I’ve been leaving intemperate comments here and there regarding the infamous donor/beneficiary map, which reveals that a lot of red states actually get more in federal funding than they put it. This is my more temperate response to that. At least I’m going to try. It’s hard, because this map really pushes my buttons. It is used to supposedly demonstrate that the federal government favors the rural states (often used in conjunction with “See what the Senate has wrought?!”) and, by implication, that residents of the red states ought to know their place and be appreciative or otherwise be hypocrites. The use of the map is not to launch a discussion on how we spend our money or where, but instead treats this money as though it is entitlements or welfare. At best, it’s a cheap shot often made by those I expect better from. At worst, it’s demagoguery or something bordering on it: Making people different from you or that you don’t approve of into Bad People or the subject of resentment.
I am going to be focusing on a few states here. I didn’t cherry-pick them, nor are they a random sampling. They are simply states I know quite a bit about for one reason or another.
Before I start getting into some of the specifics, what we have to keep in mind is that because more money is being spent in one state compared to another, it doesn’t meant that a check is being written to the residents of said state. We simply can’t treat entire states as sponges because a lot of the money is (a) going to very specific things and people, (b) payment for services rendered or materials exploited, (c) money they would have gotten but for the federal government’s (often benign) intervention, or (d) extra costs associated with giving that state the same services as the others.
To take some broad examples, when the government owns a substantial portion of the land of a state, that state is inherently have some money spent there on upkeep, exploitation, and so on. We keep our national parks not just for their benefit, but for ours and because we like to consider ourselves the kind of people that preserve nature. The nuclear silos in the Dakota are there because we want them to be away from other things and are not specifically a gift to all Dakotans. Per capita, it costs more to build roads from one side of Montana to the other than Illinois, but we’re not giving Montanans something special that other states don’t have. The same goes for mail service, energy, and so on.
If you want to make the argument that these states shouldn’t have them unless they can pay for them with their own tax dollars, go ahead. Libertarian-leaning Brandon Berg made that exact argument when I brought the subject up a while back. There are also environmental arguments that we should evacuate these places and let Mother Nature have them. But whether we want to go down these (dirt, gravelly) roads or not, we do have to remember that at least in these respects they are not getting anything the rest of America isn’t.
Rather than looking at the map and making cheap assumptions about who is pulling their weight and who isn’t, I think we should investigate why they are receiving this money. Is it because the Senate stacks the deck in favor of these states? Are they getting more money for education, health care, and so on? Is it that they are the landing pads for retirees? The answer is that it’s more complicated than that.
I mentioned Wyoming in a post the other day. Creon Critic mentions Wyoming as (a) a state that receives more money than it puts into the federal till and (b) the #2 state when it comes to federal grants.
So why is Wyoming getting this federal grant money? Well, it’s not health care, which per-capita Wyoming gets substantially less than New York. It’s not education, which is in line with other states. You have to drill down pretty deep to find out where it’s coming from. The answer: the Department of the Interior. Yellow Stone National Park. The Grand Teton. The Wind River Indian Reservation. The whopping 42% of the state that the federal government owns.
Wyoming has onerous property taxes. They can’t collect 40% of the property taxes within their state because it’s owned by the federal government. So the government gives them something called a PILT (Payment in Lieu of Taxes). The PILT is actually a pittance of what they might be collecting in property taxes. State and local governments pull in over $1,000,000,000 in property taxes. The federal government paid the state about $25m, or 2% of what they collect for the remaining 60% of the state. Lest we think that but for the federal government nobody would own the land anyway, consider how much the state could reap on property taxes on more homes in Jackson or just outside Yellowstone or on Yellowstone. That $25m is not exactly generosity, but the beneficiary/donor map treats it as such.
But the really big part of Wyoming’s grants are related to the Minerals Leasing Act. The MLA dictates that roughly half of royalties from mineral exploitation of their state goes back to their state. Most of the rest goes towards land management (“National Reclamation”) to keep the land inhabitable. Both of these count as “gifts” to Wyoming, but it’s based on money that Wyoming generates. And it’s something that Wyoming is paying a steep price for, ecologically. They’re paying for that money with their land and their lungs.
Despite all of this, Wyoming only “gets back” an eleven extra cents on every dollar it sends to Washington (much of it going towards management of its parks, management of the lands the federal government owns, and management of the reservation).
When you look at Montana and Idaho, you see some real similarities. Both receive (numerically) a lot of PILT money because the federal government owns 30% and over 50% of these rather large states, though it’s not an exceptionally generous amount when you consider the foregone property taxes. Both have military bases. Is this a giveaway to undeserving states, or is it perhaps helpful to have military bases in the wide open west? Either way, it counts as welfare according to the map. So, too, does the nuclear laboratory that we would probably prefer be in Idaho rather than on the East Coast.
Both Idaho and Montana also have Indian Reservations. The IHS spends $200,000,000 for the benefit of the tribes in Montana and another $100,000,000 is spent by the Bureau of Indian Affairs. The numbers are lower in Idaho, but we’re still talking north of $50m. Near the top of the list of beneficiary states are Arizona and New Mexico. This might be related to the Navajo Nation and the two billion dollars we spend in the former and nearly a billion in the latter. I’m not begrudging the tribes on this spending, but neither should we begrudge the general citizenry of Arizona, New Mexico, Oklahoma, Montana, and Idaho.
Idaho has a series of national forests right smack in the middle of the state. This wilderness is federally protected, so they are foregoing logging jobs that they might otherwise have. They’re limited in what they can do with that land as well. And the efforts are preservation essentially cut one state into two or three (to get from Idaho Falls to Sandpoint, you’re going to have to drive through Montana which drives around the national park as best it can). And, of course, they’re not collecting property taxes.
I should add to this that Idaho, because it doesn’t have the natural resources that the other states do, actually gets less per capita than the average state (Montana gets more, especially in Grants – see above – and Retirement and Disability, given that it’s a retirement place and a leading contributor to the military). They’re a beneficiary state in large part because they collectively lack income. Now ordinarily, many of the self-same people that under any other circumstances would be reticent about begrudging people that are struggling the federal money they receive, in this instance it is okay because Idaho is one of the reddest states in the country.
Nevermind that one of the main reasons that Idaho is so red is because of its substantial Mormon population and like wealthy liberals believe that there is more at stake than their immediate pocketbook issues. Nevermind that there are some people in these states that are not white and not Republican. Nevermind that the complexities involve simply cannot be shown on a simple map. Nevermind all that. Haha. Gotcha! Freeloaders.