State spending cuts during economic downturns fall more heavily on children than the elderly, according to new research by experts at Rice University. Their findings are published in the National Tax Journal and analyze implications for policymakers.
“The Most Unkindest Cut of All? State Spending on Health, Education and Welfare During Recessions” was co-authored by Richard Boylan, professor of economics, and Vivian Ho, the chair in health economics at Rice’s Baker Institute for Public Policy and director of the institute’s Center for Health and Biosciences.
“We became interested in studying the effects of economic downturns on public spending during the Great Recession of the late 2000s, when media outlets were filled with stories about states cutting optional Medicaid benefits, increasing school class sizes and reducing course offerings,” said Ho, who is also a professor of economics at Rice and a professor of medicine at Baylor College of Medicine. “More broadly, there is growing political sentiment that government spending should be slashed in order to reduce waste in the system.”
To conduct the study, the authors gathered data from the U.S. Census Bureau, the National Association of State Budget Officers, the U.S. Department of Health and Human Services, the National Governors Association, the Bureau of Economic Analysis and several other sources from 1989 to 2012.
They measured the effects of state revenue swings (positive and negative) on multiple categories of state spending. Revenue swings are year-to-year changes in state revenue (primarily tax revenue), minus legislated changes in taxes and fees.
The authors were particularly interested in education and health care, because education comprises 33.3 percent of state expenditures and Medicaid accounts for 17.2 percent.
State spending can be particularly vulnerable during recessions, because states have balanced-budget rules, which prevent them from running temporary deficits during downturns to compensate for revenue shortfalls.
The researchers’ analysis indicates that on average, states suffered a $222 per capita negative revenue swing in 2009, which in the long term led to a $64 cut in Medicaid spending per child beneficiary, a 1 percent reduction in the fraction of elderly enrolled in Medicaid and an $82 per capita cut in long-run state education spending.
“The combined cuts to Medicaid and education measured in our study suggest that spending cuts during economic downturns fall more heavily on children than the elderly,” Boylan said. “The Medicaid cuts are sobering, given that other economists have found that Medicaid coverage is effective in reducing infant and child mortality.”
In contrast, the authors found that states do not cut spending on capital, interest and transportation in response to negative revenue swings. The disproportionate cuts to education and Medicaid may be because these programs garner relatively less voter support in times of tight budgets, they said. Capital and transportation outlays are often viewed as infrastructure spending that are essential for growth. Moreover, states often specify spending amounts for capital and transportation projects that can’t be cut when tax revenues fall.
“State policymakers may not realize that the spending cuts they make in response to economic downturns are falling disproportionately on children,” Boylan said. “While they view spending on capital and transportation spending as important for economic growth, spending on education and health care for children may also be vital for a state’s long-term economic prosperity. Critics of government spending who think that expenditure cuts help to reduce waste should recognize that state spending reductions during economic downturns are cutting programs that are highly beneficial.”
To read the report, go to https://www.ntanet.org/NTJ/70/2/ntj-v70n02p329-366-state-spending-health-education-welfare.html.
4.26, noon-3 p.m.: @MethodistHosp San Jacinto Hospital Hiring Event for experienced RNs. Learn more: https://t.co/4v7r2jpdTP https://t.co/pVFG8AmsG4
MD Anderson Cancer Center@MDAndersonNews
RT @CancerFrontline: An @MDAndersonNews team developed a personalized vaccine that exposes evasive colorectal cancer to an immune attack ht…
Discover world-class career opportunities for experienced RNs at the Houston Methodist San Jacinto Hospital hiring event on 4.26 from noon-3 p.m. Bring several copies of your resume & park free in the visitor parking lot. Learn more: http://pxlme.me/1JA7A6zf
University of Houston@UHouston
RT @UHCougarMGolf: .@UHouston alum & @CBSSports broadcasting great Jim Nantz reacts to being named 2018 Ambassador of Golf CONGRATS, Jim,…
Sneezing, headaches and a stuffy nose always means you have allergies right? Wrong! https://t.co/wf8ti3TKVw
Baylor College of MedicineBaylorCollegeOfMedicine
Congratulations to Dr. Yingbin Fu on earning the Helen Juanita Reed Award for Macular Degeneration from the BrightFocus Foundation.
New Mexico Veterans set sights on Golden Age Games competition - Volunteers needed for 32nd annual event in Albuquerque https://t.co/gS2J3VC4HZ via @Sports4Vets on #VAntagePoint
Telehealth education is on the move in Colorado https://t.co/KgB6D7Xt37 via @KREX5_Fox4
It's a new day at your Manchester VA https://t.co/lDrYdgumuw via @seacoastonline
How can you make the last day of class even better? Bring some cute animals to campus! 🐰
Did you know #stroke is the fifth leading cause of death and leading cause of disability in the U.S.? Come to our Stomp Out Stroke Festival from 9 a.m.-3:30 p.m. on Sat., April 28 @DiscoveryGreen to find out how to decrease your stroke risk. Register at https://t.co/PBNoFVY455. https://t.co/sYm9Ny734p
RT @UTHealthSPA: FYI >>> NIH Funding Opportunities and Notices for April 20, 2018 https://t.co/VXvK9WVKy4 #grant #grants #research
RT @uthpsychiatry: The UTHealth Center of Excellence on Mood Disorders is conducting a new clinical research study for adults with schizoph…
U.S. Department of Veterans AffairsVeteransAffairs
Today’s #VeteranOfTheDay is Navy Veteran Tammie Jo Shults. Tammie Jo served for 10 years as a pilot and earned the rank of lieutenant commander. Tammie Jo grew up on a New Mexico ranch near Holloman Air Force Base where she developed her interest in flying. She attended MidAmerica Nazarene University, graduating in 1983. A year after taking the Navy aviation exam, Tammie Jo found a recruiter who processed her application. She attended officer candidate school in Pensacola, Florida, and was assigned to a training squadron at Naval Air Station Chase Field in Beeville, Texas. Tammie Jo was an instructor pilot, teaching students how to fly the Navy T-2 trainer. She later flew the A-7 Corsair in Lemoore, California. Tammie Jo was among the first female fighter pilots for the Navy and was the first woman to fly an F/A-18 Hornet. In 1993, after 10 years of service, she left the Navy. Earlier this week, Tammie Jo completed the successful emergency landing of Southwest flight 1380 at the Philadelphia International Airport. The Boeing 737-700 lost an engine, causing shrapnel to strike a window. With 148 people on board, one woman died and seven were injured. Thank you for your service, Tammie Jo.
TAMU Health Sciences@TAMHSC
We are proud to "Teal Out" in support of #StepInStandUp! Even one such incident is too many. https://t.co/NQdJ5UyHkA