Revenues & Expenditures: 10. How Did Vermont’s Expenditures Compare To Other States in 2018?

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Does the state government of Vermont spend too much money, not enough or just the right amount?  Is all this money being spent on the right things?

These are, of course, quite difficult questions to answer. Differing political views aside, what benchmarks are available to measure the efficacy of Vermont’s spending decisions?

One useful benchmark is to compare Vermont to the other states in the country, all of which pretty much spend their taxpayers’ money on the same set of government services.

Comparing Vermont to Alabama or Oklahoma is probably not going to be a particularly useful exercise.  However, a comparison to the USA as a whole, New England as a whole and the neighboring state of New Hampshire is more useful and informative.  It won’t answer the questions posed above, but it might help identify areas where there is cause for further evaluation.

In any comparison exercise, it’s important to compare apple to apples.  In the case of Vermont, K-12 education is an orange that needs to be treated separately.  Vermont fully centralizes K-12 education spending at the state government level and the vast majority of other states rely heavily on local taxes to fund education.  To paint as accurate a picture as possible, this article will treat K-12 education spending separately,

State Spending Excluding K-12 Education

Each year, the National Association of State Budget Officers publishes the State Expenditure Report, which compares the spending of all 50 states.  The data in this annual report is derived from state budgets and provided directly by the states.  This article has converted this spending information to per capita amounts using Census Bureau 2018 population estimates.

Fiscal Year 2018 Comparative State Government Per Capita Expenditures ($/person)

Category Vermont New Hampshire New England USA Vt. vs. New England Vt. vs. USA
Total Expenditures Excluding K-12 Education 6,081.1 3,599.1 6,918.3 4,993.0 (12.1%) +21.8%
Medicaid 2,577.9 1,605.7 2,293.1 1,843.6 +12.4% +39.8%
Transport 910.1 411.4 690.2 495.5 +31.9% +83.7%
Capital Expenditures 563.1 312.6 620.8 331.1 (9.3%) +70.1%
Corrections 249.1 98.8 191.5 191.1 +30.1% +30.4%
Public Assistance 146.9 67.8 109.7 78.3 +33.9% +87.6%
Higher Education 161.3 102.5 412.6 625.4 (60.9%) (74.2%)
All Other 2056.5 1313.0 3221.2 1,759.1 (36.2%) 16.9%

Source: National Association of State Budget Officers State Expenditure Report 2016-2018.  The 2018 population estimates are from the US Census Bureau.

Vermont’s state government per capita expenditures (excluding K-12 education) were 12.1% below the average of all New England states in 2018.  Massachusetts, Rhode Island and Connecticut all had higher expenditures while both Maine and New Hampshire were materially lower.  The highest was Connecticut at $8,009 and the lowest New Hampshire at $3,599.

With the exception of New Hampshire, all the New England states had expenditures exceeding the national average.  As indicated in the table above, Vermont’s total per capita expenditures (excluding K-12 education) were 21.8% higher than the national average in 2018.

In several categories, Vermont exceeds both New England and the US averages.  In Medicaid, Vermont’s per capital expenditures are almost 40% higher than the national average and 12 % above New England. Vermont’s Public Assistance spending is also very high, exceeding the national average by 87.6% and New England by 33.9%. Transportation and Corrections expenditure were also very high on a comparative basis.

Vermont also ranks at the low end of expenditures in a few areas. Higher Education spending by the state of Vermont is very low, trailing New England by 60.9% and the USA average by 74.2%.  Capital expenditures in 2018 for infrastructure, such as highways, bridges, machinery and equipment, were also comparatively low in Vermont compared to the average for New England.

K-12 Education Expenditures

The US Census Bureau tracks K -12 education spending on a comparative basis for all 50 states.  Their data includes all sources of funding, including local, state and federal government sources.  The most recent Census Bureau Education Spending Survey published in 2018 covers actual education expenditures for fiscal year 2016.

K-12 education spending for Vermont, the other New England States and the USA as a whole are outlined below.

Total Per Pupil Spending Fiscal Year 2016 ($)

Region Spending Per Student ($)
USA $11,762
Maine $13,278
New Hampshire $15,340
Rhode Island $15,532
Massachusetts $15,593
Vermont $17,873
Connecticut $18,958

Source: US Census Bureau Survey of Education Spending

As clearly outlined above, Vermont’s K-12 education expenditures are very high. First, they exceed the national average by a whopping 52%.  In New England, only Connecticut has higher education expenditures than Vermont. Massachusetts, the third most costly state, has per pupil costs 15% below Vermont’s.

Summary

Vermont is a high cost state.  In the two areas that account for some 65% of Vermont’s total state government spending, K-12 education and Medicaid, Vermont’s expenditures are materially in excess of both the national average and most of its neighboring New England states.

The Informed Vermonter will provide more detailed updates on both Medicaid spending and education costs in Vermont in separate articles. These are really the two most important drivers of Vermont government spending and resulting taxation and they deserve a lot of attention.

 

Related Articles

  1. How Do Vermont’s Expenditures Compare To Other States? https://theinformedvermonter.com/485-2-comparative-expenditures/

 

 

 

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