Indexing of Social Welfare Expenditures: The Impact on State Budget Allocations (Revised August 1982)

摘要

The paper is one of four policy papers written under the Fiscal Contraction Study contract. It is based on case studies of 13 states; consequently it reviews the experiences of those states and provides comparisons to the others. Indexed expenditures change automatically, and because of the absence of an annual review, indexation can potentially distort state budget allocations. The report concludes that if indexation is highly constraining to state budget allocations, the rules will be modified or circumvented to prevent long-term distortions in state budget priorities. Inflation indexing is likely to be a future issue for social welfare expenditures. The main findings about inflation indexing are: The states that index either AFDC payments or need standards have sustained benefit levels in the face of inflation more effectively than other states, and state education expenditures per pupil have been maintained without indexation because of declining enrollments.