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  • State Budget

    Politicians are always running for office.

    It's not an original observation, but it is an important one. In order to have the power to make a difference, politicians constantly need favor from the public, interest groups, corporations and donors. To curry support, every lawmaker talks about their championed causes and their preferred policy agenda, and while these often are sincere promises and goals, talk does not always translate into action. To get a sense of Michigan's policy priorities, then, a different measuring stick is needed.

    . One of the best ways to get a substantive look at what programs a state - and thereby its lawmakers, its interest groups and the rest of its political players - focuses on is to look at where it spends its money. Every state has a finite budget, and how lawmakers divide this pot between the multitudes of government programs gives a good sense of its policy priorities.

    William G. Jacoby and Saundra K. Schneider championed a new way to examine state spending priorities in their 2008 paper, "A New Measure of Policy Spending Priorities in the American States." They divided common areas of spending into two categories - particularized benefits and collective goods - and then compared what portion of its budget each state spends in one area versus the other. Particularized benefits include issues like health care, hospitals and welfare, while collective goods include services such as law enforcement, parks and natural resources, government administration, highways, corrections and education.

    The study compared the relative amount states spent on each area, and not the total dollars spent, thereby eliminating the vast differences in budget size between the states.

    From 1982-2005, Michigan was among the 10 states that spent the most on particularized benefits compared to collective goods, Jacoby and Schneider found. Other "top 10" states for particularized benefits included New York, California and Massachusetts. These states generally can be classified as the country's most progressive, interested in taking an active role and putting a lot of money into solving social problems. Health care, hospitals and welfare all are state services focused on the neediest members of society, rather than on the general population.

    The states that spent proportionally the most on collective goods included Wyoming, Nevada, Alaska, Idaho and Utah. These states typically are much more moderate or cautious in spending, with a record of less government involvement in social issues and more focus on basic government services that benefit everyone, like maintaining infrastructure and dealing with crime.

    Studying such a long period of time removes the variability of year-to-year fluctuations and reveals Michigan's core spending priorities as a state during the past three decades. Of course, during this time, it had some movement along the spectrum of spending as events and financial considerations dictated. Overall, however, Michigan and most other states did not slide on their priorities much. The only states that did change their priorities significantly over time were Arizona, Tennessee, New Hampshire and New Mexico.

    Looking at state spending seems much more indicative of priorities than the traditional divide between Republican and Democrat the public generally believes dictates priorities. Even when the parties played tug of war with Michigan's Legislature and Executive Office, the state remained on a relatively constant spending trend.

    At least part of this stability likely stems from pressures outside the lawmaking realm. Although the Legislature and governor - the people with direct say over the budget - turn from Republican to Democrat and back again frequently, especially with the term limits Michigan enforces, public opinion is not so partisan. Nearly always, people demonstrate less support for the government when a question is framed in general terms, but when it is rephrased to discuss a specific program or issue, support for government shoots up. This finding holds true for government spending as well as other issues like taxes and social welfare, according Schneider and Jacoby's article "Public Attitudes toward the Policy Responsibilities of National and State Governments: Evidence from South Carolina." Thus, people tend to be comfortable with the programs already in place, and when radical reforms are discussed, public opinion turns against change in favor of stability.

    Aside from public opinion, however, one of the biggest influences on policy in a state is the presence of particular interest groups. Jacoby and Schneider conducted research on this front as well, showing that states spend more on particularized benefits when they have a smaller number of interest groups relative to the size of the economy, as well as when these groups have a narrow policy focus. Interest groups generally push for particularized benefits for their members, and generally succeed in gaining more influence than does public opinion, according to the pair's article, "Variability in State Policy Priorities: An Empirical Analysis." This interest group phenomena could help explain Michigan's lean toward particularized benefits.

    Of course, Michigan has seen some spending priority changes during the past several decades. The state underwent one of its worst economic crises in history, and the rest of the country followed. But despite the recession, across all states, education funding stayed relatively constant from the early 1990s. Medicaid and corrections have attracted more dollars during the past several years, while spending on transportation and cash assistance to low-income families has declined, according to The Center on Budget and Policy Priorities. http://www.cbpp.org/cms/index.cfm?fa=view&id=2783

    The center also found that in FY 2008-09, on average, about a quarter of state funding went to K-12. This number varied dramatically among the states - Alaska spends only 10 percent of its budget on K-12, while Texas spends 31 percent. Michigan fell closer to the average, spending 28.1 percent, or $12.8 billion, of its FY 2009-10 budget on K-12 education.

    Across all states, spending on education became the dominant category prior to 1945, but from the post-war period through 1970, spending steadily grew in relation to other categories, according to research presented in "Politics in the American States," edited by Virginia Gray and Russell L. Hanson. After about 1970, education has received a relatively consistent stream of state dollars, despite recent fluctuations in Michigan. By FY 2004-05, education was the single largest spending category for 44 states.

    The Center on Budget and Policy Priorities also found that in FY 2008-09 transportation received 7 percent while corrections received 5 percent. In Michigan the next year, those numbers were 5.3 percent and 5.1 percent, respectively.

    Public welfare, including Medicaid, surpassed highways as the average state's second-largest spending category in the early 1970s, and has continued to grow in clout since, according to Gray and Hanson. In FY 2009-10, Michigan spent about $13.3 billion on Medicaid and other health services, 23.8 percent of its budget, according to the Senate Fiscal Agency.

    As caretaker of four of the five Great Lakes, conservation often is a popular topic in Michigan politics. But in a difficult budget climate, the category has seen cuts. In FY 2004-05, the average state spent 1.4 percent of its budget on natural resources, while five years later, Michigan spent 1 percent on the similar category of conservation, recreation and agriculture, according to the Senate Fiscal Agency.

    In FY 2004-05, about one-third of state government general revenues nationwide came from the federal government, according to Gray and Hanson. About one-third of general state government expenditures in the same year went to local government. Although some of these dollars were direct transits from the federal government to local units that only pass through the state level, the match in percentages is primarily coincidental.

    In Michigan, these funds have been declining rapidly during the past several years. In FY 1999-2000, local communities shared $1.47 billion from the state government. Ten years later, only a little more than $970 million was left in the budget, a cut of more than a third, according to a report by the Senate Fiscal Agency.

    Because of the many differences in how money is gained, categorized, allocated and redistributed, gaining an accurate overall picture of Michigan's spending compared to other states is remarkably difficult. However, examining the data on spending provides one of the best windows into the state's policy priorities as a whole. Based on the information presented here, Michigan's spending priorities seem close to the mean, but with a distinct lean in the direction of policies focused on the neediest strata rather than the general populace.

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    The Michigan Policy Network is a student-led public education and research program to report and organize news and information about the political process surrounding Michigan state policy issues. It is run out of the Department of Political Science at Michigan State University, with participation by students from the College of Social Science, the College of Communication, and James Madison College. 

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    Meet your Policy Fellow: Evan Martinak

    Evan Martinak is state budget policy fellow for the Michigan Policy Network. Evan is from Walled Lake, Michigan on the east side. He is a student in James Madison College, pursuing a major in international relations and also doubling it with an economics major. He intends to pursue a minor in Philosophy of Law. He is highly involved in student government at MSU. He is a member of ASMSU (The Associated Student of Michigan State University) as well as James Madison College Student Senate. He is also an avid Manchester United fan.