NPP Trade-Offs Notes and Sources

NPP’s Trade-offs allows citizens to see how funds were spent throughout the year, test out different spending choices, and, if they choose, to advocate for different priorities.

Federal program costs show lump sums for how much the government spent on various programs such as the Department of Defense or the National Endowment for the Humanities. These can then be reallocated to “trade-offs” that show more specific spending choices such as Head Start slots or VA medical care for veterans.

1. Federal Program Costs

Unless otherwise noted, the source for these projected program costs are for the fiscal year and are from the Budget Authority data put out annually by the White House Office of Management and Budget and found here (scroll down to the Public Budget Database section and click Budget Authority).

Program costs reflect total spending estimates (discretionary and mandatory) for Fiscal Year 2016 and are in 2016 dollars. Please note that in some cases reported program costs are not mutually exclusive and therefore not cannot be added together; for instance, F-35 program costs are also included in the larger Department of Defense budget.

Corporate Tax Avoidance (Profits Held Offshore)

From a Citizens for Tax Justice report noting that $2.4 trillion in corporate profits held offshore may lose the U.S. as much as $695 billion in federal income taxes. Unlike other federal spending, this is not funded directly by individual income taxes. Using NPP's localization tool (which is based on individual income tax incidence) is therefore just one way of demonstrating how funds could be used if these loopholes were closed.

Department of Defense

The Department of Defense base budget. This reflects the agency budget for the Department of Defense – Military Programs, less the amount dedicated Overseas Contingency Operations (the off-budget war fund). 

Energy Conservation Programs

Budget authority subfunction 272. Includes spending on energy efficiency and renewable energy. 

F-35 Joint Strike Fighter

As reported in the Department of Defense Program Acquisition Cost by Weapons System for FY2017. Amounts reflect enacted funding for FY 2016. This reflects the research and production costs of the F-35 program, but does not include costs related to aircraft that have already been purchased, such as maintenance and pilot training. This number is also part of the Department of Defense total.

Federal Prison System

From the budget authority for the Bureau "Federal Prison System."

Food & Nutrition Assistance

Budget authority subfunction 605 (Food and nutrition assistance). This includes programs such as the Supplemental Nutrition Assistance Program (SNAP, formerly food stamps), child nutrition programs, the Special Supplemental Nutrition Program for Women, Infants and Children (WIC), and others.

Foreign Aid

Budget authority subfunction 151 (International development and humanitarian assistance). This does not include foreign military aid, the operations of the State Department, or contributions toward international financial institutions such as the International Monetary Fund.

Homeland Security Funding

Office of Management and Budget appendices, Homeland Security Mission Funding by Agency and Budget Account for FY 2016.  This shows Homeland Security mission funding, which is homeland security related funding across multiple government agencies (not just the Department of Homeland Security). We report Homeland Security mission funding across agencies, except for funding through the Department of Defense, which appears in the Department of Defense.

Immigration and Border Enforcement

From the budget authority for bureaus "U.S. Customs and Border Protection" and "U.S. Immigration and Customs Enforcement."

Interest on the Federal Debt

Net interest is interest paid on Treasury debt securities (gross) minus interest received from trust funds as well as other interest, investment, and income. Subfunction codes 901, 902, 903, 908, 909.

Medicaid

This includes funding under the account for “Grants to the States for Medicaid.” It does not include the Center for Medicare and Medicaid Innovation or the Medicaid and CHIP Payment and Access Commission. 

National Endowment for the Arts

Agency funding for National Endowment for the Arts, which funds programs in the arts, humanities, libraries, and museums, among other things. Includes expenditures for grant making activities as well as salaries and wages. 

Nuclear Weapons and Associated Costs

Budget authority subfunction 53 (Atomic energy defense activities), including maintaining the U.S. nuclear weapons stockpile, powering naval ship reactors, and coordinating nuclear response and nonproliferation activities.

Predator and Reaper Drones

As reported in the Department of Defense Program Acquisition Cost by Weapons System for FY2017. Amounts reflect enacted funding for FY 2016. This reflects the research, production and modification costs of the drone programs, as well as fielding of Reaper aircraft and ground stations. It does not include related costs such as pilot training or mission costs.

Wars, ISIS and Pentagon Slush Fund

War and Pentagon slush fund trade-offs reflect costs under the Overseas Contingency Operations fund set aside by Congress.  For detailed notes and sources on NPP’s Cost of War, click here.

2. Local Percentages of Federal Income Taxes

To estimate how much each state, county, city and congressional district contributes to each of the federal programs above, NPP assigns each geography a percentage that represents the area’s share of the total U.S. income tax bill.

