The States That Give and Get the Most Federal Dollars

A sheet of new $1 bills on Wednesday, Nov. 15, 2017, at the Bureau of Engraving and Printing in Washington.

A sheet of new $1 bills on Wednesday, Nov. 15, 2017, at the Bureau of Engraving and Printing in Washington. AP Photo/Jacquelyn Martin

 

Connecting state and local government leaders

A new analysis identifies states that have sent more money to Washington than they saw in returned federal spending.

Connecticut, Massachusetts, New Jersey and New York are among the places that come out at the bottom of the heap in a new analysis that compares how the money that flows from states to the federal government stacks up against federal spending within each state.

The Rockefeller Institute of Government examined the distribution of federal revenues and spending for each state, and came up with “balance of payments” figures that measure the gap between the two sums overall and on a per-capita basis to control for population size.

Forty states had a positive balance of payments in the 2017 federal fiscal year, according to the analysis, meaning federal spending in those states was greater than the taxes and other revenues sent from the states to the federal government. Ten states had negative balances.

New York had the largest estimated negative balance of overall payments. The money funneled to the federal government from New York, mostly from income and payroll taxes, was $35.6 billion greater in the 2017 federal fiscal year than federal spending in the state.

New Jersey had the second-largest shortfall. Federal collections in the state exceeded federal spending there by $21.3 billion. Massachusetts had the third largest negative gap: $16.1 billion.

When weighing federal receipts against expenditures on a per-person basis, based on the number of people in each state, Connecticut had the widest negative balance of payments, sending an estimated $15,462 per-person to Washington in fiscal 2017, compared to $11,462 in per-capita federal expenditures in the state, for a negative balance of about $4,000.

Other states with the highest, estimated per-capita negative balances in fiscal 2017 included: New Jersey ($2,368), Massachusetts ($2,343), New York ($1,792) and North Dakota ($720).

The national average per-capita balance of payments was positive, at $1,925 per person, the report says.

The main categories of federal receipts that come from each state that were factored into the Rockefeller analysis included individual income taxes, payroll taxes, corporate income taxes and excise taxes—like those on gasoline and tobacco.

Major types of spending the researchers took into account were direct payments for individuals under programs like Social Security and Medicare, federal grants, contracts and other federal procurement, and wages paid to federal employees.

The states with the highest overall estimated positive balance of payments for the 2017 federal fiscal year included: Virginia ($87.2 billion), Florida ($45.8 billion), Kentucky ($40.7 billion), Maryland ($36.5 billion), and North Carolina ($34.4 billion).

On a per-capita basis the states checking in with top positive balances were Virginia ($10,301), Kentucky ($9,145), New Mexico ($8,692), West Virginia ($7,283) and Alaska ($7,048).

The Rockefeller researchers explain that states with larger shares of high earners, like New York, will inevitably see greater sums of personal income taxes flow to the federal coffers.

They also note that the federal tax system targets grants and other spending in poorer states. And that Social Security and Medicare payments are greater in states with large elderly populations.

Another factor that can affect the balances, the researchers point out, is proximity to Washington, D.C., or large federal facilities.

For instance, Virginia’s beefy positive balance is partly attributable to high concentrations of federal employees and contracts. New Mexico, meanwhile, has large government research installations.

The Rockefeller Institute of Government is a nonpartisan public policy think-tank based in Albany, New York.

It conducted the analysis with financial support from Gov. Andrew Cuomo’s budget office. Cuomo, a Democrat, has been an opponent of changes enacted as part of the 2017 Republican tax overhaul that capped federal deductions for certain state and local taxes.

Curbing the deductions that households could claim on their federal income tax returns for these taxes is expected to especially effect taxpayers in higher tax states such as New York.

The governor on Tuesday said top priorities for New York’s congressional delegation should be repealing the state and local tax deduction cap and securing funds for infrastructure projects.

A full copy of the analysis can be found here.

Bill Lucia is a Senior Reporter for Route Fifty and is based in Washington, D.C.

NEXT STORY: City Leader Wants Residents to Try Balancing the Parks and Rec Budget

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.