Welfare Programs in Rich and Poor States. Final Report.. 2. Overview of Data Sources and How the Data Were Used

07/01/2004

We considered several data sources on state spending for estimating the 50-state econometric model, including data from the U.S. Census Bureau (Census Bureau), the National Association of State Budget Officers (NASBO), the National Conference of State Legislatures (NCSL), and federal departments. No data source provides comprehensive, detailed measures of social services spending comparable across states and time. In addition, other sources are available for a limited number of states or covering limited periods of time. We relied primarily on the Census of Governments for data on spending by states and localities and estimated federal grants through intergovernmental revenues. Below, we summarize the primary data sources used in our analysis.

The Census Bureau collects finance data from state and local governments and aggregates these data for each state and year at the state level, providing information on revenue and expenditures of state government, revenue and expenditures for all local governments in aggregate within a state, and for state and local governments combined. The state and local expenditure data include state and local spending with federal grants. One of the largest and broadest expenditure categories, public welfare expenditure, amounted to $233 billion in state and local expenditures in fiscal year 2000.11

To measure social welfare spending, we aggregated several Census data categories. Exhibit II-1 breaks 2000 public welfare spending, in billions of dollars, into its detailed components, using the Census Bureau's codes and also shows how we aggregated the Census categories.

Spending Category Detailed Item in Census Data FY 2000 $
(billions)
Definition
Exhibit II-1.
State and Local Government Spending by Detailed Item, FY 2000
(in billions)
Cash Assistance E67
Federal Categorical Assistance
17.7 Includes AFDC or TANF cash assistance; federal Supplemental Security Income (SSI) when it passes through state accounts; and state SSI supplements
Note: The only federal SSI funds that pass through state accounts are retroactive federal payments reimbursing the state for payments made to individuals under state supplement programs; the total amounts are small
E68
Other Cash Assistance
3.0 Includes cash assistance programs not under federal categorical programs (e.g., general assistance, refugee assistance, home relief, and emergency relief)
Medicaid E74
Vendor Payments for Medical Care
155.0 Includes payments made directly to private vendors for medical assistance and hospital and health care (payments consist mostly of Medicaid/SCHIP)
Non-health Social Services E75
Vendor Payments for Other Purposes
2.1 Includes payments made directly to private vendors for services and commodities other than medical, hospital, and health care
E77, F77, G77 Welfare Institutions 1.2 Includes payments for provision, construction, and maintenance of nursing homes and welfare institutions owned and operated by a government for the benefit of needy persons
E79, F79, G79 Other Public Welfare 54.4 Includes operational payments for public employees in the sphere of public welfare; and payments for welfare programs such as child care, child welfare, adoption assistance, foster care, low-income energy assistance and weatherization, social services to the physically disabled, SSBG-funded programs, welfare-related community action programs, and temporary shelters and other services for the homeless
Public Hospitals E36, F36, G36 Own Hospitals (except federal veterans) 75.2 Includes payments for hospital facilities providing in-patient medical care and institutions primarily for the care and treatment of the disabled that are directly administered by a government as well as direct payments for acquisition or construction of hospitals
Non-social Welfare All Other Spending 1,309.0 Includes primarily elementary and secondary education, higher education, highways and public mass transit, police protection, financial administration, housing and community development, utilities (water supply and electric power), and sewerage

 

As shown in Exhibit II-1, there are six major categories of social welfare spending as defined in the Census as well as Own Hospitals, or state-run hospitals, which the Census does not count as part of social welfare spending. To estimate the model, we combined several categories of data. Federal Categorical Assistance and Other Cash Assistance were combined into a single Cash Assistance variable.12 Vendor Payments for Medical Care (chiefly Medicaid) served as its own category.13 The remaining three Census categories (Vendor Payments for Other Purposes, Welfare Institutions, and Other Public Welfare) were combined into a single Non-health Social Services category.14 Additionally, we created two more categories of spending from Census data, one for Public Hospitals shown in Exhibit II-1 as Own Hospitals and a residual category of all other spending that we called Non-social Welfare.

Per capita personal income was taken from BEA data and adjusted for inflation using the price deflator from the National Income Accounts. We measured the need variables by Bureau of Labor Statistics data (unemployment) and Bureau of Census data (poverty and population density).

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