NCPA - National Center for Policy Analysis

Some States More Equal Than Others In Federal Spending

February 1, 2000

Some states' taxpayers send more money to Washington than the states get in return in terms of federal spending. The more fortunate, however, send in less and get more back. In the second category, New Mexico is the hands-down winner, according to the latest annual report from the office of Sen. Daniel Patrick Moynihan (D-N.Y.).

  • In fiscal 1998, New Mexico racked up a surplus of about $3,700 per capita -- almost 30 percent greater than the surplus for Virginia, the next highest state.
  • Other states with high per capita surpluses were North Dakota, Montana, Mississippi, Kentucky, West Virginia, Maryland, Hawaii and Alaska.
  • By contrast, Connecticut paid $2,400 per resident more to the federal government than it got back.
  • Other high deficit states were Nevada, Minnesota, Wisconsin, Michigan, Illinois, New York, New Hampshire, New Jersey and Delaware.

By and large, residents of states in the Northeast and Great Lakes region pay much more in taxes than they receive in federal spending, while many Sun Belt and Great Plains states get more money than they send to Washington.

In overall dollars, California had the highest deficit -- paying $19 billion more to Washington than it got back.

Interestingly, the states that lose money tend to be more liberal and Democratic. The states that gain are more conservative and Republican. Analysts suggest that liberals may want to rethink their love affair with big government.

Source: Macroscope, "Give and Take," Investor's Business Daily, February 1, 2000.


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