Sending back federal money seems unlikely

One of the sidelight issues in the current campaign for governor has become Paul LePage's belief, stated several times now, that the state should only receive back from the federal government an amount equal to what it contributes.

That may be a noble thought, but it seems impractical and would likely deprive the state and its residents of millions of dollars.

"I believe that the state of Maine is entitled only to the federal dollars that are the moneys that come out of Maine and go into federal coffers," LePage told an interviewer in August.

According to The Tax Foundation, a nonprofit research group based in Washington, D.C., some states benefit way more from federal taxing and spending policies than others.

"Some 'beneficiary' states receive a positive return from Uncle Sam, making other states 'donors' who pick up the tab."

And, as you might have guessed, Maine is a beneficiary state, not a donor.

In fact, according to The Tax Foundation, we received about $1.41 back from Washington for every dollar we sent.

That was in 2005, the last time The Tax Foundation ran the numbers. With the federal stimulus money that has poured into Maine over the past year and, with incomes stagnant or falling, that number is now probably much higher.

But we are still far down the list (number 13) of beneficiary states.

New Mexico and Mississippi got about $2 back for every one they sent to Washington in 2005.

The ruggedly independent and government-despising folks of Alaska were next on the list, getting back $1.84 for every dollar they sent to Washington.

Louisiana, West Virginia, North Dakota, Alabama, South Dakota, Kentucky, Virginia, Montana and Hawaii all received more back than Maine, per dollar sent.

So, which states end up picking up the tab?

New Jersey, Nevada and Connecticut only get about 60 cents on the dollar sent to Washington.

New Hampshire, Minnesota, Illinois, Delaware, California and New York all get between 71 and 79 cents returned.

In total, 17 states pay more than they get back, while 32 receive more. Tiny Rhode Island comes out exactly even — a dollar sent for a dollar returned.

But why?

There are a variety of factors, according to the Foundation.

First, some states have wealthier residents and they simply pay more tax on that wealth.

For instance, in 2009, Maryland had an average family income of about $69,000. In Maine, meanwhile, it was about $46,000. In Mississippi, about $36,600.

Other factors that determine how much a state gets: having powerful members of Congress, the number of federal employees in a state and, a big one, the number of poor and elderly people.

So Maine, with relatively low household income, pays less. And Maine, with its extremely high number of residents over 65 (about 15 percent, nearly twice as high as Utah, the youngest state) receives more.

It's difficult to see where Maine would logically turn off the tap of federal money. Turn down Medicaid or Medicare payments for hospitals? Send back educational dollars intended for schools? Refuse unemployment compensation?

Again, there may be better ways to tax and spend. But a total transformation of the federal/state relationship is probably beyond the scope of even the most determined governor.

editorialboard@sunjournal.com

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Displaying comments, from newest to oldest

Fred C's picture

Lepage's overwhelming ignorance

of the basic foundations of governance is frightening.

Maine has the oldest population of all states in the nation. Does Lepage really think we should rip the social security checks out of senior citizens' hands and return them? Or perhaps does he think we should deny them federal funded medicare? Maybe the federal funded food stamps and meals for our seniors should be stopped at the border and sent back?

If you look carefully at the budget for the city of Waterville while Lepage was mayor you will find a LOT of state and federal money flowing in there to help balance the city budget. In fact Waterville is easily one of those places generally getting MORE state and federal money back than paid in.

Why didn't Lepage send that money back?

Woody's picture
verified

It's simple

Let's send our money to Louisiana, West Virginia, North Dakota, Alabama, South Dakota, Kentucky, Virginia, Montana and Hawaii.

dxs0ttq's picture

Major recession? Haven't you

Major recession? Haven't you heard, The US recession that began in December 2007 ended in June 2009, according to the National Bureau of Economic Research. But then again facts never got in your way before.

Pirate's picture
verified

So the s***storm from 2009 to

So the s***storm from 2009 to now is owned by........you guessed it; BARRY oBAMa!!!!

CommonSense's picture

That would be according to

That would be according to the Obama Dream as in Fantasy Generating Team

jmyoung's picture
verified

I agree with Mayor LePage.

I agree with Mayor LePage. Getting the Feds off our back is not going to be "instant" as is inferred in this article, it's going to be a process. The sooner we start the sooner it will get done. Then we can be responsible for our own state w/o being subject to the violent swings in party politics from Washington. We take care of our own. And in that way, we can all tell them to GO TO H.......! The first step is to fix the giant money vacuum in Augusta. Stop the spending.

CommonSense's picture

Voisine when you read this apoligize to Candiceanne

Voisine, when you read this, be the big man and apoligize to candiceanne for attacking her when she brought up the information she had. She couldn't give you a "link" because her information didn't come from a website. Not everyone gets there information from websites anymore than they get it from FOX news contrary to some people's beliefs here. Candiceanne had the number at $1.79 returned to Maine currently, this site only goes to 2005 at $1.41, given the changes over the past 5 years and in particular all that Obama has been sending her numbers are probably even low now. The crux of the matter is she is very right, we are getting back a whole lot more than we are paying in.

veritas's picture
verified

BS..... candiceanne is averse to referencing her 'claims'

BTDT and it's useless to argue the point with her.

Mike Peters's picture
verified

This is why we are in this mess...

