March 2, 2014

Federal Funds Reliance Compared to Poverty

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PovertyRate

Oklahoma’s dependence on federal funds may be attributable in part to its higher-than-average poverty rate, according to a new analysis by State Treasurer Ken Miller’s office.

PovertyRate

Revisiting a subject that raised eyebrows at the Capitol a month ago, Miller’s analysis says socioeconomic factors may help explain why state government depends on Washington, D.C., to finance more than a third of its direct spending.

Last month, Miller released an analysis indicating that about 43 cents of every dollar administered by state government came from the feds, the 7th highest rate in the nation. It was based on figures obtained from the Council of State Governments.

On Friday, he released a second analysis based on a different set of statistics generated by the Census Bureau. It indicated about 36 cents of every dollar spent by the state comes from federal coffers, the 15th highest rate nationally.

It was accompanied by charts showing that Oklahoma’s poverty rate is the nation’s 16th highest, and its rate of educational attainment 40th among the 50 states.

EducationalAttainment

Noting that other statistical measures produce even different state rankings, Miller says federal funding levels “may have less to do with a state’s discretionary policymaking and more to do with socioeconomic factors.”

Miller’s analysis also shows that states controlled by Republican legislatures tend to have higher poverty rates, lower education attainment and a greater dependence on federal funds than those controlled by Democrats.

But the treasurer cautions against reading too much into the numbers, citing “the importance of not committing a fallacy of composition, in which a conclusion is drawn about the whole based on an observation of a subset.”

  • I was surprised to learn that a major factor in the State Legislative behavior is influenced by a vote of the people decades back establishing a 75% super-majority required to raise taxes, and the Governor’s approval. Apparently this is the same case in Arkansas. What states have similar legislation and with what implications. How do these states differ statistically from the rest?

  • Julia

    Of course, the lower educational levels and higher poverty levels help explain why Oklahomans continue to vote against their own best economic interests. Vulnerable and poorly educated people are so much easier to manipulate.
    There is, in my view, a very sinister game going on right now with Republicans in complete control of the state. On one hand they have convinced their voters that they are right to continue to cut services, including education, when revenues are not up to a predetermined level, while on the other they are handing off funds and giving away future taxes to their chosen set of groups, assuring that the necessary funds will not be there for public needs.
    With local media seemingly paying no attention to the self-inflicted funding shortages, the future looks bleak – unless, of course, you are in the top 5% or so of the population.