From Deseret News archives:

Utah piece of federal pie: dinky

Demographics part of why feds spend little per person

Published: Thursday, Oct. 2, 2008 12:24 a.m. MDT
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In dividing its fat budget pie, the federal government spends less per resident in Utah than it does in any other state except Nevada, according to data the U.S. Census Bureau released Thursday.

The federal government spent nearly $17.2 billion in Utah in 2007 on items ranging from salaries for local federal workers to contracts with local companies, Medicare bills, Social Security payments, grants, running military bases and much more.

That comes out to a comparatively paltry $6,486 per Utahn, the report said.

That is a quarter lower than the national average of $8,339 per resident. The only state where the federal government spent less per person was Nevada ($6,032), while Virginia received the most ($14,277). Why is Utah so low? "Utah's age structure plays heavily into it," says University of Utah research economist Pam Perlich.

Essentially, Utah has few senior citizens (second lowest percentage among the states) and many children (the highest percentage among the states). So it receives relatively little in such things as federal Social Security and Medicare payments per person, even though Utah does well in competing among the states for its share of federal wages and procurement contracts.

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For example, Utah ranks No. 50 — dead last — in how much it receives per person for federal "retirement and disability" payments (including Social Security) and in "other direct payments" (which include Medicare). Those two broad categories account for 53 percent of federal spending in states. It also ranks No. 45 in grant money per capita.

Meanwhile, Utah ranked No. 16 among the states for per-person spending in federal procurement, and No. 17 for federal salaries and wages.

When it is all blended together, Utah ranks No. 49 overall.

Perlich said Utah's youthful age structure creates a "sandwich effect" that could add extra tax burdens for residents.

Utahns and their many children have to pay more in local taxes for schools (which get most of their money locally — so other states do not share that burden). Meanwhile, Utahns see much of the federal taxes they pay for such things as Social Security go to other states with more older people.

Following are some other interesting findings in the new Census data:

• Of the $17.2 billion the federal government spent in Utah, $5 billion went for "retirement and disability" payments; $2.4 billion for "other direct payments," which include Medicare; $3.4 billion for grants to Utah groups; $4 billion for procurement contracts; and $2.4 billion in salaries and wages to federal workers living in Utah.

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