Better Information, Better Policy

State Spending and Services

April 28th, 2009

This section describes how the state spends its money. This picture looks considerably different depending on whether we look at appropriations--the spending authorized each year--or total spending from appropriations, federal funds, and revolving funds.


This graph shows how state appropriations are divided among the major functions of government. The major functions supported by state appropriations--from largest to smallest--are listed below.

  • Education: Just over half of all appropriations, $3.6 billion in FY ‘11, are allocated to education services, including funding for local K-12 education, the state higher education system, vocational-technical education, and other cultural and educational activities.
  • Health and social services functions are the second largest use of appropriations; at $2.0 billion in FY '11, they receive just over one-fourth of appropriations. The health and social service agencies help fund basic health and security for those who cannot fully do so on their own. Much of this funding is used to match federal grants for health insurance and for basic welfare programs.
  • Public safety received $720 million in FY '11 appropriations. Funds are appropriated to operate the state's prison system and law enforcement agencies that patrol highways, reduce illegal drug use, and investigate and prosecute crimes.
  • General Government and Transportation: Appropriations to general government agencies--those that support and regulate the operations of all other agencies--and the Department of Transportation total $267 million in FY ‘11.
  • Natural resources and regulatory agencies received about $134 million in FY '11 for a variety of purposes.
  • The "Other" FY '11 appropriation is $12 million for the Rural Economic Enhancement Program (REAP) to finance community development in rural areas and small towns.


The division of funds looks different when we examine all state spending, not just appropriations. Please note that while the previous discussion was on planned spending for FY '11, the total expenditure data are for actual spending three years earlier, in FY 2008. This is necessary since these are the most recent data available from our source, the U.S. Bureau of the Census.

Health and social services, at $5.6 billion in 2008, makes up over one third of all state spending. In addition to the substantial appropriations, health and social service agencies spend more federal funds than any other agency type. The $3.0 billion spent on Education makes it the second largest function in terms of overall state spending.

After health and social services and education, insurance trusts are the third largest function measured by total spending. The $1.7 billion spent by these agencies in 2008 represents 12 percent of all state spending. These agencies receive no appropriations; their spending is supported by federal funds and contributions by those who benefit from the insurance and retirement programs these agencies operate.

All other services use one-fourth of total state spending, or $4.0 billion in 2008. In addition to appropriations, major funding for these functions - transportation, public safety, environment and housing, utilities and others - comes from federal highway funds and fees from users.

You can click on the links below for more information on each of the state's major service areas. Each service area section includes an overview of the goals we seek to accomplish, an overview of what we have accomplished and how well we are maintain the public structures involved, and a description of the major appropriated and non-appropriated agencies that performs these services.