Explaining Variation in the Level of State and Local Government Expenditures on Health and Public Assistance

Abstract

Shrinking state revenues and growing demand for services has forced state and local governments to make tough choices about who gets what and how much. Perhaps the toughest decisions are made in the area of "redistributive policy," which attempts to improve the lives of those who have the least by transferring wealth from those who have the most. Programs such as Medicaid and Temporary Assistance to Needy Families exemplify redistributive policy. What factors influence the levels of funding for such programs? Political culture? A willingness to tax citizens' income? Party control of a state's legislature? Or perhaps the fiscal help received from Washington, D.C.? This research examines the factors that influence state expenditures on public health and assistance programs and employs regression models to test the significance of those factors. The results show that above all, spending levels in the previous year determine spending levels in the current year. This has important implications for those who believe that "partisan politics" drives overall health and public assistance expenditure levels.