I've spent practically a lifetime in the scientific world examining data — primarily data related to the diagnosis and treatment of human cancer. And believe me, there are some important lessons to be learned from that experience.
One of the most important is that the assumptions and biases of the people collecting and interpreting data can profoundly influence the conclusions they draw. I, and many others, have witnessed such bias confirmation first-hand.
We all have a tendency to accept evidence that confirms what we already believe and to avoid evidence that challenges our expectations. Scientists are no exception.
This is one reason scientific research relies on peer review, reproducibility, and independent examination of evidence. These safeguards are imperfect, but they help us distinguish what the evidence actually demonstrates from what we might prefer to believe.
What does any of this have to do with Washington state and the federal government?
For years, Randall Aamot and I have discussed public equity and commodity markets, Wall Street, taxation, the influence of money in politics, and various other macroeconomic questions. Having spent many years as an officer of a publicly traded company, I found his observations about financial markets particularly enlightening.
What I thought was most interesting was Randall’s view of macroeconomic structural flows of capital and how they shape local economic environments – and how these flows may be all but invisible to the lives of people who are most affected.
Over the past few years, Randy has contended that the federal government collects substantially more money from Washington state than it returns through federal expenditures, and that this flow may impact Washington residents more than they know.
Initially, I was skeptical.
Like many Washingtonians of my vintage, I was well aware of the enormous federal presence in our state: military installations, defense procurement, aerospace, hydroelectric projects, timber management, the Hanford nuclear reservation, and much more.
Surely all that activity represented an extraordinary influx of federal dollars.
But what were the facts of the matter?
Why not measure it?
I believed we could obtain the necessary data, establish consistent accounting methods, and determine what the evidence actually showed.
And that's what we set out to do.
Our objective was to construct the most transparent, comprehensive, and reproducible accounting of federal fiscal flows into and out of Washington that we could manage.
We weren't trying to prove Randy right or me wrong. We wanted to find out.
That meant identifying federal revenue collections, tracking federal expenditures and payments attributable to Washington, documenting our sources, and establishing accounting rules that could be examined and challenged by others.
It has been a substantial undertaking.
And now we have something to report.
Our preliminary accounting suggests that, in recent years, the federal government has collected tens of billions of dollars more annually from Washington than we have identified as returning to the state through federal expenditures and other payments. Our recent annual estimates exceed $30 billion.
These findings are provisional. We are continuing to identify missing data, reconcile different federal reporting systems, and distinguish among expenditures, obligations, and other measures that cannot always be compared directly.
Despite living in what we like to call the “Information Age”, obtaining complete, consistent, and geographically meaningful federal financial data is considerably more difficult than one might imagine.
Randall and I have invested well over a thousand hours in this project during the past six months, and there is still much to do.
You can examine our interactive fiscal balance presentation, and the underlying research and methods are available in our public GitHub repository.
We welcome scrutiny, criticism, and suggestions for improving the accounting.
The larger picture is also worth considering.
For example, the Rockefeller Institute of Government recently made a provisional estimate that the state of Louisiana received approximately $40 billion more in federal expenditures than it contributed in federal revenues in federal fiscal year 2023. Their methods differ from ours, so the figures are not directly interchangeable, but the contrast raises some interesting questions about the distribution of federal resources among states. (Holland, Lynn, and Patrick Schumacher. (2025). Giving or Getting? New York's Balance of Payments with the Federal Government. Rockefeller Institute of Government, August 1, 2025, Table 5, p. 20.)
And those questions bring us to the larger purpose of this project.
Does a persistent federal fiscal imbalance impose meaningful economic costs on Washington state? If so, how large are those costs, and who bears them? Are there offsetting benefits that a simple fiscal balance cannot capture?
Is anyone examining these questions systematically? Is anyone paying attention at all??
I'll continue documenting our methods, explaining our progress, and examining what the numbers actually establish. Randall will be contributing his perspective on what these findings may mean for Washington residents and the state's economic future.
We hope you'll follow along, examine the evidence for yourself, and join the discussion.
— William Cavanagh