Question of the Month
November
2001
What kind of return do
Midwestern states get on tax payments that their residents send to the
federal government?
At the 2001
Midwestern Legislative Conference’s Annual Meeting, Matt Kane of the
Northeast-Midwest Institute — an organization that tracks the flow
of federal dollars — presented his findings to attendees. The flow
of federal money to states in the more populous, eastern part of the
region does not meet the amount of tax dollars sent to Washington,
D.C.
Illinois
has the most dramatic disparity, receiving 74 cents for every dollar
of its federal tax burden. In an attempt to improve its numbers, the
state created in 1999 the Illinois Federal Clearinghouse, which
provides online information on federal grant and procurement
opportunities for government and business leaders along with nonprofit
organizations. Kane says five states in this region — Iowa,
Kansas, Nebraska, North Dakota
and South Dakota — receive a larger flow of money from
the federal government than what they send in tax dollars to
Washington.
According to Kane, the
differences are partly explained by demographics. States with higher
incomes, less poverty, and fewer old and sick people tend to receive
less money back from the federal government. But he also argues that
there is room for improvement. Kane suggests that policymakers pay
particular attention to formula factors for spending on grants and
that they push for the procurement of federal money on important state
and regional issues. U.S. population trends could make Midwestern
attempts to secure a larger share of federal expenditures even more
difficult. This region is expected to have fewer U.S. congressional
seats in the future — and potentially less political clout.
For
more information on this or any other public policy issue, please call
630-925-1922 or complete the online
form for research services.
Return
to Question of the Month
For more information, contact:
CSG Midwest
