By 1990, California s losses over just four years had more than erased the inflows won throughout the early 1980s. California is not the worst off among the states. For fairness and fair-share assessment purposes, we also include the state s share of the U.S. population as an illustrative benchmark. The state s increasing share of the nation s federal tax burden is due in part to a rebounding economy in California relative to other states. Yet despite its greater misery, the state remained a donor state with respect to the rest of the country throughout the 1990s recession.
Federal spending is comprised of expenditures in various categories.
The federal income tax system causes states, such as California, which have an above average income level to pay more in taxes than the average state, despite the fact that vastly higher housing prices and other costs of living mean that the average Californian may actually have considerably less disposable income than the average resident of a lower-taxed state. Over the last fifteen years, no single category of federal spending in California has experienced a more precipitous decline than procurement. In 1998, federal procurement expenditures in California declined to their lowest level since 1981 in current-dollar terms, and 1999's slight uptick does not repair the situation. The figures are far more stark if inflation were taken into account. After adjusting for inflation, California s procurement receipts are now less than half of their 1985 levels.