Yearly Report PART II Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Expenditures by function

Published on Tue, April 14, 2020 12:41PM PDT | Updated Fri, April 17, 2020 6:26PM PDT

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Expenditures by function > Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations > PART II > Government 10-K

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Expenditures by function42

We review expenditures in this MD&A in two ways, by function and by reporting segment. This section discusses expenditures by function.

Fiscal year 2017 compared with fiscal year 2016

 

 

 

2017

 

 

2016

 

 

Changes 2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In billions, except percentages)

 

Total

 

Federal 1

 

State and

Local

 

 

Total

 

Federal 1

 

State and

Local

 

 

Total

 

Federal 1

 

State and

Local

 

Total

 

Federal 1

 

State and

Local

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transfer payments to individuals and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

subsidies

 

$

2,933

 

$

2,202

 

 

$

731

 

 

$

2,812

 

$

2,119

 

 

$

693

 

 

$

121

 

$

83

 

 

$

38

 

4%

 

4%

 

 

 

5%

Personnel and compensation

 

 

1,623

 

 

574

 

 

 

1,049

 

 

 

1,574

 

 

564

 

 

 

1,010

 

 

 

49

 

 

10

 

 

 

39

 

3%

 

2%

 

 

 

4%

Payments to others for goods and services

 

 

677

 

 

120

 

 

 

557

 

 

 

690

 

 

152

 

 

 

538

 

 

 

(13

)

 

(32)

 

 

 

19

 

(2)%

 

(21)%

 

 

 

4%

Capital expenditures

 

 

534

 

 

172

 

 

 

362

 

 

 

497

 

 

146

 

 

 

351

 

 

 

37

 

 

26

 

 

 

11

 

7%

 

18%

 

 

 

3%

Net interest paid

 

 

333

 

 

262

 

 

 

71

 

 

 

313

 

 

240

 

 

 

73

 

 

 

20

 

 

22

 

 

 

(2)

 

6%

 

9%

 

 

 

(3)%

Other

 

 

(30)

 

 

(30)

 

 

 

 

 

 

(26)

 

 

(26)

 

 

 

 

 

 

(4

)

 

(4

)

 

 

 

15%

 

15%

 

 

 

—%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total expenditures

 

$

6,070

 

$

3,300

 

 

$

2,770

 

 

$

5,860

 

$

3,195

 

 

$

2,665

 

 

$

210

 

$

105

 

 

$

105

 

4%

 

3%

 

 

 

4%

 

Estimated impact of inflation on total expenditures

 

 

 

 

 

 

 

 

 

 

 

 

 

$

121

 

$

66

 

 

$

55

 

2%

 

2%

 

 

 

2%

 

Estimated impact of population growth on total expenditures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

37

 

 

20

 

 

 

17

 

1%

 

1%

 

 

 

1%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1 Federal expenditures exclude transfers to state and local governments. See separate schedule and discussion of intergovernmental transfers at Note 23 – Intergovernmental transfers (Part II, Item 8 within this annual report).

2 Key changes are highlighted in gray in the table above and are discussed in the sections below.

2016 to 2017 | Federal transfer payments to individuals and subsidies

The $83 billion increase in federal transfer payments to individuals and subsidies reflects both increases and decreases among major government programs. The most significant changes are discussed below.

Social Security (Old Age, Survivor, and Disability Insurance, or OASDI)

Social Security payments increased $29 billion or 4%, driven by:

  • a 1.0 million person or 2% increase in the number of OASDI recipients, including an increase of 1.2 million recipients or 2% for Old Age and Survivor Insurance (OASI), offset in part by a decrease of 0.2 million recipients or 2% for Disability Insurance (DI); and
  • a 3% increase in the average monthly benefit payment, including increases of $36 or 3% for OASI and $23 or 2% for DI. OASDI benefit payments are indexed for inflation.

The average OASI and DI recipient ages remained 71 and 48, respectively, during these periods, while the population aged 65 years and older, the cohort we track that is most likely to be receiving OASI benefits, increased 2%.

Other transfer payments to individuals and subsidies

Other transfer payments to individuals and subsidies increased $52 billion or 35%, primarily driven by a $43 billion or 94% increase in federal education expenditures. This federal education expenditures increase was driven primarily by $24 billion, or 1,193%, higher Federal Direct Student Loan Program (FDSL) expenditures and $10 billion, or 671%, higher Federal Family Education Loans (FFEL) expenditures.

