Federal Share of State Spending

State officials have become addicted to federal subsidies because they allow them to spend money taken from taxpayers across the country instead of having to ask their voters to pony up the funds. As the following charts shows, total state spending continued to increase during the economic downturn because the federal government picked up the slack. Note that the federal share of total state spending went from 25.7 percent in 2001 to 34.1 percent in 2011.

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State Budget Problems

Think states have made deep spending cuts? You ain't seen nothing yet.

States have been struggling with huge budget gaps since 2008, but this year could be worse as federal stimulus funds wind down.

Until now, stimulus money spared governors and state lawmakers from making some of the most brutal budget cuts. But with this lifeline running out, officials are looking at making significant cutbacks to public services, particularly schools and health programs.

"The stimulus funds have staved off what could have been even deeper cuts," said Todd Haggerty, policy associate at the National Conference of State Legislatures. "You're seeing states now are coming to that point where they will have to make additional cuts or find new sources of revenue for fiscal 2011 and that will continue in fiscal 2012."

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