Study: Georgia gets more than it gives in federal tax dollars

Conservative Southern politicians love to rail against the profligate spending of the federal government, but their states generally get more from Uncle Sam than their constituents pay in taxes, according to a new report.

That includes Georgia, where the federal government spent $1.29 per person for every $1 its residents paid in taxes in 2015, according to the Rockefeller Institute of Government, the public policy research arm of the State University of New York.

Georgia’s balance sheet ranked in the top half of states, although well below the leaders: New Mexico, West Virginia, Mississippi, Alabama, Virginia and Kentucky. Georgia’s neighbor, South Carolina, made the top 10 as well.

The state taking the biggest hit per capita — paying in the most versus what the state received — was New Jersey, according to the report. Several high-income East Coast states, California, Texas, and a few states in the Midwest came out on the wrong end of the equation.

Federal spending is a common target of politicians during campaign season, and that will certainly continue with the federal debt topping $20 trillion. Some critics say President Donald Trump’s plan to cut taxes for corporations and some individuals will further balloon the debt, although conservative supporters say lower taxes will spur the economy so more money will come into federal coffers in the long run.

Georgia Republicans have debated, and passed, resolutions calling for a balanced federal budget for years. They do so while approving a state budget every year that is 29 percent to 30 percent funded by the federal government — providing funding for programs such as public health care for 1.8 million Georgians and school meals for hundreds of thousands of children.

The report comes at a time when Trump and lawmakers are looking at both federal spending cuts and the tax cuts.

“Given the importance of understanding the impact changes in federal tax policies have on the states, it was critical to examine what states already gave in taxes versus what they get back from the federal government,” said Jim Malatras, the president of the Rockefeller Institute of Government. “If some of the recent reports of potential tax reform proposals are true, many states, like New York, will face a double-whammy negative effect. These facts are important for policymakers to consider as any proposal moves forward.”

The Rockefeller Institute reviewed the $3.7 trillion the federal government spent in 2015, with an especially close eye on its home state, New York, where relatively high income meant it paid a ton of taxes.

Researchers looked at what each state received in direct payments, grants, contracts and wages: such as funding for Medicaid and university research grants, wages for federal employees in each state, and Social Security payments.

With few exceptions, poorer states came out ahead. So did many with older populations, or in the case of Georgia and Virginia, a combination of those factors and lots of federal workers (military and civilian) and research money at places such as Emory University, Georgia State University and Georgia Tech.

“Grants to support aid for the needy are concentrated disproportionately among higher poverty states and states with high spending on programs partially matched by the federal government, such as Medicaid,” the report said. “Direct payments for individuals under Social Security and Medicare are disproportionately concentrated in states with large elderly populations.

“Federal contracts are dominated by states with large defense-contracting sectors, and federal wages are disproportionately concentrated in states with a large federal employment presence, particularly those near the District of Columbia.”

In total, the report said, 37 states receive more in “federal outlay” than they pay in taxes. The rest pay more and get less.

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