Regional Patterns in the Expenditures of American States

• Author: Ira Sharkansky
• DOI: 10.1177/106591296702000411
• Published date: 01 December 1967
• Date: 01 December 1967
• Subject Matter: Articles

REGIONAL PATTERNS IN THE EXPENDITURES
OF AMERICAN STATES
IRA SHARKANSKY
University of Georgia
HIS
IS A STUDY
of regional patterns in the expenditures of American state
a
governments. The available literature on government revenue and spending
indicates that jurisdictions having high levels of personal income, industriali-
zation, and urbanization score highest with respect to government spending per cap-
ita.1 However, existing studies fall short of supporting the simple conclusion that
states in the regions that score high on these economic characteristics spend the most
money per capita. Fabricant, Fisher, Sachs and Harris deal with the aggregates of
state and local government expenditures within each state. ~ As a result, their findings
may not apply to the expenditures of state governments, per se. Dawson and Robin-
son, Dye, and Hofferbert examine relationships between economic conditions and
certain state government finances, but they are more concerned with the impact of
selected political and economic characteristics on revenue, spending and program
qualities than with obtaining the fullest possible explanation of variations in financial
activity.3 Because they limit themselves to a consideration of too few political char-
acteristics (two-party competition and/or the equity of legislative apportionment),
I
their findings concerning the overriding importance of economic characteristics are
only suggestive.
As part of a continuing study of influences upon state government activities, this
examination of regional patterns in expenditures should clarify some of the political-
economic processes that accompany spending decisions. Its focal questions are:
(1) What patterns exist in the regions of the United States with respect to state
government expenditures?
( 2 ) What characteristics account for the regional patterns in state government
expenditures?
NOTE: The research for this paper has been financed by a grant from the Social Science Re-
search Council. The author has profited from the technical assistance of Mr. Richard
Eiswirth and the Computer Center of Florida State University, and from numerous con-
versations with Professor James Dyson of Florida State University, Professor Bob Zimring
of the University of Maryland, and Professors Clara Penniman and Herbert Jacob of the
University of Wisconsin.
1
See Solomon Fabricant, The Trend of Government Activity in the United States Since 1900
(New York, 1952); Glenn W. Fisher, "Interstate Variation in State and Local Govern-
ment Expenditure," National Tax Journal, 17 (March 1964), 57-64; Seymour Sachs and
Robert Harris, "The Determinants of State and Local Government Expenditures and
Intergovernmental Flow of Funds," National Tax Journal, 17 (March 1964), 75-85;
Roy W. Bahl, Jr., and Robert J. Saunders, "Determinants of Changes in State and Local
Government Expenditures," National Tax Journal, 18 (March 1965), 50-57; Richard
E. Dawson and James A. Robinson, "Interparty Competition, Economic Variables, and
Welfare Politics in the American States," Journal of Politics, 25 (May 1963), 265-89;
Thomas R. Dye, "Malapportionment and Public Policy in the States," Journal of Politics,
27 (August 1965), 586-601; and Richard I. Hofferbert, "The Relation between Public
Policy and Some Structural and Environmental Variables in the American States," APSR,
60 (March 1966), 73-82.
2
See note 1, supra.
3
See note 1, supra.
955

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956
There are several reasons to expect that states within a region will portray simi-
lar patterns of government expenditures. Neighboring states may share historical ex-
periences, political characteristics or economic conditions that are critical with re-
spect to government expenditures. Also, state official may model their activities
after those of neighbors. Because they meet each other through regional associations,
because they feel that each others’ problems are similar, or because they feel a sense of
interstate competition, officials may attempt to adjust their own programs and levels
of spending and taxation to what they perceive to be the regional norms. This study
will not attempt to define the contribution that official’ attitudes and perceptions
make to regional patterns of state spending. Rather, it will examine regional patterns
of spending, and a number of political and economic conditions that seem capable
of bringing about regional peculiarities in expenditures.
There are many designations of government expenditures and the regional
groupings of American states. Before proceeding with the analysis, it will be neces-
sary to define the measures of state expenditures and the regional groupings of states
that will be considered, and to identify the political and economic characteristics that
may show critical relationships with state spending.
CONCEPTS AND TECHNIQUES
This study uses two measures of state expenditures: general expenditures per
capita, and general expenditures per $1,000 of personal income. &dquo;General expendi-
tures&dquo; include all spending except for state liquor stores and insurance trust funds.4
Although the states that score high in expenditures per capita also tend to score high
in expenditures per $1,000 of personal income (Pearson’s r-.67 for 1962), there is
enough difference between the two measures to warrant their separate consideration.
Expenditure per capita is a measure of money spent in relation to the population
being served by state programs. As such, it indicates how much each state is devot-
ing to improving or maintaining the quantity or quality of its public services.5 Ex-
penditure per $1,000 of personal income is a measure of spending in relation to eco-
nomic resources. States that make high expenditures per $1,000 of personal income
appear to be showing a greater commitment of their resources to state affairs, and -
assuming a universal reluctance of people to pay taxes -
they appear to be making
greater economic and political efforts in supporting the activities of state govern-
ment.6 The following analysis will deal with expenditures in total, and expenditures
4
U.S. Bureau of the Census, Compendium of State Government Finances in 1962 (Washing-
ton, D.C., 1963), p. 60.
5
It is not possible to claim that expenditure per capita measures the quality or quantity of state-
supported public services. The quality or quantity of state-supported public services seems
to result from a variety of factors not simply reflected in current expenditures per capita.
Among these factors are amounts previously spent in accumulating capital facilities, finan-
cial contributions from local, federal or private sources that supplement state-supported
programs, the nature of economies derived from operations of certain magnitude, and the
training and motivations of state officials.
6
Personal income is used as the indicator of wealth because it (or "income payments to individ-
uals") is available for the entire period (1929-62) included within this study. Because
personal income is not the principal tax base of most American states, this dependent vari-
able is only an approximate index, rather than a perfect measure of states’...