North Dakota ranks low in report on taxpayer return on investment
(The Center Square) – North Dakota ranked 48th overall in a report analyzing the return on investment for state taxpayers.
Personal finance website WalletHub determined the rankings through a comparison of what residents pay in state and local taxes and the quality of government services they receive. Key government services such as education, health, safety, economy and infrastructure and pollution were used as indicators in the report.
Despite landing near the bottom of the list, the state performed better for its quality of services offered to residents. It came in first in infrastructure and pollution. The state was 14th in health services, 23rd in safety and 27th in education system, and the state’s economy ranked 18th.
Gov. Doug Burgum acknowledged positive economic growth in the state during a news conference earlier this month with well over 30,000 available jobs, but he said growth was being held back by a lagging workforce.
Burgum announced a $15 million allocation in American Rescue Plan funds for a workforce development program in the state to address this issue.
One of the goals of the WalletHub report was to determine whether the amount of taxes residents paid correlated with better or worse government services.
“Different states have dramatically different tax burdens,” the report’s authors wrote. “This begs the question of whether people in high-tax states receive superior government services. Likewise, are low-tax states more efficient or do they receive low-quality services? In short, where do taxpayers get the most and least bang for their buck?”
North Dakota ranked 50th for taxes paid per capita. Thanks to legislation passed last fall, residents will receive a tax relief income credit this year up to $350 for full-year residents and up to $700 for full-year residents who are married and filing jointly.
In general, red states were reported to have higher taxpayer return on investment than blue states, according to the report. Among the top 10 were New Hampshire, Florida, South Dakota, Georgia, Virginia and Missouri.
New Mexico and Hawaii ranked 49th and 50th, respectively, for overall taxpayer return on investment.
“Ultimately, the efficient use of tax revenue means that a government is spending tax dollars on things their constituents value more than the marginal dollar they pay in taxes,” said Daniel Garrett, assistant professor of finance at the University of Pennsylvania’s Wharton School.
The best use of tax dollars varies greatly across different states because population differences and values, Garrett said.
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