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Federal funds flowing to state doubled in 10 years

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Federal funds flowing to state doubled in 10 years

$64.4 million received in Arizona in past decade

WASHINGTON — Arizona residents, governments and businesses received $64.4 billion in federal money in fiscal 2010, more than double what the state received in 2001, according to new data from the Census Bureau.

That translated into federal government spending of about $10,080 per person in Arizona, just under the national average of $10,460.

The Census’ Consolidated Federal Funds Report measures all federal spending in a jurisdiction, from grants for roads and healthcare programs to salaries for federal workers, purchases by government agencies and direct payments to individuals, such as Food Stamps and unemployment benefits. The numbers are not adjusted for inflation.

The biggest increase in federal funds to Arizona over the past decade was not in salaries or welfare payments, but in federal grants to the state and to local jurisdictions, which grew from $5.4 billion in 2001 to $14.4 billion last year, a 164 percent increase.

One reason for the increase could be the sharp population increase in Arizona in the past decade, said Marcia Howard, the executive director for the nonpartisan Federal Funds Information for States in Washington. Arizona’s population rose just over 20 percent, from 5.3 million to 6.4 million people, over the decade.

“In Arizona’s case the population has been growing rapidly,” Howard said. “So, as states grow in population, so do the distribution of grants.”

But while Arizona was the 16th-most populated state in the country, it ranked 27th in federal money pumped into the state, according to the Consolidated Federal Funds Report.

Some economists worry that that may still be too much.

“It’s not good to depend on federal money,” said Byron Scholomach, chief economist for Goldwater Institute, a conservative think tank in Phoenix. “We should be concerned about how federal money is playing in the state economy.”

He noted, for example, that most of grant payments went into Arizona’s Medicaid system, the Arizona Health Care Containment System. But with the federal government constantly changing priorities for state programs, Scholomach warns that money for Medicaid will eventually be cut.

“Medicaid should radically change if it wants to stay,” he said.

Phoenix Mayor Phil Gordon, who was in Washington this week to talk with federal officials about energy projects in Arizona, said the nation has to be mindful of federal money and not depend on it so much. But he added that Arizona also pays its fair share to the federal government.

“I think we’re all going to have to rely less on federal funds, at least … in the next few years,” Gordon said.

“But I think it’s important to note that Arizona is a donor state; we contribute much more than what we receive,” he said. “So, at the very least, I believe we should be getting our fair share back.”

Federal dollars for Arizona

The Census breaks federal spending into five main categories. The amounts to Arizona, in 2001 and 2010, and the percent increase for each were:

  • Retirement: $11.1 billion; $18.5 billion; +67.3 percent
  • Direct payments: $5.7 billion; $13.7 billion; +139.9 percent
  • Grants $5.4 billion; $14.4 billion; +164.1 percent
  • Procurement: $5.3 billion; $12.8 billion; +143.5 percent
  • Wages and salaries: $2.9 billion; $5.0 billion; +70.7 percent
  • Total: $30.4 billion; $64.4 billion; +112.3 percent

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