North Dakota received $6.8 billion of the $2.6 trillion in funds the federal government expended nationally in 2007, which was an increase of 7 percent from 2006.

This month’s “Population Bulletin,” a monthly publication from the North Dakota State Data Center at North Dakota State University, focuses on federal expenditure data obtained from the 2007 Consolidated Federal Funds Report published by the U.S. Census Bureau.

During the mid to late 1990s, federal dollars flowing into North Dakota showed little variation, averaging approximately $4 billion per year. From 1999 to 2002, federal expenditures to North Dakota increased by 12 percent a year on average. Federal expenditures decreased 11 percent from 2002 to 2003, but then increased 5 percent in 2004 and 10 percent in 2005. After a slight dip of 5 percent in 2006, total expenditures to North Dakota increased by 7 percent in 2007.

A sizeable proportion of North Dakota’s increase in 2007 was due to increases in procurement contracts with the U.S. Department of Defense and crop insurance payments. In 2007, 6 percent of all federal funds entering North Dakota were for procurement contracts with the Department of Defense ($412 million), up from 4 percent in 2006 ($238 million). Direct payments for crop insurance totaled $623 million in 2007, up from $464 million in 2006.

Three additional areas saw federal fund increases of at least $80 million from 2006 to 2007. Salaries and wages for active military employees went up by $89 million to $370 million. Nondefense procurement contracts went up by $83 million to $234 million. Highway planning and construction went up by $82 million to $379 million.

In 2007, expenditures for Social Security in North Dakota rose by $58 million to $1.3 billion.

“The fluctuation in federal expenditures for North Dakota during the past seven years is largely due to increased support for agriculture and defense contracting,” says Richard Rathge, State Data Center director. “However, future changes in federal expenditures for our state may be the result of population change, specifically the aging baby boomers and a corresponding increase in Social Security payments.”

Of the $6.8 billion the federal government spent in North Dakota in 2007, nearly one-fifth of the funds went to Social Security. Medicare and crop insurance payments each accounted for approximately 10 percent of the total funds to North Dakota.

Of the more than 400 grant programs receiving federal funds in North Dakota, two programs accounted for $737 million (11 percent) of all federal funds North Dakota received in 2007. The Medicaid program received $358 million and highway planning and construction received $379 million.

Procurement contracts (governmental purchases and contractual outlays) to North Dakota totaled $688 million and salaries/wages for federal employees totaled $915 million in 2007.

While North Dakota received less than .5 percent of all federal funds distributed nationally, the state fared better on a per-capita basis. Per-capita federal expenditures to North Dakota totaled $10,576 in 2007, ranking North Dakota sixth in the nation. Nationally, per-capita federal expenditures totaled $8,339 in 2007, which was 21 percent below North Dakota’s level. Per-capita federal funds to North Dakota ranged from a low of $6,580 in Mercer County to a high of $22,866 in Burke County.

NDSU Agriculture Communication