Every year, the U.S. Census Bureau publishes the Annual Survey of State and Local Government Finances. This is the country’s only source of state and local spending data, allowing a detailed state-by-state comparison. The survey also divides spending data into categories, making it possible to analyze which public services states prioritize.
Overall, public welfare is the largest expenditure for most states. However, the level at which states prioritize assistance programs over other public services, such as roads and police, differs.
Minnesota, for instance, has a massive welfare system, dedicating a larger share of its revenue to assistance programs than most states. Additionally, Minnesota ranks among the top states for poverty-adjusted welfare spending, making it one of the most generous in the nation. In 2022, Minnesota spent approximately $42,000 (in 2023 $) per person on poverty, ranking second-highest in the entire country.
This trend continued in 2023, as newly released data from the U.S. Census Bureau reveals.
A 2023 Update
In 2023, Minnesota spent nearly $46,000 on public welfare per person in poverty, ranking second-highest after Massachusetts. Meanwhile, both the median state and the national were 55 percent of Minnesota’s level.
Figure 1: Spending on Public Welfare per Person in Poverty, 2023
Welfare continues to outpace other public services
Not only does welfare spending constitute the largest share of all spending, but it is also the fastest-growing category in Minnesota’s budget, a trend that has also been observed nationally.
In 2023, public welfare accounted for 31 percent of total direct general expenditure, followed by spending on Elementary and Secondary Education. Nationally, public welfare accounted for a lower share (24 percent) of total spending but was still the highest among all the spending categories.
Figure 2: Share of Direct General Expenditure by Category, Minnesota, 2023
In inflation-adjusted dollars, welfare grew by 299 percent between 1990 and 2023. This is twice the growth of Elementary and Secondary Education, the second-fastest growing category.
Figure 3: Percent Change in General Direct Expenditure by Category, Minnesota (1990=100)
It’s worth noting that this data does not yet reflect spending hikes enacted in the 2023 session, which took effect in the 2024 fiscal year.