A blog from BEA Director Vipin Arora
It’s widely recognized that BEA’s economic statistics are among the world’s most closely watched. That’s because our data about trade, consumer prices, and economic activity underpin decisions about interest rates and trade policy, taxes and spending, hiring and investing, and more. You might, however, be unaware that BEA data are also used in allocating hundreds of billions in federal funds to state and local governments each year.
Our personal income by state statistics are a great example. They are most often used to assess regional economic performance, but these estimates also guide the distribution of billions of dollars in federal funding and underpin statutory formulas for tax limits, spending caps, and health care allocations.
Specifically, the federal government relies on BEA’s personal income by state statistics to distribute around $700 billion annually to states through programs such as Medicaid, Child Care and Development Block Grants, and the National School Lunch Program.
State governments also use personal income statistics for a host of other critical programs. For example, at least 33 states statutorily mandate the use of personal income by state statistics to set tax/revenue limits or appropriation/expenditure limits or to guide the allocation of health care spending.
At BEA, we produce statistics that inform decision-making at every level of government. These statistics not only measure the economy—they also provide critical inputs into funding formulas and fiscal frameworks used across states and programs.