California First In Revenue, Spending In 1998

The nation's most populous state, California, collected more revenue than any other state and also outspent the other 49 states in 1998, the latest year for which data is available, according to a report released Wednesday by the U.S. Commerce Department's Census Bureau.

New York claimed second place with  $96.1 billion in revenue and $87.3 billion in spending. Texas was third, with revenue of $57.8 billion and expenditures of $51.1 billion in 1998.

After enduring financial doldrums in the early 1990s brought on by real estate problems and a downturn in defense-related work, the Golden State collected $145 billion in 1998 and spent $120 billion, the Census Bureau reported.
New York claimed second place with $96.1 billion in revenue and $87.3 billion in spending. Texas was third, with revenue of $57.8 billion and expenditures of $51.1 billion in 1998.

State finance expert John Petersen marveled at the manner in which California reversed its financial fortunes in a relatively short period of time.

"They're really Phoenix-like to have come back from being in pretty tough shape," says Petersen. " They've got a progressive income tax out there, meaning that when things are good, they're very good. It's like the little girl with the curl."

Petersen, with the Government Finance Group, an Arlington, Va.-based organization that does fiscal consulting and research for state and local governments, wasn't surprised that the state with the second largest population, Texas, generated less revenue than New York.

"Even though New York has a smaller population, Texas doesn't even have an income tax," Petersen said. "New York has Wall Street and the financial services industry, which is a big factor. They've done real well."

Nationwide, the 50 states pulled in $1.1 trillion in revenue in 1998, and spent $930 billion. Education accounted for $295 billion, or 32 percent, of those expenditures, according to the Census Bureau. Public welfare was responsible for $208 billion, or 22 percent, of state spending

Among other findings released by the Census Bureau:

Alaska had the highest revenue per capita, $14,722, followed by Delaware, $6,178, and Hawaii, $5,667.

Texas' revenue per capita was lowest at $2,926. Next came Tennessee, $3,071, and Indiana, $3,137.

Texas spent the least per capita, $2,584, followed by Florida, $2,629 and Tennessee, $2,721.

To compile its findings, the Census Bureau used data derived from state government agencies. A brief report on 1998 state revenue and spending can be found at http://www.census.gov/Press-Release/www/2000/cb00-69.html