The $24 billion increase in FDSL expenditures includes a $35 billion or 352% increase in FDSL program costs, offset in part by an $11 billion or 139% increase in FDSL program credits that reflected accounting for changes in actual and anticipated future program performance. During this period there was a 0.6 million person or 4% decrease in the number of FDSL recipients, while there was a 1% increase in the average dollar amount of loans disbursed. Also during this period, average undergraduate tuition and required fees increased 1%.

Since July 1, 2010, the FFEL program has not originated any new loans. However, existing loans continue to be serviced by lenders and guaranty agencies. The $10 billion increase in FFEL expenditures during this period is therefore attributed exclusively to the reestimates of costs related to direct loan subsidies, loan guarantee subsidies, and the interest on each of these. See Exhibit 99.03 for a discussion of the accounting for government loans.

2016 to 2017 | State and local transfer payments to individuals and subsidies

The $38 billion growth in state and local transfer payments to individuals and subsidies was driven primarily by a $31 billion or 6% increase in Medicaid and CHIP payments. This increase reflects:

  • 1.4 million or 2% growth in person-year equivalent enrollment, driven primarily by a 1.0 million or 9% increase in enrollees newly eligible for Medicaid through the Affordable Care Act, as well as a 0.2 million or 1% increase in adult enrollees; and
  • a $58 or 1% increase in annual per enrollee spending, driven by a $294 or 1% increase in per enrollee spending for the disabled, the most expensive group served, offset in part by a $152 or 3% decrease in per enrollee spending for expansion adults, as costs specific to this group were lower than the States anticipated.43

The majority of the growth in Medicaid benefit expenditures was in the form of capitation payments, which are payments made to Medicaid healthcare providers at a set amount for each enrolled person assigned to them during the period, based on average expected healthcare utilization for that enrollee, regardless of whether the enrollee seeks care.

2016 to 2017 | State and local personnel and compensation

The $39 billion increase in state and local personnel and compensation payments reflects growth of $26 billion or 4% in compensation for current employees and $13 billion or 4% in compensation for former employees.

Current employees

The 4% increase in compensation for current employees was driven by a 5%** or $1.99** per hour increase in compensation (excluding pension), including 5%** growth in wages and salaries and 5%** growth in health insurance benefits. In addition, there was a net 1%** increase in the number of state and local government full-time equivalent employees, including a 1%** increase in full-time equivalent non-education employees during this period.

Compensation for current employees is reported net of current employee contributions to their own pensions. We count the employer portion of pension contributions as expenditures when paid out to the former employees and therefore include them in compensation for former employees below. Pension contributions made by current employees to their own pensions grew 7% during this period. Contributions made by state and local government employers on behalf of their employees grew 11% during this period, primarily related to defined benefit plans, which made up 93% of total employer pension contributions in 2017 and increased 12% during the period.

Former employees

The 4% increase in compensation for former employees was driven by a 3% increase in the number of retirees receiving periodic benefits and a 1% increase in the average benefit payment per recipient. The increase in number of retirees receiving benefits may be driven in part by our aging population; our population aged 65 years and older grew by 3% during this period.

Fiscal year 2017 compared with fiscal year 2012

 

 

2017

 

 

2012

 

 

Changes 2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In billions, except percentages)

 

Total

 

Federal 1

 

State and

Local

 

 

Total

 

Federal 1

 

State and

Local

 

 

Total

 

Federal 1

 

State and

Local

 

Total

 

Federal 1

 

State and

Local

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transfer payments to individuals and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

subsidies

 

$

2,933

 

$

2,202

 

 

$

731

 

 

$

2,344

 

$

1,813

 

 

$

531

 

 

$

589

 

$

389

 

 

$

200

 

25%

 

21%

 

 

 

38%

Personnel and compensation

 

 

1,623

 

 

574

 

 

 

1,049

 

 

 

1,432

 

 

533

 

 

 

899

 

 

 

191

 

 

41

 

 

 

150

 

13%

 

8%

 

 

 

17%

Payments to others for goods and services

 

 

677

 

 

120

 

 

 

557

 

 

 

767

 

 

269

 

