How Govt Reduces Prosperity

Here is a picture of the relative size of state and local governments relative to the private sector in our region. It is the ratio of the state and local government component of gross state product to the private component. Note how the prosperity driving force of markets is crowded out by big government in New Mexio:
2003 relative size of govt.jpg
How much of a difference does the heavy hand of big government make? Check this picture of disposable income for the same states in our region:
2003 disposable income.jpg

I wonder if we will ever get this?