Liberals’ best justification for big government begins and ends with the services the state provides. Perhaps you don’t like paying taxes at such high rates, they argue, but consider that you might actually be getting a much better deal if all that extra cash helps government do its job well. And even if you don’t personally benefit at a level commensurate to what you are personally paying, at least your state does as a whole.
This is the argument, anyway. So here’s a chance to test it — a new survey of state-level taxes and services, put together by five university professors at different state colleges.
Are residents of New York and California just fleeing great government services? Or could it be that there’s actually a rationale to their voting with their feet? According to the study, published by WalletHub, New Yorkers get the 44th best return on investment for their tax dollars. That’s because residents rank eighth-worst in taxes paid, despite getting slightly above average (19th best in the nation) services. Californians, in contrast, suffer the worst of both worlds. Their government services rank 37th out of 50 states, and they get the 49th best return on their exorbitant tax bills.
The study takes into account various state taxes, not just income taxes, and weighs taxes according to the amount paid per adult resident. As for services, it measures education, healthcare, violent crime, water quality, poverty, and infrastructure.
In this ranking, several blue states get credit for top-notch services. For example, the top three states for government services are Minnesota, Vermont, and Virginia, in that order. This is a survey in which (for example) Massachusetts actually gets credit for its high-performing school systems. High-tax Maryland’s public services are scored as the nation’s 10th best, propelling the state to an overall rank of 29 in terms of ROI. And some of the worst states for public services are (at least as of the last 15 years) Republican states, such as Louisiana, Alabama, and South Carolina.
These costs and benefits, like everything else, represent trade-offs. Some states are just cheap to live in, and there’s an appeal to that for many people. Fast-growing Tennessee’s low taxes (fourth lowest in the nation per capita) might make it worthwhile to tough out its 41st-in-the-nation government services. But some states are able to do a lot more with your tax dollars than others. This includes several states (such as Utah, Nebraska, and Iowa) known for quality services and several others (such as no-income-tax Florida, New Hampshire, and Texas, and South Dakota) that charge far less for services that are still better than those of high-tax states such as California, Oregon, and New Mexico.
In the middle, there is also a lot of diversity. For example, fast-growing Colorado, Idaho, and Montana continue to deliver roughly average services with below-average tax burdens.
Wisconsin is fresh off the Scott Walker-era reforms that freed up millions for state and local government to deliver services instead of appeasing public sector labor unions. The Badger State now has the sixth-best services in the nation and ranks 14th for best return on investment, despite its above-average tax bill (33rd).
The overall picture makes badly run one-party states such as New York and California look worse than ever. The lesson is that if your state is going to charge so much in taxes, it had better have something special to offer in return.