 

 

498

 

 

 

(90)

 

 

(149)

 

 

 

59

 

(12)%

 

(55)%

 

 

 

12%

Capital expenditures

 

 

534

 

 

172

 

 

 

362

 

 

 

514

 

 

183

 

 

 

331

 

 

 

20

 

 

(11)

 

 

 

31

 

4%

 

(6)%

 

 

 

9%

Net interest paid

 

 

333

 

 

262

 

 

 

71

 

 

 

295

 

 

221

 

 

 

74

 

 

 

38

 

 

41

 

 

 

(3)

 

13%

 

19%

 

 

 

(4)%

Other

 

 

(30)

 

 

(30)

 

 

 

 

 

 

(37)

 

 

(37)

 

 

 

 

 

 

7

 

 

7

 

 

 

 

(19)%

 

(19)%

 

 

 

—%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total expenditures

 

$

6,070

 

$

3,300

 

 

$

2,770

 

 

$

5,315

 

$

2,982

 

 

$

2,333

 

 

$

755

 

$

318

 

 

$

437

 

14%

 

11%

 

 

 

19%

 

Estimated impact of inflation on total expenditures

 

 

 

 

 

 

 

 

 

 

 

 

 

$

358

 

$

201

 

 

$

157

 

7%

 

7%

 

 

 

7%

 

Estimated impact of population growth on total expenditures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

189

 

 

106

 

 

 

83

 

4%

 

4%

 

 

 

4%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1 Federal expenditures exclude transfers to state and local governments. See separate schedule and discussion of intergovernmental transfers at Note 23 – Intergovernmental transfers (Part II, Item 8 within this annual report).

2 Key changes are highlighted in gray in the table above and are discussed in the sections below.

2012 to 2017 | Federal transfer payments to individuals and subsidies

The $389 billion increase in federal transfer payments to individuals and subsidies reflects increases across all major programs except unemployment insurance and SNAP. The most significant changes are discussed below.

Social Security

Social Security payments increased $171 billion or 22%, driven by:

  • a 5.1 million person or 9% increase in the number of OASDI recipients, including increases of 5.5 million recipients or 12% for OASI, offset in part by a decrease of 0.4 million recipients or 4% for DI; and
  • a 10% increase in the average monthly benefit payment, including increases of $138 or 12% for OASI and $78 or 8% for DI.

The average OASI recipient age remained 71 during these periods, while the average DI recipient age increased 4%, from 46 to 48 years old in 2017. The population aged 65 years and older, the cohort we track that is most likely to be receiving OASI benefits, increased 18%.

Medicare

Medicare payments (net of premiums received) increased $152 billion or 28%, driven by a 7.8 million* person or 15%* increase in Medicare enrollees and a 7%* increase in average costs per beneficiary (net of premiums received). Medicare premiums received increased $24 billion or 38% during this period.

Our population aged 65 years and older (one eligibility requirement for Medicare) grew by 18% during this period. General medical care cost inflation was 15%, with prices of medical commodities44 inflating 13%, medical services inflating 16%, and hospitals inflating 24%.

2012 to 2017 | State and local transfer payments to individuals and subsidies

The $200 billion growth in state and local transfer payments to individuals and subsidies was driven primarily by a $173 billion or 44% increase in Medicaid and CHIP payments. This increase reflects:

  • 15.8 million or 27% growth in person-year equivalent enrollment, including growth of 0.8 million adults (5% growth), 0.6 million disabled enrollees (6% growth), and 12.2 million enrollees newly eligible for Medicaid through the Affordable Care Act; and
  • a $774 or 11% increase in annual per enrollee spending, driven by a $2,224 or 12% increase in per enrollee spending for the disabled, the most expensive group served, offset in part by a $466 or 3% decrease in per enrollee spending for the aged, the second most expensive group served.43

The majority of the growth in Medicaid benefit expenditures was in the form of capitation payments.

2012 to 2017 | State and local personnel and compensation

The $150 billion increase in state and local personnel and compensation payments comprised growth of $84 billion or 13% in compensation for current employees and $66 billion or 26% in compensation for former employees.

Current employees

The 13% increase in compensation for current employees was driven by a 13%** or $4.72** per hour increase in compensation (excluding pension), including 12%** growth in wages and salaries and 16%** growth in health insurance benefits. In addition, there was a net 2%** increase in the number of state and local government full-time equivalent employees, including a 3%** increase in full-time equivalent education employees during this period.

