Politicians Marco Rubio and Paul Ryan recently introduced a plan tofight poverty by transferring more responsibility to the states. Whilethe federal government offers various assistance programs to U.S.residents in need - anything from unemployment benefits to food stamps -the states provide additional services and benefits.
Right now,the states already bear a substantial burden. They pay for publicpension plans, unemployment insurance, education, Medicaid, and theTemporary Assistance for Needy Families program (TANF), among otherbenefits. However, while most states fund many of these social programs,the amounts and levels they spend vary widely. 24/7 Wall St. identified the states that guaranteed the most benefits in these five categories, and the states that guaranteed the least.
Forthe most part, states that spent the most in one program tend to spentthe most overall. Rhode Island, which ranked as the top-spending statethis year, spent in the top 15 in all five measures we considered.Similarly, states that were close to the bottom of our list for dolingout benefits and services spent less than average in nearly everyspending category.
However, this was not always the case. Stateslike New York, which spent the most in the country on education perpupil and second-most in the country on Medicaid per enrollee, paid thefourth-lowest weekly unemployment benefits relative to lost wages.
Thereasons some states spend more than others on benefits and programs iscomplicated. One factor that seems to be consistently true across thetop and bottom spenders is the political climate. Of the 10 states thatranked as the most generous, nine voted Democratic in the lastpresidential election, with Alaska as the exceptions. Of the 10 statesthat spent the least on their social programs, all but one - Florida -voted Republican.
The political climate can also influence howmuch a state collects in taxes, with Democratic states collecting morethan Republican states. States that spent more on benefits were alsomore likely to have higher median incomes, which mean that tax baseswere also higher. In fact, all five of the states with the highestmedian income are among the top spenders on social programs. Most of theleast generous states have among the lowest median incomes in thecountry.
There does not appear to be a relationship between therelative needs of a state's residents for social programs and thestate's spending. Of the states that spent the most on weekly TANF cashassistance, for example, the vast majority had among the lowest povertyrates in the country.
In an interview with 24/7 Wall St,Michael Leachman, director of state fiscal research at the Center onBudget and Policy Priorities (CBPP), explained that it's hard to explainwhy states that have a greater need for public assistance spend less,while states with better-off populations spend more on benefits. "Youwonder if it isn't to some extent a case of chicken-and-egg," he said."In the states that have urban, higher income populations... there's moneythere, and the politics have evolved to encourage spending on publicprograms. But it is a difficult question to answer."
In order toassess how much or how little a state guarantees in benefits andservices, 24/7 Wall St. examined spending by each state on a number ofdifferent programs. We considered average pension benefit payments perbeneficiary as well as per pupil spending, both published by the CensusBureau for the 2011 fiscal year. Pension benefits include both state andlocal pensions, while per pupil spending reflects the total from allsources of funding.
The Department of Labor's Employment &Training Administration provided unemployment insurance figures,calculated over a 12-month period ending in the third quarter of 2013.Information on TANF figures is from the CBPP. Medicaid payments perenrollee for fiscal 2010 are from the Kaiser Family Foundation. Whilestates receive partial federal funding for TANF and Medicaid, they haveconsiderable discretion over how to implement these programs. All dataused were for the most recent available year.
> Average pension benefits: $15,802 (6th lowest)
> Total per pupil spending: $15,925 (4th highest)
> Medicaid payments per enrollee: $6,158 (18th highest)
> Tax collections per capita: $4,293 (4th highest)
Vermontcollected more taxes per resident in fiscal 2011 than all but threeother states. At $8,988 per capita, the high tax revenue may helpexplain the state's generous benefit programs that year. High state taxrevenue - $8,988 per capita - may have helped account for Vermont'sgenerous benefit programs that year. In 2012, just 6.5% of Vermont'spopulation didn't have health insurance, less than half the nationalrate. And with Vermont officials pushing for universal coverage, healthcoverage in the state may improve even more. In 2011, Governor PeterShumlin signed into law Green Mountain Healthcare, a single-payer plan.The plan is expected to be fully implemented by 2017.
> Average pension benefits: $23,457 (16th highest)
> Total per pupil spending: $12,004 (13th highest)
> Medicaid payments per enrollee: $5,132 (13th lowest)
> Tax collections per capita: $3,548 (7th highest)
Hawaii'sunemployment insurance system was the most generous in the country.Unemployed workers received an average benefit of nearly $423, or 52.5%of the average weekly wage, as of the third quarter of 2013 - both morethan any other state. By either measure this was more than any otherstate. Hawaii also has a two-tiered system of TANF benefit levels,depending on the ability of a family member to work. Even the lowerbenefit level places Hawaii among the most generous states. Last year,the state also eliminated its asset limit, which had previously leftmany families unqualified for TANF due to their savings and otherassets. Opponents of asset limit believe this discourages saving foremergencies.
> Average pension benefits: $22,173 (18th highest)
> Total per pupil spending: $13,871 (8th highest)
> Medicaid payments per enrollee: $7,046 (10th highest)
> Tax collections per capita: $2,756 (15th highest)
Marylandwas one of the wealthiest states in the nation in 2012, when a typicalhousehold earned more than $71,000, the highest of any state. That year,just 10.8% of residents lived below the poverty line, less than in allbut four other states. Like most states, Maryland's pension program tooka hit during the recession, losing 20% of its value in 2009. As of themiddle of last year, however, the fund had recovered substantially,exceeding $40 billion in value.
