Federal Expenditure-to-Revenue Ratios in the United States of America, 1971–85: An Exploration of Spatial Equity under the ‘New Federalism’

Abstract

Previous studies of the spatial balance of combined budgets are reviewed. A new variant of the ACIR (Advisory Commission on Intergovernmental Relations) state-level ‘federal expenditure-to-revenue ratio’ is suggested as an indicator of the relationship between the federal government and an individual state. Patterns of change in such ratios are examined for the period 1971–85, focusing on: Trends in spatial disparity, time series models, correlations with state income and unemployment, and changes associated with the ‘new federalism’. The main conclusion is that past notions about incremental or autoregressive behavior within a single spatial system may need to be modified for the post-1981 period.