State Smart is updated as we get new numbers. Visit our change log for a complete list of changes and data updates.
State Smart looks at federal money flowing in and out of states over the years. There are three parts to the project, and the sources for each are detailed below.
Most of our datasets got back to 2002 so the initial State Smart publication could report 10 year trends. The exception is federal contracts data, where we went back to 2007 due to data limitations in USASpending.gov.
State Smart presents an estimate of total federal dollars that flow to each state during the course of a year. We get this estimate by summing the latest available data point for each of the following.
Although these numbers represent different time periods, we've combined them to create a current best estimate for each state. Because the federal government does not currently publish complete, state-level spending information, we feel that the benefit of providing an approximate number outweighs the liberties we took to get it.
These estimates will change as new numbers become available.
All dollar amounts in State Smart are presented as federal fiscal 2015 dollars. We do this for two reasons:
To adjust the numbers, we use GDP (Chained) Price Index as published in the annual President's Budget request. See historical table Gross Domestic Product and Deflators Used in the Historical Tables.
To provide context for the federal money data, State Smart presents demographic information about each state.
The American Community Survey (ACS) is an annual survey designed and executed by the Census Bureau. It's a treasure trove of information, and you can access the data on American FactFinder. State Smart pulls the following data from the latest available ACS 1-year estimates:
We access this information via the Census Bureau’s Application Programming Interface (API).
We use two surveys from the Bureau of Labor Statistics (BLS) to get information about each state’s unemployment and underemployment rates.
Every state government in the U.S. receives money from the federal government, as do many local governments. We get these numbers from two separate, though related, Census Bureau surveys. Each survey provides numbers by state fiscal year, which is July - June for all but four states (Alabama, Michigan, New York, and Texas). These numbers do not include federal dollars going to tribal governments, which are recognized as sovereign nations and, therefore, are not considered state or local governments by the Census Bureau.
For both state and local governments, we discuss revenue in terms of general revenue, which represents all revenues except those from state-owned liquor stores, utilities, and insurance trust funds. State Smart shows general revenue as four categories:
Our state revenue data comes from the the annual State Government Finances survey. This survey provides information about how states receive and spend money.
To crunch state revenues, we:
Our local revenue data comes from the annual State and Local Government Finances survey. This survey augments the state finances information with information about how sub-state governments receive and spend money.
To crunch the local revenues, we:
In addition to calculating the federal revenue totals for state and local governments, we also capture the detailed federal revenue-related item codes provided by the Census Bureau. These are used in the State Smart narrative and provide additional insight into how federal money in state and local budgets is being used.
The list of federal reveue categories mentioned in State Smart and their corresponding Census item codes is below. This is a subset of the complete list of Federal Intergovernmental revenue item codes. For a full description of Census classifications related to federal, state, and local governments, consult the Government Finance and Employment Classification Manual
| State Smart Category | Description | Census Item Code |
|---|---|---|
| Education | Federal aid for education-related programs such as Head Start, school nutrition and milk programs, and grants and contractual amounts received by institutions of higher education for eduction or for research and development programs. | B21 |
| Health and Hospitals | Includes federal aid for programs like the special supplemental food program (WIC) and alcohol, drug abuse, and mental health help. Also includes environmental health (e.g., EPA Superfund grants) and care of veterans in state hospitals, including facility construction. Does not include Medicaid (which is included in the Public Assistance category) or Medicare (which is included in State Smart's Aid to Individuals data). | B42 |
| Housing and Community Development | Federal aid for construction or operation of public housing, rent subsidy programs (e.g., Section 8 funds), and community development. | B50 |
| Natural Resources | Federal aid for forests and grasslands; soil, water, and energy conservation; flood prevention and drainage; fish and wildlife managemnet; and mine reclamation and safety. Includes aid for agricultural experiment stations and extension services; inspection of meat, poultry, and other agricultural products, and agricultural resarch. Does not include federal aid for parks and recreation and shared revenue from national forests, grazing lands, mineral leasing, etc. | B43,B54,B59 |
| Public Assistance | Federal aid for programs such as Temporary Assistance to Needy Families (TANF), Medicaid, care in nursing homes not associated with hospitals, food stamp administration, child welfare services, Low Income Energy Assistance (LIHEAP), socal and community services block grants, refugee assistance, work incentives, and related administration. | B79 |
| Transportation | Federal aid for construction, operation, and support of public airports (and other distributions from the Federal Airport and Airway Trust Fund); Federal aid distributed from the Federal Highway Trust or other funds for approved projects and other highway safety; Federal grants for urban mass transit. | B01,B46,B94 |
State Smart presents Washington, DC revenue numbers alongside state numbers. However, they actually come from the local portion of the State and Local Government Finances survey. That's because the Census Bureau treats Washington, DC as a local municipality for statistical purposes.