Pension contributions made by current employees to their own pensions grew 25% during this period. Contributions made by state and local government employers on behalf of their employees grew 53% during this period, primarily related to defined benefit plans, which made up 93% of total employer pension contributions in 2017 and increased 56% during the period.

Former employees

The 26% increase in compensation for former employees was driven by an 18% increase in the number of retirees receiving periodic benefits and an 11% increase in the average benefit payment per recipient. The increase in number of retirees receiving benefits may be driven in part by our aging population; our population aged 65 years and older grew by 18% during this period.

2012 to 2017 | Federal payments to others for goods and services

The $149 billion decrease in federal payments to others for goods and services was driven in large part by a $58 billion or 14% decrease in Department of Defense (DOD) military operations and maintenance and procurement expenditures, a $21 billion or 100% decrease in costs associated with the TARP, a $21 billion or 280% decrease in costs associated with the federal government taking conservatorship over Fannie Mae and Freddie Mac during the financial crisis, and a $13 billion or 286% decrease in Federal Deposit Insurance Corporation (FDIC) deposit and debt guarantee costs. More information on these costs can be found in the respective Fiscal year 2017 compared with fiscal year 2012 discussions under Expenditures by Segment below and:

  • DOD - within Common Defense, National defense; and
  • TARP and FDIC - within General Welfare, Federal economy and infrastructure expenditures.

Fiscal year 2017 compared with fiscal year 2007

 

 

2017

 

 

2007

 

 

Changes 2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In billions, except percentages)

 

Total

 

Federal 1

 

State and

Local

 

 

Total

 

Federal 1

 

State and

Local

 

 

Total

 

Federal 1

 

State and

Local

 

Total

 

Federal 1

 

State and

Local

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transfer payments to individuals and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

subsidies

 

$

2,933

 

$

2,202

 

 

$

731

 

 

$

1,709

 

$

1,293

 

 

$

416

 

 

$

1,224

 

$

909

 

 

$

315

 

72%

 

70%

 

 

 

76%

Personnel and compensation

 

 

1,623

 

 

574

 

 

 

1,049

 

 

 

1,229

 

 

451

 

 

 

778

 

 

 

394

 

 

123

 

 

 

271

 

32%

 

27%

 

 

 

35%

Payments to others for goods and services

 

 

677

 

 

120

 

 

 

557

 

 

 

627

 

 

197

 

 

 

430

 

 

 

50

 

 

(77)

 

 

 

127

 

8%

 

(39)%

 

 

 

30%

Capital expenditures

 

 

534

 

 

172

 

 

 

362

 

 

 

465

 

 

139

 

 

 

326

 

 

 

69

 

 

33

 

 

 

36

 

15%

 

24%

 

 

 

11%

Net interest paid

 

 

333

 

 

262

 

 

 

71

 

 

 

251

 

 

237

 

 

 

14

 

 

 

82

 

 

25

 

 

 

57

 

33%

 

11%

 

 

 

407%

Other

 

 

(30)

 

 

(30)

 

 

 

 

 

 

(8)

 

 

(8)

 

 

 

 

 

 

(22)

 

 

(22)

 

 

 

 

275%

 

275%

 

 

 

—%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total expenditures

 

$

6,070

 

$

3,300

 

 

$

2,770

 

 

$

4,273

 

$

2,309

 

 

$

1,964

 

 

$

1,797

 

$

991

 

 

$

806

 

42%

 

43%

 

 

 

41%

 

Estimated impact of inflation on total expenditures

 

 

 

 

 

 

 

 

 

 

 

 

 

$

803

 

$

434

 

 

$

369

 

19%

 

19%

 

 

 

19%

 

Estimated impact of population growth on total expenditures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

337

 

 

182

 

 

 

155

 

8%

 

8%

 

 

 

8%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1 Federal expenditures exclude transfers to state and local governments. See separate schedule and discussion of intergovernmental transfers at Note 23 – Intergovernmental transfers (Part II, Item 8 within this annual report).