Politicians have been playing this game for years. The Feds send us money, always with strings attached, and make us dependent on the dole. This is how the feds manipulate social, economic, educational, or any other policy they wish to dictate. Example. If they want more cops, they give us grant money to seed them for three years until we are addicted. After the three years, the argument for keeping them is that the State, city, county, or town cannot get by without them. If they want certain things taught in schools to reflect their own view of social policy, they inject money with the caveat that these things be taught. When the fed money dries up, the State is stuck with the programs and must increase the budget. The State and the pols have been doing this crap for years here in Maine. They mandate and only fund when the mandate is complied with in full. This takes away local control and forces the towns and cities to teach certain subject matter and to teach it in the way the State dictates. It also makes everyone dependent on the government above for money. If LePage wants to end this scheme which is enslaving our people and driving us to economic and social ruin, then he must at least attempt to stand up to the dictators in Washington and say no. Saying no may get him in trouble and be painful at first, but we must start somewhere. The alternative is total submission and lack of local control. When LePage jokingly said he would tell Obama to " go to hell over and over again, " I believe this is what he meant. LePage's problem is English. French is his first language, and English is a learned language. That is how things were in Lewiston in the 50's and 60's. LePage needs a French to English handler/translator. That aside, he is correct in not wanting to take fed money with strings, and he is correct in telling Obama, in any language, enough is enough.

Pirate's picture
verified

Well stated, Jim

Well stated, Jim

WideStanceRepublican's picture

Lepage is ledumb

Are all republicans this stone stupid? We are in a major recession and this idiot wants to send money back to Washington? Let me guess - his MBA is from an "online" university where he paid $24.99 to get it.

How is someone this stupid even being taken seriously as a candidate?

jojones80's picture

You can't fault the man his

You can't fault the man his achievements. But he doesn't have the cut for governor; he doesn't handle stress well, and is a poor communicator. Can't have someone like that steering the ship and expect to live through a storm.
'

rdarluv's picture
verified

you can see it....

@ Gary52, that side of the equation actually jumped right out at me while reading the SJ editorial........it's a no-brainer!

@XYZ, be carefull what you call him out on! An MBA is a verifiable document!! Instead of calling him a liar, why don't you do your civic duty and verify it??

Gary52's picture
verified

The democrats have been

The democrats have been "farming" federal money by promoting welfare in this state for years, that's why one in three Maine households gets some type of assistance. We need to start being more business friendly and "farm" for jobs, instead of making Maine a mecca for people looking to feed off of public assistance. More jobs will equal less public assistance, and combined with welfare reform that puts a stop to migrant welfare seekers that come here because we never say no, our reliance on excess federal funds would be reduced, while our standard of living would improve. I think that's the message Lepage was sending. It's not really a complicated message, either, so I'm surprised the SJ didn't get it...or did they?

Ajax's picture

Facts about "welfare"

Gary, Maine is no mecca for people looking to "feed off public assistance". This is an urban myth.

Check this out. http://www.mejp.org/PDF/safety_net.pdf

Pirate's picture
verified

I think the real myth is that

I think the real myth is that Maine ISN'T a welfare mecca. Just look around, they're everywhere.

jojones80's picture

When I lost my job a few

When I lost my job a few years back, I found out that I could qualify for heating assistance, despite the fact that I had adequate money in my bank account. I also got a letter from Mainecare notifying me that I would qualify for assistance for covering prescription medications. I didn't sign up for these programs because even though I wasn't making a lot of money at first, I had plenty to live on. I didn't need the help, really. It just shows how the welfare system is too generous in some instances.

xyz's picture

Lepage supposedly has an MBA...

where did he get if from Glenice Beck University? Of course it was just another lie, he tells so many he can't figure out what is the truth and what isn't. Is anyone keeping track of the count of lies this idiot has come up with, I can think of numerous ones including the "buffalo count". Short tempered, liar, bully, chickenhawk, and tax cheat yep he's a republican alright.

Pirate's picture
verified

Who's your candidate of

Who's your candidate of choice, xyz?

Old Bill's picture

I would be surprised if he

I would be surprised if he votes for anyone but Mitchell. :-(

Pirate's picture
verified

I'll be even more surprised

I'll be even more surprised if a get a respectful response.

rdarluv's picture
verified

It's simple math SJ....

You said it yourself......increase the average salary of Mainers and we will require less federal monies. How do you do that?? Well, you start by bringing good jobs to Maine!! If the state puts US in a better financial position, the result will be less federal funds needed. Why did you miss that side of the equation in your response?? Is it because you didn't expect your readers to catch it? Believe me, they will!!

CommonSense's picture

Maine people have to stop

Maine people have to stop rejecting jobs and revenue sources too. That means voting yes on the casino question. It also means we develop wind turbines. No there are not a lot of jobs in wind turbines once they are built but there are roads to be built and turbines to be built. They can also generate tax dollars. I know the nay says will say they take tax money don't pay but, it doesn't have to be that way. We do not have to give the TIFFs. If they aren't willing to come in and pay taxes don't come someone else will. if they are willing to pay great. We should have noise rules and such but not discriminitory as is being done that specifies wind power. They should apply to all activites and business. If everyone knows upfront what to expect they will be more inclined to come. Other places don't make up the rules as they go along.

Old Bill's picture

I must respectfully disagree.

I must respectfully disagree. Few, if any businesses would be willing to locate to Maine without having some tax incentive. That's just the nature of the beast.

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