Wednesday, April 15, 2009

Big Government in Metro Dayton: Federal Spending

We've looked at big government as measured by employment, now let's look at it by spending.

State government spending in the region is not readily available. Federal government spending is, via the Consolidated Federal Funds Report, provided by the census. Using this tool one can derive Federal expenditures, obligations, and loans by county, going back into the 1990s. The most recent data is for 2007.

Adding up the numbers for Darke, Greene, Miami, Montgomery, and Preble counties gives the total federal expenditures for the Dayton metro area. And we will only investigate expenditures as Federal loans, in theory, will be paid back.

As the song goes, "everything counts in large amounts", and the amounts are quite large for federal spending. For the Dayton metro area for 2006 the number is:


Why 2006? Because this permit a rough comparison for the private sector economy. 2006 is the most recent year for the County Business Patterns data, which provides an aggregate annual payroll by county, including small business and sole proprietorships as well as larger firms. I also add in the net annual income for farm proprietors and annual wages of farmworkers to pull in the ag sector. For the Dayton metro area for 2006 the private sector payroll is:


Showing this graphically, one can get a feeling of the magnitude of federal spending here:

Though this is just a gee-whiz comparison there could be some real influence of one number on another as those federal moneys eventually flow into the local economy in various ways, from food stamp dollars to social security pensions to defense contracts to medical care for the elderly and poor.

If one knew how much money was paid in Federal taxes by county one could figure out the net transfer of funds into the metropolitan area via Federal spending. One suspects that there would, indeed, by a net transfer in.

Defense & Non Defense Spending

The Funds Report website does provide a breakout of expenditures by defense & non-defense related programs:

...about a third of Federal spending in this area is defense-related.

But people are usually OK with defense spending (which is a government role specifically stated in the Constitution). It is the other, non-defense spending that they have issues with when they are concerned about runaway spending and big government.

This is the breakout for the non-defense spending:

As one can see Social Security and Medicare are over half of all spending in the metro area. The "other" category is sort of a catch-all of programs with no one program or expenditure really dominating (perhaps pensions and non-defense payroll are the large slices here).

And welfare is around 15%. We'll look at that next.


Welfare is what used to really bother folks. There was that visual shorthand or maybe urban legend of the "welfare queen driving a Cadillac" that helped mobilize opposition to the concept.

For my purposes I take a broad definition of welfare to collect various large programs that provide what I call subsistence assistance. This is spending to support food, shelter, and medical care. Plus TANF, which is what used to be called welfare, as a specific program.

Whats' remarkable is the very large portion going to the "Medical Assistance Program", which I guess is what's called Medicaid. Medical things take a big bite here, as it does to the rest of us.

Re-Slicing the Pie

Revisiting local federal spending and adding defense back in. This chart groups the big medical programs together as one category, which is about 20% of the spending. "Welfare" is a low 3% of all local federal spending (though some of the "other" category does have welfare-esque characteristics).
Defense spending and Social Security make up the largest share, though, over 50% of all expenditures in the Dayton metropolitan area.

Next, a comparison between Dayton and the two other second-tier Ohio metro areas, Toledo and Akron, and a brief look at "runaway spending" in one non-defense Federal program.

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