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How much does your state get from the federal government?

LergnomLergnom Posts: 6,786Registered User Senior Member
I hear sometimes that a big outrage is that money is sent to Washington and "we" don't get it back. One can value what government provides as one wants, but a simple way of looking at is to take the actual amounts sent by each state's taxpayers to Washington and then what Washington sends back in actual amounts to that state. This information is compiled by the somewhat non-partisan but essentially conservative Tax Foundation - taxfoundation.org. They tend to protect that data but they now have the 2005 numbers available for free. Here is a link.

So what does this show?

Here is the list, ranked by dollars back to dollar sent:

New Mexico $2.03
Mississippi $2.02
Alaska $1.84
Louisiana $1.78
West Va $1.76
N. Dakota $1.68
Alabama $1.53
S. Dakota $1.53
Kentucky $1.51
Virginia $1.51
Montana $1.47
Hawaii $1.44
Maine $1.41
Arkansas $1.41
Oklahoma $1.36
S. Carolina $1.35
Missouri $1.32
Maryland $1.30
Tennessee $1.27
Idaho $1.21
Arizona $1.19
Kansas $1.12
Wyoming $1.11
Iowa $1.10
Nebraska $1.10
Vermont $1.08
N. Carolina $1.08
Pennsylvania $1.07
Utah $1.07
Indiana $1.05
Ohio $1.05
Georgia $1.01
Rhode Island $1.00
Florida $.97
Texas $.94
Oregon $.93
Michigan $.92
Washington $.88
Wisconsin $.86
MA $.82
Colorado $.81
Delaware $.77
Illinois $.75
Minnesota $.72
NH $.71
CT $.69
Nevada $.65
New Jersey $.61

Sorry for any formatting issues, but I have no patience for that.

The list shows:

1. Income matters. The states with higher personal income send more to Washington DC than states which are poorer. Texas, for example, has become richer and thus it has dropped relatively recently below $1 back for every $1 sent.
2. There is a general transfer of wealth in this country. BUT, it runs from the richer states to the poorer states and runs almost exclusively from Democratic states to Republican states.

I point this out again: one major wealth transfer in this country runs from Democratic run states to Republican run states. It's not even close. Look at the list. Break even is RI and that is #33. Look at Illinois; they get back 3/4 of every $1 they send.

What this also means is that when S.Carolina (#16 at $1.35) uses incentives to draw business from Washington state, they're in part being subsidized by Washington (#38 at $.88). Competition between the states may be a great idea but it's certainly not being done on an even playing field.

I've heard offered the idea that states should get back what they send. I'm all for it: the GOP run states would be crushed and would have to change their policies to generate higher income, perhaps by investing more in human capital and not trying to keep wages and benefits as low as possible. My state could really use the extra 18 cents per dollar we send to the federal government.

An irony, of course, is that we hear this kind of rhetoric almost exclusively from GOP run states. The governor of Texas has complained notably about this and yet Texas is barely below $1 back - and only crossed that line in recent years - and every single state below them on the list is Democratic , with the possible exception of Nevada (and sometimes Colorado). And yet Republican run states are clearly the ones who benefit from the current system.

So again, let's equalize funding so each state gets what it sends in. I'm all for it.
Post edited by Lergnom on
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Replies to: How much does your state get from the federal government?

  • dstarkdstark Posts: 29,125Registered User Senior Member
    I was looking for this list. Thanks.

    I agree with your conclusions.

    Cal receives .78 for every dollar it sends to the fed govt. That's terrible. I wonder what California's deficit would be if the state got 1.00 for every dollar sent.

    California's politicians are terrible. Feinstein, Boxer, etc. are not delivering the money.
  • tom1944tom1944 Posts: 5,340Registered User Senior Member
    In NJ the R is running an ad that says Pa is x times as large as NJ and has x times more population and their budget is the same as NJ. That shows NJ is overtaxed. If you look at the two States budgets they both raise approximately 25-28 billion through State taxes but NJ received $5 billion from the feds and Pa. about $28 billion. So Pa's budget is actually double NJ's.

