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Tuesday, December 8, 2009

South Dakota Survives on Federal Handouts -- Blame the Indians?

...or blame farmers, old folks, and the guy in the passing lane?

Linda McIntyre asked an interesting question a couple weeks ago. In our discussion of fiscal policy, I reminded Linda that South Dakota is a welfare state, and that even if we make the drastic cuts to the federal budget that seem to be her prescription for fixing what ails America, we South Dakotans have an obligation to pay back the government for all the services and subsidies and deficit spending from which we have benefited for the last several decades.

Replied Linda,

How much of that extra money from the feds goes to the reservations? I'd like to see a breakdown in that regard.

That got me thinking and Googling. Linda's question suggests (and the comment section is open for those who will upbraid me for trying to read Linda's mind) that Linda will contend that the amount our Lakota neighbors get shouldn't count against us, since those darned Indians aren't real South Dakotans. They're not representative of us honest white folks who work hard and pay our way and then some for every road and cop and hydroelectric dam.

I'm still looking for a breakdown of federal outlays by race. This Census report doesn't provide those specifics, but it does show how much South Dakota state and local government got in grants and other payments from various federal programs in FY2008. Our total take on this count was $1.47 billion. This does not include regular federal spending like the budget for Ellsworth AFB or administration of the VA hospitals. The big ticket items:
  1. Department of Agriculture: $99.8 million. ($70 million of that was food assistance, most of it child nutrition, WIC, and Food Stamps)
  2. Department of Commerce: $3.17 million
  3. Public Broadcasting: $2.26 million
  4. Department of Defense: $322 thousand, mostly for National Guard construction
  5. Department of Education: $76 million. Outlays specifically for American Indian education: $2.22 million (about 3% of the federal education outlays to South Dakota)
  6. Department of Energy: $2.34 million
  7. EPA: $26.4 million
  8. Health and Human Services: $700 million. Of that, Medicare and Medicaid make up $458 million (65%). Indian Health Service: $62.2 million (9%).
  9. Homeland Security $61.7 million.
  10. Housing and Urban Development: $107 million. Homeless programs get $1.26 million (1%). The Native American block grant is $23 million (21%).
  11. Interior: $63.3 million. Under that, Bureau of Indian Affairs: $19.5 million (31%).
  12. Justice: $9.24 million
  13. Labor: $23.2 million
  14. Transportation: $291 million
  15. Veterans Affairs: $2.77 million
FedSpending.org offers some useful data on federal assistance to South Dakota. According to their database, in FY2007 we got $7.4 billion in federal assistance. The program that received the biggest slice of that pie: Crop Insurance, $2.7 billion, over 36% of the dole. The top 25 programs in FY2007:

10.450: Crop Insurance$2,708,800,440
96.002: Social Security_Retirement Insurance$1,036,412,087
93.778: Medical Assistance Program$425,246,043
83.100: FLOOD INSURANCE$359,618,200
96.004: Social Security_Survivors Insurance$329,101,036
20.205: Highway Planning and Construction$312,341,264
96.001: Social Security_Disability Insurance$215,245,566
10.055: Direct and Counter-cyclical Payments Program$192,750,497
64.109: Veterans Compensation for Service-Connected Disability$106,670,281
14.117: Mortgage Insurance_Homes$106,465,076
10.410: Very Low to Moderate Income Housing Loans$100,948,575
10.850: Rural Electrification Loans and Loan Guarantees$72,658,000
10.551: Food Stamps$70,615,574
10.069: Conservation Reserve Program$69,798,978
10.406: Farm Operating Loans$68,717,041
96.006: Supplemental Security Income$62,087,296
10.407: Farm Ownership Loans$49,527,401
84.041: Impact Aid$48,910,648
84.010: Title I Grants to Local Educational Agencies$37,273,903
84.063: Federal Pell Grant Program$31,515,428
93.600: Head Start$30,387,746
14.867: Indian Housing Block Grants$30,017,844
15.048: Bureau of Indian Affairs Facilities_Operations and Maintenance$29,824,094
84.027: Special Education_Grants to States$29,744,116
10.073: Crop Disaster Program$29,398,976

Boy, by that list, it looks like that money targets farmers, old folks, and motorists a lot more than it targets our Lakota neighbors.

