Stretched Net: The Retrenchment of State and Local Social Welfare Spending Before the Recession

This article examines social welfare spending on the eve of the recession to understand the likely effects of the economic downturn on the funding of state and local social welfare systems. It finds that state and local spending outside of medical assistance lost much of its real fiscal value since the last recession of 2001-02, especially when inflation-adjusted expenditures are compared to measures of need. Other trends include a growing concentration of state social welfare budgets around medical assistance, declines in federal assistance to states, and growing differences in social service spending across states of different fiscal capacities. The recession may exacerbate most of these developments and, along with the federal stimulus package, reduce the role of state governments in funding the national social welfare system.