PROVIDENCE – Rhode Island was ranked No. 27 for best taxpayer return on investment in a WalletHub report Monday that ranked all 50 states in terms of total taxes paid per capita and the quality of government services received.
States with higher ranks paid the least in total taxes per capita yet received the best government services, which WalletHub evaluated across categories of education, health, safety, economy and infrastructure and pollution, using 25 metrics in total, such as graduation and unemployment rates, and average commute time.
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Rhode Islanders over 18 years old pay $3,878 in taxes per capita, ranking No. 33 in the nation for the lowest tax rate. WalletHub also ranked the state’s overall government services at No. 19.
Minnesota came in at the top of the government services list, followed by New Hampshire and Iowa. North Dakota was reported to have the highest total taxes while Alaska had the lowest.
But in terms of return on investments, states that pay little in taxes yet receive high quality government services came out on top, such as New Hampshire, Florida and South Dakota. How? Although federal income-tax rates are the same across the country, federal funds are unevenly distributed across the states. In fact, the WalletHub analysis found that blue states in the 2016 election tended to be less dependent on federal funds.
“It may seem reasonable to simply return the amount of discretionary spending to a state in proportion to federal taxes paid, a number of issues arise that simply make this impractical, or unreasonable, to do so,” said Robert Preuhs, associate professor of political science at Metropolitan State University of Denver in the report.
“If we simply allocated resources based on how much states pay in taxes, the federal budget essentially becomes a pass-through vehicle to return funds to the states and undermines the potential for more efficient distributions based on national priorities,” he added.
Rhode Island ranked on the bottom half of the list for its public high school graduation rate of 82.8 percent (ranked No. 31), and hospital beds per 1,000 residents — 2.2 (ranked No. 31). But it ranked better for fatalities per 100 million vehicle miles traveled — 0.57, ranking second. The Ocean State came in at the middle of the pack at No. 23 for share of residents living below the poverty line, at 8.2 percent.
Rhode Island and Massachusetts tied for WalletHub’s worst-ranked roads and bridges.
Rhode Island also ranked in the top 15 for lowest violent crime rate (No. 8), property crime rate (No. 11), highest parks and recreation spending per capita, (No. 11) and best water quality (No. 11).
Kate Talerico is a PBN contributing writer.