States

To assign the state percentages, we use state-level data from the IRS’s Individual Master File System. Specifically, Historic Table 2: Individual Income and Tax Data, by State and Size of Adjusted Gross Income, Tax Year 2012http://www.irs.gov/uac/SOI-Tax-Stats-Historic-Table-2 [i].

To get the percentage for each state, we divide its Income tax amount by the US Income tax amount [ii].

Zip Code Tabulation Area (ZCTA)

Zip code tabulation areas (ZCTAs) are the Census Bureau’s version of postal service zip codes. The basis for all sub-state multipliers is ZCTA rather than the USPS zip code, because ZCTAs can be allocated to other geographic areas of interest, such as congressional districts and counties.

To determine the percentage of total federal individual income tax contributed by each ZCTA, we start with Individual Income Tax ZIP Code Data compiled by the IRS: http://www.irs.gov/uac/SOI-Tax-Stats-Individual-Income-Tax-Statistics-ZIP-Code-Data-(SOI) [iii]. We use tax year 2012 numbers.

To get the percentage of total taxes paid for each ZCTA, we do the following:

  1. Convert the U.S. Postal Service zip codes on the IRS report to their corresponding ZCTAs using this crosswalk file.
  2. Sum column A06500 (Income Tax Paid After Credits) of the IRS report by ZCTA ii.
  3. For each ZCTA, divide the amount paid (from step 2) by the total U.S. income taxes [iv].

Counties, Places, and Congressional Districts

The Individual Income Tax ZIP Code Data is also the basis for the county, place, and congressional district taxes paid.  To get those numbers, we follow steps 1 and 2 above. Then we match the ZCTAs with county, place, and 113th congressional district boundaries using the Missouri Census Data Center’s MABLE Geographic Correspondence Engine with Census 2010 Geography .

MABLE maps each ZCTA to a county or counties. Separate downloads do the same thing for places and congressional districts. When a ZCTA covers more than one county, place, or congressional district, MABLE provides an allocation to describe how much of the ZCTA belongs to each. This allocation is Census 2010 population-based.

For example, consider ZCTA 19317 in Pennsylvania. According to MABLE, 45% of the 19317 population live in Chester County, and 55% live in Delaware.  Therefore, when determining the income taxes paid for each county, 45% of the 19317 amount will be assigned to Chester, and 55% will be assigned to Delaware.

Once we have the allocations from MABLE, we do the following calculations three times—once each for counties, places, and congressional districts.

  1. For each ZCTA, multiply the taxes paid (from the ZCTA-summarized IRS data) by the allocation percentage for its corresponding counties/places/congressional districts.
  2. Summarize the results by county/places/congressional district to get the total income taxes paid for that area.
  3. Divide each area’s total taxes by the total U.S. income taxes. This number is the sum of column A06500 in the original IRS taxes by zip code file.

3. Trade-Off Costs

We get the yearly costs of the trade-offs from the following sources. All amounts are inflation-adjusted to compare to fiscal year 2015 program costs.

Clean Energy Jobs Created

Jobs created by investment in carbon reduction, according to Green Growth, a report by the University of Massachusetts Political Economy and Research Institute and Center for American Progress. Jobs include direct and indirect effects, and are estimated as net jobs created (adjusting for a loss of jobs in fossil fuel energy sectors).

Children Receiving Low-Income Healthcare

Children receiving low-income healthcare for one year is based on the average Medicaid payment for children contained in the Medicare and Medicaid Statistical Supplement produced by the Centers for Medicare and Medicaid. The data year is 2011, and the specific table is Medicaid Payments per Person Served (Beneficiary), by Basis of Eligibility and Area of Residence (Table 13.24). This trade-off reflects the payment per child beneficiary. The data are the most recent available and have been adjusted for inflation.

Elementary School Teachers for One Year

Teacher salary information comes from the Bureau of Labor Statistics' Occupational Employment and Wage Estimates. The average annual compensation of an elementary school teacher (SOC code 252021) for each state is inflated by an additional 40% to approximate the cost of things like health insurance and pension contributions by their employer.  The data year is 2015.

Head Start Slots for Children for One Year

Head Start slot costs are calculated by dividing the total federal Head Start funding in each state by the total number of funded enrollments. The data are for fiscal year 2015 (inflation-adjusted to 2016 dollars) and come from the Early Childhood Learning and Knowledge Center of the Administration for Children and Families.

