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Montana ranks high in percentage for federal funds revenue
Montana ranks high in percentage for federal funds revenue
Phil Drake, pdrake@greatfallstribune.com 8:27 p.m. MST January 6, 2016
HELENA – Montana ranks sixth highest percentagewise when it comes to relying on federal special revenues as a source for state government nongeneral funds, according to a report released Wednesday by a nonpartisan tax research group.
The Treasure State counted on the federal government for 37.4 percent of its nongeneral fund revenue in fiscal year 2013, the Tax Foundation reported.
For at least one person, the news was not shocking.
“It’s not surprising,” said Bob Story, executive director of the Montana Taxpayers Association, a nonpartisan and nonprofit organization that seeks a tax climate competitive with other states. ... “Anyone who looks at the big picture can understand why Montana gets federal (funds) for many reasons,” Story, a former state lawmaker, said, listing Medicaid money, highway funds and education funding as some of those reasons.
Phil Drake, pdrake@greatfallstribune.com 8:27 p.m. MST January 6, 2016
HELENA – Montana ranks sixth highest percentagewise when it comes to relying on federal special revenues as a source for state government nongeneral funds, according to a report released Wednesday by a nonpartisan tax research group.
The Treasure State counted on the federal government for 37.4 percent of its nongeneral fund revenue in fiscal year 2013, the Tax Foundation reported.
For at least one person, the news was not shocking.
“It’s not surprising,” said Bob Story, executive director of the Montana Taxpayers Association, a nonpartisan and nonprofit organization that seeks a tax climate competitive with other states. ... “Anyone who looks at the big picture can understand why Montana gets federal (funds) for many reasons,” Story, a former state lawmaker, said, listing Medicaid money, highway funds and education funding as some of those reasons.
Wonkblog
Some of the most conservative states rely most on federal government aid
By Niraj Chokshi January 6
@NirajC
They staunchly oppose federal meddling, but conservative states are among the most reliant on federal funding for revenues.
Mississippi and Louisiana are the two neediest states, with federal aid accounting for 43 percent and 42 percent of their respective overall revenues in fiscal 2013, according to an analysis published Wednesday by the Tax Foundation, which advocates for policies that lower taxes and broaden the tax base.
Both Southern states also rank among the most conservative, according to Gallup's latest ranking: Mississippi was first, and Louisiana ranked third.
Which states rely most on federal aid. (Tax Foundation)
Some of the most conservative states rely most on federal government aid
By Niraj Chokshi January 6
@NirajC
They staunchly oppose federal meddling, but conservative states are among the most reliant on federal funding for revenues.
Mississippi and Louisiana are the two neediest states, with federal aid accounting for 43 percent and 42 percent of their respective overall revenues in fiscal 2013, according to an analysis published Wednesday by the Tax Foundation, which advocates for policies that lower taxes and broaden the tax base.
Both Southern states also rank among the most conservative, according to Gallup's latest ranking: Mississippi was first, and Louisiana ranked third.
Which states rely most on federal aid. (Tax Foundation)
Which States Rely the Most on Federal Aid?
January 06, 2016
By Jared Walczak
While state-levied taxes are the most evident source of state government revenues, and typically constitute the vast majority of each state’s general fund budget, it is important to bear in mind that they are not the only source. State governments also receive a significant amount of non-general fund revenue, most significantly in the form of federal governmental transfers. In Fiscal Year 2013, a full 30 percent of state revenues derived from federal grants-in-aid.
Such aid takes many forms. It includes federal Medicaid payments, education funding assistance, support for infrastructure projects, housing grants, and more. Federal grants-in-aid to state and local governments have reached $600 billion per year, with Medicaid by far the largest (and most rapidly growing) component. How much states receive in federal aid, and how reliant they are on such assistance, can vary widely.
Mississippi, for instance, relied on federal assistance for 42.9 percent of its revenue in FY 2013, the largest share in the country. Also on the high end are Louisiana (41.9 percent), Tennessee (39.5 percent), South Dakota (39.0 percent), and Missouri (38.2 percent). States with heavy reliance on federal grants-in-aid tend to have a combination of modest tax collections (reducing the denominator) and sizable low income populations (correlating with greater per capita reliance on Medicaid, housing assistance, and other low income and poverty relief programming, and with a greater share of federal education support).
On the other end of the spectrum are states like North Dakota (19.0 percent), Hawaii (21.5 percent), Alaska (22.4 percent), Virginia (22.9 percent), and Connecticut (23.4 percent). These states tend to have higher per capita tax collections (growing the denominator) and populations with lesser reliance on federal assistance (shrinking the numerator). Notably, although North Dakota and Alaska impose relatively modest taxes on residents, they are resource-rich states which export much of their tax burdens through severance taxes and thus experience some of the highest tax collections per capita in the nation.
January 06, 2016
By Jared Walczak
While state-levied taxes are the most evident source of state government revenues, and typically constitute the vast majority of each state’s general fund budget, it is important to bear in mind that they are not the only source. State governments also receive a significant amount of non-general fund revenue, most significantly in the form of federal governmental transfers. In Fiscal Year 2013, a full 30 percent of state revenues derived from federal grants-in-aid.
Such aid takes many forms. It includes federal Medicaid payments, education funding assistance, support for infrastructure projects, housing grants, and more. Federal grants-in-aid to state and local governments have reached $600 billion per year, with Medicaid by far the largest (and most rapidly growing) component. How much states receive in federal aid, and how reliant they are on such assistance, can vary widely.
Mississippi, for instance, relied on federal assistance for 42.9 percent of its revenue in FY 2013, the largest share in the country. Also on the high end are Louisiana (41.9 percent), Tennessee (39.5 percent), South Dakota (39.0 percent), and Missouri (38.2 percent). States with heavy reliance on federal grants-in-aid tend to have a combination of modest tax collections (reducing the denominator) and sizable low income populations (correlating with greater per capita reliance on Medicaid, housing assistance, and other low income and poverty relief programming, and with a greater share of federal education support).
On the other end of the spectrum are states like North Dakota (19.0 percent), Hawaii (21.5 percent), Alaska (22.4 percent), Virginia (22.9 percent), and Connecticut (23.4 percent). These states tend to have higher per capita tax collections (growing the denominator) and populations with lesser reliance on federal assistance (shrinking the numerator). Notably, although North Dakota and Alaska impose relatively modest taxes on residents, they are resource-rich states which export much of their tax burdens through severance taxes and thus experience some of the highest tax collections per capita in the nation.
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There are two major factors which would explain this...
And notice
Which has a financial offset for states with nontaxable public lands...
"Payments in Lieu of Taxes" (PILT) are Federal payments to local governments that help offset losses in property taxes due to non-taxable Federal lands within their boundaries. The key law is Public Law 94-565, dated October 20, 1976. This law was rewritten and amended by Public Law 97-258 on September 13, 1982 and codified as Chapter 69, Title 31 of the United States Code. The law recognizes the inability of local governments to collect property taxes on Federally-owned land can create a financial impact.
PILT payments help local governments carry out such vital services as firefighting and police protection, construction of public schools and roads, and search-and-rescue operations. The payments are made annually for tax-exempt Federal lands administered by the Bureau of Land Management, the National Park Service, the U.S. Fish and Wildlife Service (all agencies of the Interior Department), the U.S. Forest Service (part of the U.S. Department of Agriculture), and for Federal water projects and some military installations. PILT payments are one of the ways the Federal Government can fulfill its role of being a good neighbor to local communities.
The Department of the Interior's (DOI) Office of the Secretary has administrative authority over the PILT program. In addition to other responsibilities, DOI calculates payments according to the formulas established by law and distributes the available funds. Applicable DOI regulations pertaining to the PILT program were published as a final rule in the Federal Register on December 7, 2004.
The formula used to compute the payments is contained in the PILT Act and is based on population, receipt sharing payments, and the amount of Federal land within an affected county. PILT payments are in addition to other Federal revenues (such as oil and gas leasing, livestock grazing, and timber harvesting) the Federal Government transfers to the States. The DOI has distributed more than $7.1 billion dollars in PILT payments to States (except Rhode Island) and the District of Columbia, Puerto Rico, Guam, and the Virgin Islands since these payments began in 1977.
Details at link
https://www.doi.gov/pilt
