Posted on 02/12/2005 7:56:43 PM PST by NormsRevenge
WASHINGTON -- California's taxpayers have gotten shortchanged by the federal government for the 18th consecutive year -- and by a growing margin, a study released Friday shows.
The report by the California Institute, a Washington-based think tank, found that Californians paid $235 billion in federal taxes during 2003 -- about $50 billion more than they got back in grants, contracts and other federal programs.
That amounts to a 79-cent return for every tax dollar Californians send to the feds -- and 2 cents less than in 2002, according to recently released figures from the IRS.
The California Institute had previously reported that California got back 77 cents on the dollar during 2002, based on available data, but it revised the figure based on new Internal Revenue Service data.
"California is, and has been for almost 20 years, a donor state. It helps to subsidize the rest of the country," institute Executive Director Tim Ransdell said. "California has done its duty -- and then some -- for almost two decades."
The study comes as Gov. Arnold Schwarzenegger prepares to travel to Washington, D.C., where he will rally California's congressional delegation and press Capitol Hill leaders for money.
Democrats are widely expected to wield the study as evidence that California Republicans who hold powerful chairmanships have failed to deliver for the state and that Schwarzenegger must become the "Collectinator" he has promised to be.
According to the study, California ranked 45th out of the 50 states, plus the District of Columbia.
New Jersey fared the worst, receiving 58 cents back on the dollar, while New Mexico gets $2 in return for every dollar paid to the feds.
"The governor is going to have to use some of that famous muscle of his," said Rep. Adam Schiff, D-Pasadena. "If he wants to be the 'Collectinator,' now is the time.
"We have all the numbers, we have the chairs of the relevant committees and we have the governor. If that's not enough to get the job done, then the GOP is going to have some explaining to do," Schiff said.
But Republicans and state officials said California's low rate of return should not be confused with its need for more transportation funding, reimbursement for the costs of illegal immigration or protection of its remaining military bases.
Much of the imbalance, state Deputy Finance Director H.D. Palmer said, stems from the fact that nearly half of all federal expenditures come from Social Security, disability and retirement payments to individual recipients. And California is a relatively young and wealthy state.
According to the U.S. Census Bureau, 10.6 percent of Californians were 65 or older in 2003. That's compared with 12.4 percent of all U.S. residents that age, making California the state with the sixth-lowest percentage of population over the age of 65.
That keeps the state's Medicaid expenses below the national average. Direct payments in California rose only slightly over the past three years, from $91 billion to $111 billion.
"The fact that we've got a younger population that's working as opposed to an older population that's retired means that we have a more productive economy that's generating more for California," Palmer said.
And from 2002-03, California's share of federal procurement spending declined from 13.7 percent to 12.6 percent.
"We always get the short end," said Rep. Howard P. "Buck" McKeon, R-Santa Clarita, a leading member of the House Armed Services Committee.
California's share of defense procurement dollars, which averaged 18 percent during President Reagan's 1982-86 peacetime arms buildup, stood at about 14.2 percent in 2003, according to the study.
In 2003, California's share of procurement was $37 billion, up from $35 billion the year before.
"You're not seeing the kind of investment in defense dollars as you did in the '60s and '70s and '80s," Palmer said. The Pentagon, he said, "is not as heavily focused on procurement as they have been in the past."
Locally, the study found, Los Angeles County got back $57 billion, or about $5,728 per person. That amounted to more than 25 percent of the state total, but was below the per-capita average for the state of $6,912.
Per-capita spending in San Bernardino County was $4,105.
Rep. Jerry Lewis, R-Redlands, the new chairman of the House Appropriations Committee, has urged the White House to re-examine federal formulas for mandatory spending programs that Californians have long felt are inequitable, said his spokesman Jim Specht.
He noted that even in Lewis' powerful new position, the chairman still must grapple with Senate decisions that might run counter to California. The Senate, for example, often slashes reimbursement to states for the costs of incarcerating illegal immigration.
But, he said, the imbalance of payments "is one thing every member of the delegation feels needs to be improved on. Congressman Lewis has promised to do what he can in his new job to make sure California gets its fair share."
According to the study, California ranked 45th out of the 50 states, plus the District of Columbia.
New Jersey fared the worst, receiving 58 cents back on the dollar, while New Mexico gets $2 in return for every dollar paid to the feds.
But, but, but, some politicians are calling the Federal Budget "austere." I can't imagine for a moment that California would be "shortchanged."
Remove the SS money from this picture to remove the affect of 'snowbirds' moving to inexpensive places and you get a more realistic picture (the fact that SS is a transfer tax from the young and relatively poor to the old and rich is another question entirely).
CA would still be a doner, but the statistics would be less impressive.
But I thought Jane Fonda and her friends love to pay hight tax rates.
the fed .gov is picking everyone's pockets.
Surely this scumbag, Schiff, realizes that California has voted against Bush twice?
And that California keeps sending a couple of scumbag Senators back to Washington to vote against GOP initiatives and berate Bush's nominees? Whatever money gets sent back to California better stay in Republican districts....
90% of statistics posted on the 'net are simply made up.
Yeah, I thought the "Progressives" would LOVE this, wouldn't they? After all, Washington DC is just "taxing the rich" as far as states are concerned, & California is a rich state, not a poor state like New Mexico or Mississippi.
The feds are doing just what that bank robber said: they are going "to where the money is". Sounds only fair, doesn't it?
They want to keep more of their money? Quit sending it to Washington DC and quit electing creatures that like to raise taxes.
They ripped up the constitution a long time and only use the parts they like . Rights are an illusion.
AMEN TO THAT!!!! Rarely do I hear my other FReepers mention this fact as succinctly as you did...but then again, many of these same unconstitutional federal programs go to help them out personally (or their state or Congressional District), so that is why this issue is swept under the rug like it is.
Few people here have the guts to call it like it is, so I appreciate you for pointing this out.
Same here. I thought that they wanted the rich to may more of a percentage than they have under Bush. Since the median price of a home in Claifornia is $465,540 and the median price of a home in New Mexico is $129,400 and in Mississippi $95,600, California is clearly the richer state by far. Why shouldn't they pay more?
Remove the SS money from this picture to remove the affect of 'snowbirds' moving to inexpensive places and you get a more realistic picture (the fact that SS is a transfer tax from the young and relatively poor to the old and rich is another question entirely).
Good of you to catch the SS angle. Another thing that I bet is wrong with this study is that it is per capita and does not take into consideration the "overhead" of the Federal government, which is going to fall more on less populated states (more interstates and military bases per capita). Remove that, an I am not at all sure that California is a "doner" state.
Only in someone's dreams would states get back all the money that they send to Washington. What do you think pays for all the DC bureaucrats and those fancy buildings they work in? It has to be skimmed off from the money they get. The states only get back what's left. Which is yet another good argument for cutting taxes and letting the citizens of the states keep the money in the first place. If CA wants 100% of its tax dollars to go to CA purposes, don't send it thru DC, tax it here (where it's also a lot more convenient for me to wrap my hands around a local politician's neck for raising my taxes).
I looked through 25 lists of think tanks based in and around washington and none List anything called the California institute. is this a made up study to inflame the mistreated califas.
If every state got back a dollar for every dollar it sent to Washington for taxes, what would be the point of taxes (which is my point).
Eliminate "revenue sharing" !!
So what's the real purpose of the study anyway? To provide lazy CA legislators and a RINO Govenor an excuse not to control spending or tackle the issues. So they go to Washington with hat in hand, letting all the problems that plague CA mushroom.
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