> Average pension benefits: $24,360 (14th highest)
> Total per pupil spending: $13,467 (10th highest)
> Medicaid payments per enrollee: $7,288 (8th highest)
> Tax collections per capita: $2,541 (20th highest)
Beneficiariesof Pennsylvania's unemployment insurance program received more than$357 per week on average in 2013, among the most in the country. Sincethe start of 2014, Pennsylvania's unemployed may have a rough timebecause federally funded unemployment compensation is ending for nearly90,000 Pennsylvania residents. Pennsylvania was also a top spender oneducation as of fiscal 2011. Total per pupil spending was $13,467 thatyear, nearly $3,000 more than the national average spending.
6. New Jersey
> Average pension benefits: $29,425 (8th highest)
> Total per pupil spending: $15,968 (3rd highest)
> Medicaid payments per enrollee: $8,309 (3rd highest)
> Tax collections per capita: $3,085 (12th highest)
NewJersey was among the nation's highest spenders on education as offiscal 2011, spending close to $16,000 per pupil. This was more than$6,000 per student above the national rate. On a per-student basis, thestate was also among the highest spenders on both teachers and schoolsystem workers. That same year, the average state or local pensionbeneficiary received more than $29,000 per year, one of the largestaverage benefits in the U.S. During his tenure, Governor Chris Christiehas pushed through reforms in both teacher tenure and pension spending.Christie recently began his second term as governor with a "State of theState" speech, in which he pushed further reforms to both education andstate pensions. New Jersey was also a leader in Medicaid spending perenrollee, ranking third in the nation in fiscal 2010.
> Average pension benefits: $23,795 (15th highest)
> Total per pupil spending: $16,674 (2nd highest)
> Medicaid payments per enrollee: $9,310 (the highest)
> Tax collections per capita: $7,708 (the highest)
Alaskanspaid more state taxes than any other state in 2011. Considering theirhigh incomes and the state's low poverty rate, Alaska residents may havebeen able to afford it. Median household income in the state was$67,712 in 2012, higher than all but two other states. Due in part tohigh taxes, the state's revenue in 2011 was $17,630 per capita, by farthe highest in the nation that year. During the 12 months through thethird quarter of last year, however, Alaska's unemployed received $250per week, on average, relatively small compared to the rest of the U.S.Additionally, more than one in five people in Alaska did not have healthinsurance in 2012, more than nearly any other state. Overall, however,Alaskans have access to very generous benefits. For families living inpoverty, the federal food stamp program, together with Alaska's welfaresystem, can cover families for more than 80% of the federal povertylevel and the highest combined benefit as of 2013.
> Average pension benefits: $29,067 (9th highest)
> Total per pupil spending: $13,941 (7th highest)
> Medicaid payments per enrollee: $6,841 (12th highest)
> Tax collections per capita: $3,361 (9th highest)
Massachusettshad $6,832 per person in state revenue as of fiscal 2011, more than allbut eight other states. Much of this likely went to support the state'svarious social safety net programs. Per pupil spending on K-12 schoolswas the seventh highest in the nation that year, while the averageannual benefit payment to state and local pension beneficiaries wasninth-highest in the U.S. The state was also a high spender on Medicaid,paying $6,841 per enrollee as of fiscal 2010, 12th most in the nation.However, this may have been in part due to the high cost of health carein the state. As of the most recent quarter, only care in Alaska wasmore expensive, according to MERIC. Despite the high health care costs,just 3.9% of the state's population did not have health insurance in2012, the lowest%age of any state. The state's 2006 health care reforms,often considered a model for the ACA, are likely the reason for thehigh coverage rates in the state.
> Average pension benefits: $35,079 (the highest)
> Total per pupil spending: $15,600 (6th highest)
> Medicaid payments per enrollee: $7,561 (7th highest)
> Tax collections per capita: $3,754 (5th highest)
Connecticutpension beneficiaries received generous payments in 2011 of more than$35,000 on average - the highest in the country. Connecticut was amongthe highest spenders on education in 2011, spending more than $5,000more per pupil than the national average. Teacher salaries and benefitswere among the highest at that time as well. Connecticut residents werealso among the wealthiest in the nation as of 2012, with more than 11%earning $200,000 or more per year, the highest proportion nationally.
2. New York
> Average pension benefits: $30,871 (5th highest)
> Total per pupil spending: $19,076 (the highest)
> Medicaid payments per enrollee: $8,910 (2nd highest)
> Tax collections per capita: $3,497 (8th highest)
NewYork was one of the top benefit spenders in the nation on a wide rangeof state programs. New York spent $8,910 per Medicaid enrollee in fiscal2010, trailing only Alaska. In 2012, Governor Andrew Cuomo petitionedthe federal government to allow the state to keep some of the billionsof dollars its Medicaid redesign saved. However, a decision on whetherto allow the state to reinvest this money within its own health systemis pending. In addition to its high Medicaid expenses, New York also ledthe nation in per pupil spending as of fiscal 2011, at more than$19,000. TANF benefit levels were among the highest in the nation aswell last year, due in part to a state program that includes a number ofdifferent components, including a variable amount for rent that wellexceeds what some states give in TANF benefits. Of course, New York mustalso raise enough taxes to be able to provide these services. The statecollected $3,500 in fiscal 2011, eighth-most in the U.S.
1. Rhode Island
> Average pension benefits: $31,548 (3rd highest)
> Total per pupil spending: $13,815 (9th highest)
> Medicaid payments per enrollee: $8,229 (5th highest)
> Tax collections per capita: $2,603 (18th highest)
RhodeIsland was one of just six states to pay pension beneficiaries morethan $30,000 in fiscal year 2011; the state paid $31,548 on average. InNovember 2011, state legislators enacted the Retirement Security Act,which introduced considerable reforms to the state's pension program.The act was designed to lower the state's overall pension liabilities,which were projected to increase under the previous system. RhodeIslanders received another relatively generous benefit. The joblessreceived unemployment checks worth nearly 40% of the typical weekly wageon average over the 12 months through the third quarter of last year,among the best compensation nationally.
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