U.S. State Spending Exceeds $2 Trillion in Fiscal 2018

U.S. state spending topped $2 trillion for the first time in fiscal 2018, with Medicaid expenditures rising the most along with a significant increase in transportation spending, according to a report released on Thursday.

Total expenditures grew an estimated 4.8 percent compared to 3.8 percent in fiscal 2017, the National Association of State Budget Officers’ (NASBO) annual state expenditure report said. The annual report focuses on the seven top state spending categories, which are elementary and secondary education, higher education, public assistance, Medicaid, corrections, transportation and “all other.”

Each category saw some growth in fiscal 2018, with public assistance rising the least at 0.7 percent and Medicaid, the state and federal healthcare program for the poor, growing the most at 7.3 percent.

Growth in state spending of federal funds outpaced spending of state-generated revenue, including from general funds, the report found.

Medicaid continued to account for the bulk of federal dollars flowing to states. The program made up 29.7 percent of total state expenditures in fiscal 2018, compared to 20.5 percent a decade earlier.

Elementary and secondary education expenditures, which rose 4.6 percent, remained the largest area of state general fund spending.

The report also highlighted a 6.5 percent increase in transportation spending, which represents 8 percent of total state expenditures. The rise indicates a growing focus on infrastructure.