If Spending Grows Slower than Personal Income, Will Cuts in Public Services Follow?

• Yes, unless new productivity increases can be found each year

• Costs rise faster than the rate of inflation

  • To attract teachers and health care professionals requires wages that reflect productivity growth in the private sector
  • Other input costs often rise faster than personal income, e.g. heating fuel, health insurance premiums
  • Aging population will increase the costs of providing health care, especially Medicaid-funded long-term care costs

Notes: