Fiscal Federalism V: Federal Other Direct Payments

Following on my two previous blogs (here and here) . . . this blog shows federal “other direct payments” spending as percent of personal income. What is this?

According to the Consolidated Federal Funds Report (pdf) from which this data is drawn from, “other direct payments” include:

  1. Medicare (more than half the total)
  2. Excess Earned Income Tax Credits (the portion that is refunded back to the individual)
  3. Unemployment Compensation
  4. Supplemental Nutrition Assistance Program
  5. Student Financial Assistance
  6. And a partridge in a pear tree . . .

The table below shows the wide range of federal “other direct payments” dependency by state. The states that are most dependent are: Kentucky (12 percent), North Dakota (9.9 percent), South Dakota (9.5 percent), Mississippi (7.6 percent) and West Virginia (7.3 percent)

On the other hand, the states that are least dependent are: Alaska (2.3 percent), Utah (3.3 percent), Colorado (3.5 percent), Nevada (3.5 percent) and New Hampshire (3.5 percent–Woo Hoo!)

Federal Other Direct Payments as a Percent of Personal Income in 2008