Sources of Data about State Government Revenues and Expenditures

Brief

Sources of Data about State Government Revenues and Expenditures

July 15, 2000

Abstract

The diversity of state programs makes comparison of fiscal activities across states and over time difficult. This paper compares ongoing surveys that provide data about state revenues and expenditures from the Census Bureau, National Association of State Budget Officers, National Conference of State Legislatures, and the Nelson Rockefeller Institute of Government. The strengths and weaknesses of each source are discussed and differences in the estimates of recent state budget growth by each source are analyzed.

Assessing the New Federalism is a multiyear Urban Institute project designed to analyze the devolution of responsibility for social programs from the federal government to the states, focusing primarily on health care, income security, employment and training programs, and social services. Alan Weil is the project director. Researchers monitor program changes and fiscal developments. In collaboration with Child Trends, the project studies changes in family well-being. The project aims to provide timely, nonpartisan information to inform public debate and to help state and local decisionmakers carry out their new responsibilities more effectively.

Key components of the project include a household survey, studies of policies in 13 states, and a database with information on all states and the District of Columbia, available at the Urban Institute's Web site: http://www.urban.org. This paper is one in a series of discussion papers analyzing information from these and other sources.

The project has received funding from the Annie E. Casey Foundation, the W.K. Kellogg Foundation, the Robert Wood Johnson Foundation, the Henry J. Kaiser Family Foundation, the Ford Foundation, the John D. and Catherine T. MacArthur Foundation, the Charles Stewart Mott Foundation, the David and Lucile Packard Foundation, the McKnight Foundation, the Commonwealth Fund, the Stuart Foundation, the Weingart Foundation, the Fund for New Jersey, the Lynde and Harry Bradley Foundation, the Joyce Foundation, and the Rockerfeller Foundation.


Table of Contents

  • I. OVERVIEW
  • II. SURVEY OF AVAILABLE DATA SOURCES
        CENSUS
        NCSL AND NASBO
        CENTER FOR THE STUDY OF THE STATES
        CCH INCORPORATED
  • III. RELATIONSHIP BETWEEN NASBO AND CENSUS ESTIMATES OF STATE GOVERNMENT SPENDING
  • IV. RELATIONSHIP BETWEEN NIPA AND CENSUS ESTIMATES OF STATE AND LOCAL GOVERNMENT RECEIPTS AND EXPENDITURES

Cost-effective monitoring of state government activities requires the use of existing sources of data. The process of assembling data to make comparisons across states and track changes over time can be time-consuming and expensive. Until recently, the U.S. Advisory Commission on Intergovernmental Relations (ACIR) did much of the necessary work by publishing compilations of information about the states.1 The unfortunate demise of the ACIR in 1995 increased the data-gathering burden on those interested in conducting cross-state comparisons of government activities. This paper is intended as an aid in making such comparisons.

This paper is divided into four sections. Section one provides a general overview that discusses difficulties associated with compilation of comparable cross-state over-time data about state governments' finances. Section two surveys available data sources and discusses their strengths and weaknesses. Section three provides a direct quantitative comparison of two of the most widely used sources of state-by-state data on revenues and expenditures. Section four discusses the relationship between national income and product account (NIPA) estimates of the size of the state and local government sectors and Census estimates of the size of the state government sector.

I. OVERVIEW

One of the virtues of a federalist system of government is that each state is able to tailor its programs to the needs and circumstances of its citizens. In the United States, each state government has its own unique organization and structure for administering its programs. In some states, a single agency may administer virtually all programs for low-income individuals while in others this responsibility is shared broadly among many components of government.2 While this diversity has the virtue of allowing states to experiment with many different approaches, it also makes it extremely difficult to collect the comparable data that are necessary to monitor states' behavior.

The primary use of states' revenue and expenditure data is to prepare and monitor the budgets of administrative agencies and programs. Tax revenue data generally are assembled by the state Department of Revenue, while data about intergovernmental grants, user charges, and other revenues come from a wide variety of sources. Expenditure data are generally tracked and reported by the state agency or department that administers the program. States find it easiest to report data on the basis of the programmatic categories listed in their budgets.

Cross-state data collection is inherently difficult and requires judgment on the part of the data collectors. State agencies, departments, and programs are not uniform across states. Thus, a national data collection effort must make judgments about the categories in which data are reported. For example, New Hampshire has no tax on labor income but has a 5 percent tax on interest and dividend income. Most other states tax interest and dividend income as part of a personal income tax. Should New Hampshire's revenue from this tax be reported as income tax revenue or as a separate tax? If it is reported as a separate tax, should the data collectors also attempt to break out tax revenue attributable to interest and dividend income for states that have a more typical income tax?

Data collection for expenditures is even more difficult. Each state designates its own unique constellation of departments and agencies to deliver particular services. For example, responsibility for low-income assistance typically is spread among several agencies (e.g., Children and Family Services, Health, Labor, and Revenue departments) but the specific programs and division of responsibilities differ greatly across states. Similarly, state highway responsibilities may partly fall under the purview of the state police agency in one state but be solely the responsibility of the Transportation department in another. When comparing low-income assistance data across states, it is important to know whether the data were compiled on a programmatic basis (i.e., on the basis of the primary program area of the spending agency) or a functional basis (on the basis of the purposes for which spending was designated).

Cross-state collection of governmental data requires careful design so that differences across states and over time can be meaningfully measured. To be most useful, data should be available at several points in time across a broad range of (if not all) states and data collection procedures should be well documented.

Notes

1. The ACIR series Significant Features of Fiscal Federalism was particularly useful for the purposes discussed here. Many ACIR publications can be accessed at http://www.library.unt.edu/gpo/acir/acir.html.

2. Concrete examples of the huge variety of approaches states use to administer economic assistance to low-income households can be seen in the Urban Institute's series of detailed reports on income support and social services for low-income people in 13 selected states. The reports, published in 1998 and 1999, are entitled Income Support and Social Services for Low-Income People in [State Name]. A parallel series of reports was done on the states' administration of health programs for the low-income population. These reports are entitled Health Policy for Low-Income People in [State Name].

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