PRINCETON PACKET EDITORIAL
Every year around this time, the federal government issues a report describing how many of your tax dollars are being returned to your state of residence.
And every year around this time, politicians in New Jersey use the occasion to deliver empty promises about how they’re going to transform the Garden State from a donor to a recipient of federal dollars.
It’s unfortunate that this report comes out in October — the height of the political silly season back in the states. Candidates will promise almost anything at this time of year. And with all 120 seats in the New Jersey Legislature up for grabs in a couple of weeks, every Senate and Assembly hopeful now has a Robin Hood agenda for robbing from the rich federal treasury to help the poor New Jersey taxpayer.
There’s just one thing wrong with this equation. New Jersey taxpayers aren’t poor. In fact, New Jersey is always at or near the top of the list of states that get the least amount of money back from Washington precisely because New Jersey taxpayers are, on a per-capita basis, always among the richest in the country.
This year is no exception. In its analysis of 2005 federal spending, the Washington-based Tax Foundation reports that New Jersey got back 61 cents out of every dollar its residents sent to Washington. The Garden State is joined at the bottom of the list by Nevada (65 cents), Connecticut (69 cents), New Hampshire (71 cents) and Minnesota (72 cents).
On the receiving end, New Mexico got back $2.03 for every dollar its residents contributed to federal coffers, followed closely by Mississippi ($2.01). Rounding out the top five were Alaska ($1.84), Louisiana ($1.78) and West Virginia ($1.76).
It’s no coincidence that, by and large, the states getting the smallest pieces of the federal pie are among the nation’s wealthiest, while those receiving the most are among the poorest. (The noteworthy exception, Alaska, is both a wealthy state and a beneficiary of federal spending, primarily because of vast federal landholdings and generous subsidies for its widely dispersed population.)
What separates the winners from the losers in the race for federal dollars has less to do with where the federal government spends its money than where it raises it. True, New Mexico gets some big bucks from Washington because large chunks of its land are taken up by Navajo and Apache reservations (not to mention the Los Alamos National Laboratory) — but that’s not the primary reason. New Mexico also ranks 46th in per-capita personal income. And three of the four states it trails (Mississippi, Louisiana and West Virginia) are also on the list of the top recipients of federal dollars.
That’s worth keeping in mind as politicians here in New Jersey make bold assertions about how they’re going to bring home the bacon after they’re elected. New Jersey’s ranking won’t be altered by petitioning Washington for more research grants or re-opening Fort Monmouth. Even the aging of our population, bringing more money back in the form of Social Security and Medicare benefits, won’t catapult New Jersey ahead of other states in the race for a bigger share of the federal dollar.
The only thing that could significantly change New Jersey’s standing in that race would be a dramatic decline in the state’s per-capita income — a condition we seriously doubt all those pandering politicians would countenance. They — and we — would be wise in this matter to heed a sage piece of advice: Be careful what we wish for. It might come true.
