How Minnesota’s spending on public welfare compares to other states: a 2020 update
Every July, the US Census Bureau publishes the State and Local Government Finances Survey. This is a database containing information on where states get their funds and what they spend it on.
Generally, the two biggest spending categories among state and local governments are E-12 education and public welfare. Still, states differ significantly in how much they choose to allocate to each of these programs.
Minnesota, for example, spends more than the national average on both E-12 education and public welfare. But it is especially a national leader when it comes to public welfare spending. In 2019, Minnesota ranked third on state public welfare spending per person in poverty.
What the most recent survey shows
Publishing dates for state and local government finances lag by two years. So, up until July of this year, the more recently available data was for 2019.
In July, the US Census Bureau published their most recent survey enabling us to see how Minnesota compared to other states in 2020.
And much like in 2019, Minnesota still ranked third in state spending on public welfare per person in poverty in 2020. Moreover, between 2019 and 2020 spending per person grew by $4,000, reaching nearly $36,000.
Figure: State government spending on public welfare per person in poverty
Because some states allocate a big chunk of their welfare spending to local governments, looking at both state and local government spending gives a much better comparison of welfare spending among states.
Looking at this metric, Minnesota ranked fourth highest in 2020. Minnesota’s state and local governments spent a total of $39,300 — nearly double the national average — and up $4,000 from last year’s $35,000. Our state was also one of only 9 states that spent over $30,000 on public welfare per person in poverty in 2020.
Figure: Total state and local government spending on public welfare per person in poverty
And while historically there has always been a huge gap between Minnesota and the national average, in recent years that gap has only expanded. In 2010, for instance, Minnesota spent $11,700 more on public welfare per person in poverty compared to the US average. But in 2020, Minnesota led the US average by $18,700.
Figure: Total state and local government spending per person in poverty, 2010-2020
With questions still up in the air about what to do with the state’s budget surplus, it is worth discussing if more spending on public welfare programs is at all necessary.