    Not saying NJ is not over taxed but if spending from the Feds was equal it sure would look different.
  • LergnomLergnom Posts: 6,786Registered User Senior Member
    I wanted to add that if you look at personal income per capita, there is not a direct link to the chart. Texas, for example, is poorer per capita than Pennsylvania.
  • BCEagle91BCEagle91 Posts: 22,762Registered User Senior Member
    NH is pretty low on the list yet has very low taxes and provides very little in services. It would be best characterized as libertarian. Yes, we don't get back what we send but we still manage quite well.
  • tegatega Posts: 1,792Registered User Senior Member
    This study is so flawed, I don't know where to begin. We have had these discussions several times here. You might want to check some of the old posts.
  • tom1944tom1944 Posts: 5,340Registered User Senior Member
    BC- NH deserves credit for fiscal honesty. Most States want services but not the burden to pay for them. Or like some States what limited services they provide they want the Feds or the rest of the country to pay for.
  • BuddyMcAwesomeBuddyMcAwesome Posts: 890Registered User Member
    You have to realize that most Democratic states are rich because of the rich Republicans in that state.
  • tegatega Posts: 1,792Registered User Senior Member
    The study does not distinguish between different government outlays. Do you know that there are more military (air, marine, army, navy) bases, camps, centers, etc in "red" states than "blue" states? Do you know most retirees move to Georgia, North Carolina, and other "red" states with warmer temperature from "blue" states. Do you know that US has first class labs in New Mexico?

    The study does not distinguish between all these government outlays. Social security, medicare, military, etc.

    Do you that blue states usually have the highest medicaid costs per capita?
  • LergnomLergnom Posts: 6,786Registered User Senior Member
    This isn't a "study." This is reporting from the Tax Foundation about how much each state's residents send to the federal government versus how much they receive back.

    I could poke at your points - as in, California and Texas have the most bases by quite a bit and they are both net losers, while third is Florida and it also is a net loser - but you seem to miss the point.

    And no, this work has not been discredited in part because it is right and in part because it is regularly used as a source for both parties. The Tax Foundation is not a liberal think tank. It is more conservative and is known for calculating "Tax Freedom" days for each state and the nation as a whole.
  • tom1944tom1944 Posts: 5,340Registered User Senior Member
    tega- are you saying that the States with a net plus in revenue from the Feds are not being given an unfair advantage in comparison to States that receive less funding?

    My feeling is that any surplus from what you send as a State to the funds in comparison to what you receive frees up other State funds to be used in lieu of having to raise State revenue. Since Pa. receives about 50% of their State budget from the Feds and NJ receives about 15% for theirs are Pa. residents really only paying for half of their services while NJ residents pay for 85% of theirs. I think it should be really easy to see how much in total dollars or as a percentage the Feds pay of each States yearly budget and I bet the list is the same as the OP. Since State budgets do not include military bases or social security benefits that would give a true picture.
  • tegatega Posts: 1,792Registered User Senior Member
    This isn't a "study."

    Hmm, What is it then?
    This is reporting from the Tax Foundation about how much each state's residents send to the federal government versus how much they receive back

    What point did I miss? I think you seem to have missed the point. When 100000 people retire in California, and they move to South Carolina and receive social security, it is counted as a governemnt outlay in the study. The people have already earned this money; they happen to have paid the taxes on the income in Cali, but are receiving their money in South Carolina. In this study it will show money going to the Fed from Cali without nothing coming to the state.

    Nothing can be concluded from the study because their methodology of governemnt outlay is so flawed.

    Tom1944

    Yes that is what I am saying. Utah is a very large state with very few population. The government owns almost all the land in Utah, in this study any government money sent to Utah to care for the government properties is included, but because Utah has a small polution their tax dollars to the gov might be small. The study will concluded that Utah gets more government money that it contributed. It does not account for the fact that the government money was used to take care of government properties.

    For the study to be relevant, it has to take out all of such money the Fed sends to the states for these things.
  • tom1944tom1944 Posts: 5,340Registered User Senior Member
    So you would agree that a list showing the % of State budget funds received from the Feds would be a fair measure?
  • soccerguy315soccerguy315 Posts: 6,703Registered User Senior Member
    well, the Democrats have both houses on the hill, and the white house... so if they want to change how the money is divided, they should get on that.

    Although, if there wasn't a redistribution of the money, then there would be no need to send ANY of it to the federal government... hmm...
  • Mr PayneMr Payne Posts: 8,850Registered User Senior Member
    Is this what we are calling news these days?

    I thought it would be self-evident that in our unadjusted cost of living structure for federal income tax that richer states would be supporting poorer states. That's just basic quantitative reasoning.

    Considering the 4 big ticket items (no particular order) it doesn't appear that there is all that much geographic bias.
    1. Defense
    2. Medicare
    3. Social Security
    4. National Debt Servicing

    Only defense can be a regional thing, and I'm not so sure it benefits Red states exclusively.
  • tom1944tom1944 Posts: 5,340Registered User Senior Member
    Mr Payne none of the 4 listed are ever included in State budgets. Federal aid is about 50% of Pennsylvania's State budget and 15% of NJ's. Clearly that makes a difference on how much you need to tax your own State residents.
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