Households with Renewable Electricity – Solar Photovoltaic for One Year

Households powered by solar photovoltaic energy are calculated by taking the average monthly kilowatt hour usage of households in each state from the Energy Information Administration (Summary Table T5.a, Residential average monthly bill by Census Division, and State), multiplying by 12 to get annual average usage, and multiplying by the cost of solar photovoltaic energy from the Levelized Cost of New Generation Resources in the Annual Energy Outlook 2013 (Table 1 – Total system levelized cost, converted to kilowatts/hour). The cost of solar energy is based on the “Total LCOE” before subsidies for Solar PV3, which is a measure of the total relative cost of utility-scale solar power generation. The data year for usage is 2013 and the data year for renewable energy cost is 2014.

Households with Renewable Electricity – Wind Power for One Year

Households powered by wind energy are calculated by taking the average monthly kilowatt hour usage of households in each state from the Energy Information Administration (Summary Table T5.a, Residential average monthly bill by Census Division, and State), multiplying by 12 to get annual average usage, and multiplying by the cost of wind energy from the Levelized Cost of New Generation Resources in the Annual Energy Outlook 2013 (Table 1 – Total system levelized cost, converted to kilowatts/hour). The cost of wind energy is based on the “Total LCOE” before subsidies for Wind, which is a measure of the total relative cost of utility-scale wind power generation. The data year for usage is 2013 and the data year for renewable energy cost is 2014.

Infrastructure Jobs Created

According to Good Jobs for All, a report by Dorian T. Warren for Columbia University and the Roosevelt Institute (page 37), a $200 billion investment in infrastructure, including roads and bridges, public transportation, and water systems, would yield 3.6 million jobs per year.

Jobs with Supports Created in High Poverty Communities

According to Good Jobs for All, a report by Dorian T. Warren for Columbia University and the Roosevelt Institute (page 29), a $200 billion investment would create 2 million jobs per year in communities where at least 20 percent of residents live below the poverty level. Job creation activities would include working with local business ("anchor institutions" such as hospitals or universities), government, and improving and expanding access to transit, education, job training and childcare.

Military Veterans Receiving VA Medicare Care

The average cost to provide military veterans with Veterans Affairs (VA) medical care is based on the state's total VA medical care expenditures divided by the state's total number of unique patients based on data from the National Center for Veterans Analysis and Statistics. Medical Care expenditures include dollars for medical services, medical administration, facility maintenance, educational support, research support, and other overhead items.  Medical Care expenditures do not include dollars for construction or other non-medical support. The data year is 2014.

Adults Receiving Low-Income Healthcare

Adults receiving low-income healthcare for one year is based on the average Medicaid payment for adults contained in the Medicare and Medicaid Statistical Supplement produced by the Centers for Medicare and Medicaid. The data year is 2011, and the specific table is Medicaid Payments per Person Served (Beneficiary), by Basis of Eligibility and Area of Residence (Table 13.24). The data are the most recent available and have been adjusted for inflation.

Police or Sheriff’s Patrol Officers

Police or sheriff’s patrol officer salary information comes from the Bureau of Labor Statistics' Occupational Employment and Wage Estimates. The annual mean wage of a patrol officer (SOC 333051) for each state is inflated by an additional 40% to approximate the cost of things like health insurance and pension contributions by their employer.  The data year is 2015.

Scholarships for University Students

The scholarship figures come from the average cost for an in-state student's tuition and fees (excluding room and board) at a 4-year public university for the 2012-2013 academic year. The data are obtained from the National Center for Education Statistics Digest of Education Statistics (Table 330-20).

Students Receiving Pell Grants of $5,815

The number of students receiving Pell Grants is based on the current maximum grant of $5,815 for the 2016-2017 school year, for each of the states and for the United States as a whole. Information on the Federal Pell Grant Program can be found at the Office of Postsecondary Education at the US Department of Education.


FOOTNOTES

i This site uses income tax numbers to approximate each locality's contribution to the designated programs, which are funded by federal funds.

ii Income tax amount reflects income taxes owed after the deduction of non-refundable credits. The amount has not been reflected to adjust for the earned income credit or for refundable credits such as the health coverage credit, and additional child tax credit. A complete list of these refundable credits is on the payments section of the 1040.

iii To protect individual identities, some returns and zip codes are excluded from IRS zip code-level reports. See the IRS documentation for details (MS Word doc).

iv For the few ZCTAs that contain two states, we assign the ZCTA to the state that contains most of its population. This assignment doesn’t change the trade-offs calculations—if affects only how the user would search for that ZCTA/”city”.