2 Key changes are highlighted in gray in the table above and are discussed in the sections below.

2007 to 2017 | Federal transfer payments to individuals and subsidies

The $909 billion increase in federal transfer payments to individuals and subsidies reflects increases across all major programs. The most significant changes are discussed below.

Social Security

Social Security payments increased $358 billion or 62%, driven by:

  • an 11.8 million person or 24% increase in the number of OASDI recipients, including increases of 10.2 million recipients or 25% for OASI and 1.6 million recipients or 18% for DI; and
  • a 28% increase in the average monthly benefit payment, including increases of $317 or 32% for OASI and $200 or 23% for DI.

The average OASI recipient age remained 71 during these periods, while the average DI recipient age increased 7% from 45 to 48 in 2017. The population aged 65 years and older, the cohort we track that is most likely to be receiving OASI benefits, increased 34%.

Medicare

Medicare payments (net of premiums received) increased $263 billion or 62%, reflecting a 14.0 million* person or 32%* increase in Medicare enrollees combined with a 24%* increase in average cost per beneficiary (net of premiums received). Medicare premiums received increased $39 billion or 77% during this period.

Our population aged 65 years and older (one eligibility requirement for Medicare) grew by 34% during this period. General medical care cost inflation was 36%, with prices of medical commodities inflating 30%, medical services inflating 39%, and hospitals inflating 68%.

Other

Other transfer payments to individuals and subsidies increased $124 billion or 160%, driven primarily by a $61 billion or 222% increase in federal education expenditures and a $35 billion or 100% increase in federal refundable premium tax credits made available through the ACA (paid to families and individuals to assist them in purchasing health insurance).

The 222% increase in federal education expenditures was driven primarily by a $21 billion or 468% increase in FDSL expenditures and a $14 billion or 91% increase in Pell grant expenditures.

The $21 billion increase in FDSL expenditures includes a $39 billion or 729% increase in direct loan program costs, offset in part by a $18 billion or 1,814% increase in FDSL program credits that reflected accounting for changes in actual and anticipated future program performance. During this period, there was a 12 million person or 485% increase in the number of FDSL recipients, while there was a 59% increase in the average dollar amount of loans disbursed.

The $14 billion increase in Pell grant expenditures reflects a 39% increase in the number of Pell grant recipients and a 51% or $1,256 increase in the average grant per recipient, driven primarily by the ARRA.

During this period, average undergraduate tuition and required fees increased 51%.

2007 to 2017 | State and local transfer payments to individuals and subsidies

The $315 billion growth in state and local transfer payments to individuals and subsidies was driven primarily by a $270 billion or 91% increase in Medicaid and CHIP payments. This increase reflects:

  • 27.4 million or 59% growth in person-year equivalent enrollment, including growth of 5.9 million children (26% growth), 5.3 million adults (52% growth), and 12.2 million enrollees newly eligible for Medicaid through the Affordable Care Act; and
  • a $948 or 14% increase in annual per enrollee spending, driven by a $3,459, or 21% increase in per enrollee spending for the disabled, the most expensive group served, offset in part by a $355 or 2% decrease in per enrollee spending for the aged, the second most expensive group served.43

The majority of the growth in Medicaid benefit expenditures was in the form of capitation payments.

2007 to 2017 | State and local personnel and compensation

The $271 billion increase in state and local personnel and compensation payments comprised growth of $138 billion or 23% in compensation for current employees and $133 billion or 72% in compensation for former employees.

Current employees

The 23% increase in compensation for current employees was driven by a 19%** or $6.66** per hour increase in compensation (excluding pension), including 16%** growth in wages and salaries and 33%** growth in health insurance benefits. In addition, there was a net 1%** increase in the number of state and local government full-time equivalent employees, including a 3%** increase in full-time equivalent education employees during this period, offset in part by a 1%** decrease in full-time equivalent non-education employees.

Pension contributions made by current employees to their own pensions grew 32% during this period. Contributions made by state and local government employers on behalf of their employees grew 90% during this period, primarily related to defined benefit plans, which made up 93% of total employer pension contributions in 2017 and increased 97% during the period.

Former employees

The 72% increase in compensation for former employees was driven by a 42% increase in the number of retirees receiving periodic benefits and a 28% increase in the average benefit payment per recipient. The increase in number of retirees receiving benefits may be driven in part by our aging population; our population aged 65 years and older grew by 34% during this period.