What states spend the least, per-capita? Nevada is at top of list (Part 1)

Govpro looked at the numbers and found that Nevada spends the least per-capita on government. The other top five states with lowest per-capita spends are Texas, Georgia, Florida and Illinois. Among the 20 states with the lowest per-capita spends, almost half are in the Midwest, and six are in the southern United States. The five states with the highest per-capita spending rates are Vermont, New Mexico, Wyoming, Hawaii and Alaska, which has the highest per-capita spending rate among all states.

Govpro compiled data on state government per-capita spending from a variety of sources, including the Tax Foundation, the Kaiser Family Foundation’s Statehealthfacts.org site, the Council of State Governments’ latest “Book of the States,” the National Conference of State Legislatures, the Business Council of New York State and the Thinkingarizona.com public policy research site.

We consulted other spending statistics sources, including the U.S. Census Bureau, National Association of State Budget Officials, Center on Budget and Policy Priorities and the National Governors Association.

In the Govpro 2012 ranking, we included data on per-capita amounts of federal government expenditures from the Council of State Governments. That is the one minor difference between this 2012 ranking and our 2009 ranking. The reason for the change: federal government expenditures as a percent of current-dollar government consumption expenditures and gross investment continues to grow, rising from 39 percent in 2009 to almost 41 percent in 2011, according to the U.S. Bureau of Economic Analysis.

Nevada state government officials are proud of the state’s strong ranking in Govpro’s 2012 per-cap spending report. “This ranking reflects the fact that Nevada has the most friendly business climate in the country with no corporate or personal income taxes, as well as some of the most attractive incorporation laws in the nation,” said Dave Berns, director of communications for the Nevada Governor’s Office of Economic Development. “Not only is Nevada a smart place to do business but [is] also a highly efficient state when it comes to the spending of public money.”

Government spending data can be an indicator of future trends, says Bill King, president and CEO at the Nacogdoches, Texas-based Nacogdoches Economic Development Corporation. “I like to look at per-capita government spending from a business or taxpayer point of view because it is a good reflection of how much government is costing you and/or your business. I also believe that the trend lines over time (increasing, decreasing or staying the same) are a leading indicator of what is likely to happen with your taxes in the future. That’s important because we live in a highly mobile society where costs can be changed simply by relocating to another political jurisdiction,” King told Govpro.

Texas’ relatively low cost of government has led to success in job creation, King says. “Nearly half of all net new jobs created in the United States in 2010 were created in Texas.”

The Nacogdoches economic market consists of seven counties with a total population of more than 300,000. Nacogdoches is in the East Texas Forest Country and is two hours north of Houston.

In part 2 of this report, we will present a list of five more states with lowest per-capita government spending.

Check out Govpro’s previous ranking (2009) of the states in per-capita government spending.

Please send comments on Government Product News’ analysis of state per-capita spending to [email protected]. To order a spreadsheet (in PDF) with per-capita spending ranked for all 50 states plus more analysis, go to: americancityandcounty.com/2012-state-government-per-capita-spending-ranking-analysis