NJ Fiscal Folly

Friday, February 10, 2006

NJ Subsidizes Arizona and Virginia

In 2003 (the latest available figures), NJ paid nearly $20 billion more in Federal taxes than it received in Federal spending, and ranked #50 among all states. In fact, since 1981, NJ has consistently ranked #49 or #50 in this category.

By contrast, Arizona received $10 billion more in Federal spending than Federal taxes paid, and Virginia received $35 billion more in the same year.

Some of the differences in state performance can be explained by factors such as the presence or absence of large retiree populations (think Social Security and Medicare payments), large numbers of Federal employees, or large numbers of military personnel or defense installations.

However, the fact remains that the State of NJ and NJ's Congressmen have done a lousy job in obtaining Federal funds for the state. This "balance of payments deficit" is a tremendous financial drain on the state.

There is also another responsible party, NJ voters who consistently vote Democratic.

Consider the situation from a Washington perspective. If you're a Washington Democrat, there's no reason to help NJ, because you know you'll always get the votes regardless. If you're a Washington Republican, there's no reason to help NJ, because you know you'll never get the votes, so why bother.

New Jersey's interests would be better served if NJ voters were less predictable and both parties actually had to compete for votes.

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