Nationally, direct payments comprised 45% of federal assistance, while insurance comprised 33%. In South Dakota, we flip those ratios, with insurance comprising 42% of assistance, and direct payments 31%. So it looks to me like all that crop insurance to our farmers is a major curve-breaker behind our high play-to-pay ratio.

FedSpending.org also breaks down federal assistance by recipient organization. Over 80% of the money, $6 billion, goes to individuals, who aren't tracked in this data. Of the identifiable recipient organizations, the top recipient in FY 2007 was the South Dakota Department of Transportation, getting $319 million... and no, Linda, I don't think they spent all that paving the road to Kyle.

The top 25 recipient organizations, again, from FY 2007:

SOUTH DAKOTA DEPT OF TRANSPORTATION$318,869,614
SOUTH DAKOTA DEPT OF SOCIAL SERVICES$128,368,680
DEPARTMENT OF EDUCATION$108,427,215
EAST RIVER ELEC POW COOP INC$64,931,000
SOUTH DAKOTA DEPT OF EDUCATION AND CULTURAL AFFAIRS$37,535,413
SOUTH DAKOTA STATE UNIVERSITY$36,006,922
SOUTH DAKOTA DEPT OF HEALTH$30,140,703
UNIVERSITY OF SOUTH DAKOTA$26,727,449
OGLALA SIOUX TRIBE$21,389,717
SOUTH DAKOTA DEPT OF ENVIRONMENT & NATURAL RESOURCES$20,944,459
SOUTH DAKOTA DEPT OF LABOR$14,375,404
MILITARY AND VETERANS AFFAIRS,$13,407,055
STATE OF SOUTH DAKOTA$11,931,536
OGLALA LAKOTA COLLEGE$10,851,530
TODD COUNTY SCHOOL DST 66-1$10,493,540
OGLALA SIOUX HSG AUTH$10,184,436
LONEMAN SCHOOL CORP$9,436,403
PLATTE COMMUNITY MEMORIAL HOSPITAL, IN$9,000,000
SOUTH DAKOTA DEPT OF HUMAN SERVICES$8,552,603
DOUGLAS SCHOOL DISTRICT 51-1$7,614,266
91409335-ROSEBUD HSG AUTHORITY$7,122,748
COUNTY OF LAWRENCE$7,068,054
SD DEPARTMENT OF LABOR$6,925,899
PENNINGTON COUNTY$6,901,098
SIOUX FALLS$6,605,811

When I go through the top 600 recipients in that list (entities receiving over $100,000 from Uncle Sam in FY 2007) and check off the ones that sound remotely Indian-related, I get a total just under $200 million (and that's not counting a handful of agencies at the bottom of the chart who paid money back to Washington). I'm sure I missed some, so double my estimate: $400 million for Native American organizations. That upward estimate would still be less than a fifth of the money we get over and above what we pay Uncle Sam, and just 5% of our total federal assistance.

Bottom line, Linda (and all of the rest of you loyal readers): you can't blame the Indians for South Dakota's status as a welfare state. The folks responsible for our tax–spend imbalance: farmers, old folks, and drivers on our wide open roads—i.e., you and me.

11 comments:

  1. Are you saying that Native Americans are getting less than white people?

    Where does most of the poverty lie in SD?

    ReplyDelete
  2. Very good Cory,

    Mike, South Dakota is a "poor" state and if all federal payments were eliminated we would see massive poverty all across the state.

    South Dakota gets more in federal assistance than we send to Washington in tax dollars.

    Joseph g Thompson

    ReplyDelete
  3. Great job once again, Cory. This ought to be mandatory reading by every citizen. Indians comprise about 11% of the South Dakota population and are recipients of a rough apportion of the federal largess. The greatest responsibility for South Dakota being a federal welfare state is the largess of the Farm Bill.
    John Kelley

    ReplyDelete
  4. Steve Sibson12/09/2009 6:23 AM

    Now you guys are getting the real impact of big governemnt. They give the common folks just enough to keep them from screaming too much, and they keep the rest for their own pockets. Progressives need to take responsiblity for rejecting individual natural rights and responsibilities and sending America down the road of socialism. As Thomas Sowell points out, Marxzism transfers wealth, it does not create it.

    ReplyDelete
  5. Michael: I said I couldn't find specific information breaking down federal assistance by the race of the recipient. My point is that the biggest drivers of federal expenses in South Dakota appear to be farmers, old folks, and motorists, not Native Americans specifically.

    Joseph and John: thanks!

    Steve: once again, that wasn't the point.

    ReplyDelete
  6. Cory,

    The point is that the transfer of wealth is going to the poor, but most is transfered to the politically connected. At least I though that was a point to be garnered from you post?

    ReplyDelete
  7. Cory, you are correct when you state you should not be reading my mind. I meant nothing like what you implied I did. You must get a lot of joy putting people down, and I'm glad that I was able to give you that joy in this Christmas season.

    ReplyDelete
  8. Seriously, Linda? Why then did you ask the question? Are you going to look at me straight faced and claim you had no intention whatsoever of trying to ascribe our welfare status to our Indian neighbors? What other logical explanation is there for your question?

    It's not about putting people down, Linda. It's about discussing the facts and not letting anyone insinuate false reasons or racism to support a political agenda.

    ReplyDelete
  9. If we want to get South Dakota off the "welfare rolls," why not get companies to bring a lot of high-paying jobs here? Those people would then presumably pay substantial federal income taxes (which a lot of South Dakotans apparently don't because their incomes are too low).

    How do we get companies to relocate here? Good question. We don't have much of a climate to offer, but we have honest people, low crime rates, pretty good schools, and decent values. We have the prospect of a world-class scientific research facility right in my home town of Lead ...

    ... and we have low state taxes (read "no state income tax, dad-burn it") and low housing costs, so people can keep and invest more of the money they earn than will ever be possible in, say, California, New York, New Jersey, Massachusetts ...

    ReplyDelete
  10. Ah, but the problem, Stan, is that those companies with high-paying jobs only come to South Dakota because they can take advantage of our low wages. The prospect of paying personnel less seems to be more appealing than paying Uncle Sam less.

    ReplyDelete
  11. I beg to differ, Cory. Low wages are one reason, methinks, but not the only reason, that companies come here. If I were a corporate fat cat, I'd look to minimize operating expenses in every possible way: wages, taxes, and medical costs, to name three.

    But if I were a somewhat less obese corporate feline (and I think many of them actually are fairly benevolent human beings), I might also consider the low crime rate, the relatively sound moral values of the people here, and the availability of affordable housing. And, I dare say, the good schools.

    Two big factors count against us when it comes to attracting big, profitable corporations: (1) the weather and (2) the lack of cultural diversity. That's why, I think, so many of our students can hardly wait to get the heck out of here. And they should, I say! They should go to places like Miami and Los Angeles and New York and Boston and "test the waters," if they so desire! In the end, some of them will stay out there, and that's okay; some will tire of the rat race and return, and that's okay too.

    As I've commented before, I will always come off biased on issues of taxation, because my income is entirely independent of where I live. As a business person, I seek to minimize my operating expenses (although that is not the only factor); states like South Dakota are therefore attractive to me. As our "information society" evolves, I suspect more and more single-person operations like mine will come into existence, and states that offer relatively small government, little red tape, and low taxes will have an advantage.

    With winters like the one we've had so far this month, by Jove, we need all the advantages we can get.

    ReplyDelete

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