December 12, 2010

Growth in Real Per Capita Spending, All States: 1987 - 2009

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This graph by Mercatus Research Fellow Matthew Mitchell shows the growth in different components of aggregate state spending since 1987. All numbers are adjusted for inflation and population growth. Medicaid is by far the fastest-growing component in state budgets. On an inflation-adjusted per capita basis, state spending on the program increased 240% over this period. At the same time, spending on other cash assistance actually declined on an inflation-adjusted per capita basis. These figures use the general price level to adjust for inflation. Medical price inflation, however, has been greater than overall inflation. Even when using medical price inflation to adjust the Medicaid figure, spending on the program increased 123% over this period. For further details, see Mitchell’s paper, State Spending Restraint: An Analysis of the Path Not Taken.