The Census Bureau applied some DC-related codes differently after a 2005 survey redesign, so we've only included DC data for 2005 forward.
Federal money that goes directly to individuals comes from the Bureau of Economic Analysis (BEA), going back to calendar year 2002. Specifically, we use table SA35, Personal Current Transfer Receipts from BEA's Annual State Personal Income and Employment series.
The BEA defines personal current transfer receipts as follows:
Income payments to persons for which no current services are performed and net insurance settlements. It is the sum of government social benefits and net current transfer receipts from business.
Personal current transfer receipts include money being paid by the U.S. federal government to individuals or on their behalf for programs like:
Table SA35 Personal Current Transfer Receipts mixes state and federal money into its Current transfer receipts of individuals from governments category. It also includes money from programs that we classify as federal grants to state governments (e.g., Medicaid and WIC) and capture elsewhere in State Smart. Thus, we take a subset of line items from the data:
Note: We exclude the Earned Income Tax Credit (EITC) refunds from our federal aid to individual number because it's included in State Smart's taxes numbers.
* Number includes a small percentage of money that originates from state governments rather than federal governments.
** Although unemployment insurance is funded largely through state-levied payroll taxes, unemployment benefits are considered federal budget outlays because state unemployment compensation revenue is deposited in the U.S. Treasury. Source: CRS Unemployment Insurance Programs and Benefits.
To crunch the numbers for State Smart, we:
The Other transfer receipts of individuals from governments category in the raw BEA data includes disbursements to Alaska residents from the Alaska Permanent Fund. Although this category represents a very small portion of overall personal current transfer receipts, we subtract the Alaska disbursements from the BEA number to ensure that state-by-state dollar amounts are as comparable as possible. We get the Alaska disbursement numbers from the state's website.
Federal Contract data comes from USASpending.gov, going back to federal fiscal year 2007. These numbers represent primary award data and don't reflect money passed along to sub-contractors.
To crunch the numbers for State Smart, we:
* Obligated funds do not always result in actual expenditures and are not always spent in the same fiscal year that they are obligated. Initial obligated amounts may be adjusted at a later date. When we update contract data, we update all previous years to ensure that we capture these adjustments.
We track federal employee numbers and compensation in each state. The states represent the location of the job, not where the worker lives (especially important to keep in mind for states surrounding Washington, DC). This information comes from two Bureau of Economic Analysis (BEA) tables, both of the Annual State Personal Income and Employment series series:
Each of these tables groups numbers by industry, and we use the following classifications in State Smart:
We pull information from Full-time and part-time wage and salary employment by industry to get the total number of full and part-time federal employees per state. This number provides the denominator when we calculate average compensation per job. Compensation represents salaries and wages plus supplements like employer contributions for pensions, health insurance, and life insurance, and government social insurance.
To crunch federal employee for State Smart, we:
We pull information from Compensation of Employees by Industry (SA06N) to get the total compensation of federal workers (full and part time) in each state. Compensation represents salaries and wages plus supplements like employer contributions for pensions, health insurance, and life insurance, and government social insurance. The BEA's website has a complete description of what's included in the federal government employee compensation number.
To crunch federal compensation numbers for State Smart, we:
We get each state's average federal compensation, we divide total federal compensation by total federal employees. We use the same formula to calculate average federal civilian compensation and average military compensation. Lastly, calculate average overall compensation in each state (total compensation / total employees) to use a metric for comparing federal jobs to other types of jobs.
The Federal Aid to Individuals portion of State Smart includes benefits paid out to federal or former federal employees. The compensation number includes contributions to these benefit programs (e.g., federal employee retirement, life insurance, and social insurance). We chose to include both numbers in State Smart because our goal is to the totality of federal money in each state during a given year.
The State Smart totals for federal dollars in the state exclude the following:
To calculate the federal taxes paid by residents and businesses in each state, we use two datasets from the annual IRS Data Book:
We calculate total taxes paid by subtracting the refund amount from gross collections. The result is net federal taxes by state, broken out as below:
| Type of Tax | Description | IRS Category |
|---|---|---|
| Individual | Taxes paid by or on behalf of an individual. Includes income taxes, self-employment taxes, taxes paid on trust income, and both employee and employer contributions to Medicare and Social Security payroll taxes. | Individual income tax witheld and FICA tax, Individual income tax payments and SECA tax, Unemployment insurance tax, Railroad retirement tax, Estate and trust income tax |
| Business | Taxes paid on business income, including taxes on corporation income and on unrelated business income from tax-exempt organizations. | Business income taxes |
| Estate | Taxes paid on property transferred at death | Estate tax |
| Gift | Taxes paid on property transferred during life | Gift tax |
| Excise | Taxes on specific goods, such as gasoline | Excise taxes |
A few notes on the IRS data:
Scattered throughout State Smart are non-budget and non-demographic facts about each state—just a few things we added for fun. The sources are as follows: