Idaho receives more federal funding relative to its total spending than two-thirds of all states. And because of its near-bottom average wages, it is reimbursed for social programs at a higher rate than all but two. The state’s proposed budget for next year is one-third funded by federal dollars—a rate more or less consistent over the last several years.
The topic of federal dollars to Idaho has come up in renewed discussions about expanding Medicaid, an option that comes with a windfall of more federal cash. Opponents don’t want to add to federal spending, don’t want to make Idaho more reliant on the federal government and don’t like the idea of the feds dictating policy by attaching dollars to the offer.
But Idaho already takes billions from the feds. Federal dollars boost the economy by paying for military jets, helicopters and bases, dams, parks, forests and nuclear research — all under federal control. The state itself relies hugely on Washington for everything from highways to health programs under state control. How much? The Statesman decided to take closer look at the sources of funding for the next year’s proposed state budget, now being reviewed by the Legislature.
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There’s spending, then there’s spending
When lawmakers talk about the state budget, usually they’re talking about the state general fund, which is mostly financed by two big revenue flows, income and sales taxes. But the general fund is less than half of all spending in the state. Next year, proposed general fund spending is about $3.3 billion. But total spending is $7.6. billion.
Roughly two-thirds of revenue comes from state taxes, fees and other collections. Some of these are for specific purposes, such as fuel tax revenue that goes to fund road maintenance. The rest is federal funds.
Medicaid expansion is optional to states on the Affordable Care Act. Starting in 2014 and through 2016, expansion was 100 percent federally funded, with federal reimbursement sliding gradually to 90 percent from 2017 to 2020. If Idaho were to expand Medicaid this year, it would receive an additional $577 million in federal assistance, adding to the $2.6 billion it already receives.
Expansion supporters cite the existing flow of federal dollars to make the case that Idaho already relies on federal funds for a long list of programs and services including transportation, education, agriculture, economic development, unemployment claims, land management and social programs like the existing Medicaid programs. In fact, more than half the federal aid Idaho now receives goes for Medicaid.
Created in 1965 along with Medicare for seniors, Medicaid is the federal-state program that helps lower-income individuals and families pay for medical and custodial care. Idaho opted into Medicaid in 1966.
In 2013, the latest year for national rankings, federal assistance to Idaho was 34 percent of all state spending, 15th highest among states. Mississippi was highest at over 43 percent; North Dakota lowest at 19 percent.
Idaho also receives the third-highest rate of federal matching funds for social service, medical and medical insurance expenditures, currently 71.5 percent. Only Mississippi and West Virginia are higher.
The reason: Idaho’s low wages. The federal reimbursement rate, known as the Federal Medical Assistance Percentage, or FMAP, is computed by measuring state average per capita income relative to the national average. In 2014, the latest data available, Idaho’s per capita income was the fourth-lowest in the nation, up from second-lowest in 2012.
Learn more about the data
To look up state GDP and personal income: the Department of Commerce’s Bureau of Economic Analysis
Federal government assistance to states in fiscal year 2013
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