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What Drives State Spending

Major Elements to Consider | Per Capita Spending | Major Categories of State Spending | Unmet needs and Deferred Maintenance | Summing Up and Looking Ahead

 

Per Capita Spending

Chart 6: Real Per Capita Spending FY1979 - FY2002 (Capital, Debt Service and Loans and Operating)
Chart 7: Real Per Capita Spending FY1979 - FY2002 (Capital, Debt Service and Loans; Operating; Permanent Fund Dividends)

In today's dollars, per capita state general fund spending for state services is $921 less than in FY 79 when the oil era began. Combined operating and capital general fund spending is $1,186 less. (Chart 6)

But when Permanent Fund dividends are added to general fund spending, the total is $534 more per capita than FY 79. (Chart 7)

Why does the state spend more per capita in Alaska?

State by state comparisons often portray Alaska as spending more per person than other states. Obvious reasons: harsh climate, scattered communities, few economies of scale, high transportation costs and cost of living.

Other reasons may not be so obvious:

  • Our state government provides services that are provided by counties or local governments in other states (police, prosecution, courts, jails, social services, etc.)
  • Alaska pays a larger share of "local" costs such as education than do other states
  • Vast resource management responsibilities -- troopers enforcing fish and game laws cover 6 times as much area per officer as Wyoming; fewer oil safety inspectors than Indiana with 160 times the annual production.
  • Short time span since statehood for developing infrastructure including bringing rural villages up from third world to first world sanitation and health standards
  • Alaska has programs that other states don't -- Permanent Fund dividends, Longevity Bonus, Pioneer Home, Power Cost Equalization, etc.

 

Major Categories of State Spending -->

 

 


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