Uncle Sam in the South: Federal Outlays to Southern States

UNCLE SAM IN THE SOUTH: FEDERAL OUTLAYS TO SOUTHERN STATES Clyde E. Browning' This paper is an introductory discussion of state differences in Federal spending in the South. Its purpose is twofold: to make more widely available a portion of the information on Federal outlays (the reports for each state were never published and are available only on micro cards at a few universities ) ; and in highlighting differences in per capita Federal outlays among the Southern states to explore the relationship between the level of Federal outlays and other variables, e.g., changes in income and population. The period since World War II has been marked by an increasing influence of the Federal budget upon the national economy. From 1948 to 1967, Federal revenues rose from 47.3 billion to 161.4 billion dollars. Even when allowance is made for inflation and the inclusion of 30.5 billion dollars in the 1967 total for insurance trust funds (mainly Social Security), the 20-year increase has been dramatic. When set within the perspective of the gross national product, the Federal budget's share rose from 13.5 percent in 1948 to 20.7 percent in 1967. Data on Federal aid to state and local governments have been available for some time, but the bulk of Federal expenditures is still to be accounted for since only a fraction of the total budget goes to the Federal aid program. (1 ) The largest single item in the national budget, defense spending, does not enter into the Federal aid picture nor do the many Federal operations which are virtually everywhere, e.g., the Post Office and the Weather Bureau stations. Now, however, for the first time we can take a closer look at the manifold Federal Government activities as they are felt in states and local areas. (2) This is possible as a result of a recent study prepared at the request of the Executive Office of the President by the Office of Economic Opportunity entitled, "Federal Outlays: A Report of the Federal Government's Impact by State and County, Fiscal Year 1968." The OEO study lists the expenditures for each of 980 Federal programs, activities, or appropriation items at the national, state, county, and city levels. When one remembers there are over 3,000 counties and hundreds of cities, the herculean nature of the job becomes apparent. Without computers , the task might never have been contemplated, let alone completed. Two volumes were issued for each state: one for the state as a whole and each county, and the other for cities over 25,000 population. The introduction to the volumes stresses precautions on the use of the data. In some cases the accounting systems of agencies do not provide data by geographic *Dr. Browning is associate professor of geography at the University of North Carolina at Chapel Hill. The paper was accepted for publication in February 1971. Vol. XI, No. 1, 197163 location; therefore, approximations or statistical derivations were made. In other instances reporting is incomplete because of security reasons; trust funds and regular appropriation funds are reported without distinction, and insured or guaranteed loan programs are listed at the face value of loans rather than reflecting the cost of the programs' operations. For all of these reasons and more, the advice, "therefore, the reader should exercise care in the interpretation, quotation, or summary of individual figures," is well taken. Ideally, it would be desirable to properly sort out the individual budget items, e.g., separating the grants from the loans or the trust funds. This would not only be very time consuming, but the necessary details to make the judgments are lacking since the report is essentially a listing of budget items without explanation. Even in its imperfect form, however, this information on the distribution of Federal outlays is so new, informative, and important that it deserves wider circulation. TOTAL FEDERAL OUTLAYS. The amount of Federal outlays to individual states can reach surprisingly high totals (Table 1 ). In the case of North Carolina , the Federal outlay of $3,368,740,733 in 1968 was more than double the revenue raised by the State and local governments combined ($1.4 billion ) for the same...