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Utah was 48th among the states in per-capita federal spending in 1994, according to a new Census Bureau report.

The ranking reflects a decline that started in the late 1980s and continues as the state's military sector scales back. Utah as recently as 1988 ranked 25th in federal spending per person.But it's not all bad news, according to analysts who say the state has responded to federal cutbacks by diversifying and main-tain-ing one of the healthiest economies in the country.

"If you say the nation is the standard for a diverse economy, we look very good," said Natalie Gochnour, an economist with the Governor's Office of Planning and Budget, who added that Utah in recent years has suffered a $1 billion hit in annual defense spending.

Slowdowns in the defense industry and payroll reductions at military installations have been offset, however, by growth in the software, financial service and manufacturing sectors, said Gochnour.

"We've been able to transition people into other areas," said Vicki Varela, a spokesman for Gov. Mike Leavitt. "Micron is the perfect example."

The Boise-based Micron Technology Inc. announced earlier this year it will build a 3,500-employee computer-chip factory at Lehi.

"Dependence on federal funds is not a good thing in the 1990s," said Varela, noting a persistent Republican push in Washington for less federal spending. "States heavily dependent on federal funds are going to be in a world of hurt."

Only Wisconsin and Illinois got fewer federal dollars per person last year than the Beehive State, according to the study, which said Utahns received an average of $3,979.82 apiece - $1,016.55 below the national average - in benefits from a host of federal programs.

The largest chunk of Utah's $7.6 billion share of the pie was $3.4 billion paid in individual entitlements that ranged from Social Security to disability insurance and veterans' benefits. That figure showed a slight increase over 1993, but reductions occurred in two other areas - the federal payroll in Utah and money spent locally through federal procurements.

The report said funding leveled off in the fourth major area - grants to state and local governments. Total federal spending in Utah was up only slightly from $7.5 billion in 1993. Defense-industry reductions aside, Utah's ranking is due in part to its breadwinner-to-dependent ratio, which is well above the national average because of the state's high fertility rate.

Most neighboring states fared better in the overall rankings. Idaho ranked 36th - behind New Mexico Colorado , Wyoming and Arizona - but ahead of Nevada .

The state most generously endowed in 1994 was Alaska, which received $7,656 per person. Two other states, Maryland and Virginia, topped the $7,000-per-person mark. But none of those did as well as the west-Pacific island of Guam, a U.S. Territory that received $7,883 per person last year, more than anywhere else in America.

Howard Stephenson, president of the Utah Taxpayers Association, a conservative Salt Lake group that regularly calls for government rollbacks, said federal spending reductions are bitter medicine but ought to be endured for the long-term health of the nation.

"What these figures really show is the cost of peace," said Stephenson, who joined others in boasting that Utah's economic response to Washington's shrinkage makes it a role model for the rest of the country.

"If we could do this in every state, we'd probably balance the federal budget," said Stephenson.



Federal spending: Utah (per capita)


1985 25

1988 25

1991 37

1994 48

1994 spending breakdown

Grants to state and local government: $1.2 billion

Salaries and wages: $1.5 billion

Direct payments to individuals (entitlements): $3.4 billion

Procurement (military spending): $1.2 billion

Other programs: $271 million

TOTAL: $7.6 billion

SOURCE: Census Bureau