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December 10, 2009

Maryland says thanks for the tax dollars, New Jersey

Paul West reports that earmark queen Barbara Mikulski and others of the Maryland congressional delegation have brought home the pork again. The new batch of spending is $100 million. That, West reports, "is on top of nearly $700 million in spending for Maryland projects that was requested by President Barack Obama in his 2010 budget."

Some of these projects are probably justified. Many assuredly are not. In any case, they mean more federal dollars showered on a state that is well accustomed to them but always wants more. Maryland has been basting in federal sauce ever since the Bush administration started to blow money in the name of homeland security after the September 2001 terrorist attacks. Total federal spending and obligations in Maryland in 2008 was a record of $77.9 billion, according to the Consolidated Federal Funds Report. That's up 60 percent in nominal dollars from the 2001 level. In a state economy of about $300 billion, $77.9 billion from Uncle Fed is real dough.

Much of this comes from taxes paid by New Jersey, Connecticut and other hapless places with high incomes that don't happen to be right next to D.C. Maryland sucked in $67 billion in federal spending in 2005 but paid only $49 billion in federal taxes, according to the Tax Foundation. New Jersey, on the other hand, paid out $86 billion in federal taxes that year but got back only $59 billion in federal spending. Thanks New Jersey!

Posted by Jay Hancock at 6:23 AM | | Comments (2)
Categories: Government & Business


That's OK. New Jersey taxes only exists because of its proximity to NY and Philly (to a lesser extent) anyway. Based on the current economic model, Washington is a modern growth engine much like NY was (is?).

What makes Maryland different from most states that receive more federal dollars than they pay is that Maryland is a blue state. Most states that get more fed bucks than they pay express their appreciation by voting Republican, and their residents rail against federal taxes and spending. As a rule, the better the federal deal for a state, the more the state hates the deal.

The best federal deals generally go to poorer states, and poorer states generally distrust federal government and vote Republican. Hardly any states of above-average income voted for George W. Bush.

I haven't meant to imply that Democrats spend more than Republicans. The difference is that Republicans complain while spending but Democrats enjoy it. The states that most need a national health plan generally are represented by the senators who complain most about it.

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About Jay Hancock
Jay Hancock has been a financial columnist for The Baltimore Sun since 2001. He has also been The Baltimore Sun's diplomatic correspondent in Washington and its chief economics writer. Before moving to Baltimore in 1994 he worked for The Virginian-Pilot of Norfolk and The Daily Press of Newport News.

His columns appear Tuesdays and Sundays.

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