Phoenix, AZ-Citing a Harvard study and a Census Bureau report, Goldwater Institute economist Robert Franciosi offers a challenge to what he calls "the local mythology that Washington is shortchanging Arizona on federal pork."
According to a 2000 study done for the Taubman Center at Harvard University, Arizona has had a balance of payments surplus with the federal government since at least 1983. That is, Arizona has received more money from the federal government than it has sent to Washington in taxes. The latest estimate of Arizona's surplus is $904 per person in 1999. The highest surplus was $1,163 per person, in 1990; the lowest was $387 per person, in 1997.
Franciosi also points to the Census Bureau's Consolidated Federal Funds Report, which shows in absolute numbers that: 1) Arizona ranked 21st in the nation in the amount of federal spending within its borders; 2) with 1.8 percent of the nation's population, Arizona received 1.7 percent of the federal spending pie; 3) Washington sent $30 billion to Arizona in 2001, including salaries, grants, loans, Social Security, and procurement; 4) Arizona ranked sixth in the nation in the amount of loans received through the Federal Family Education Loan program; 5) the state ranked 15th in direct student loans; and, 6) Arizona ranked 16th in the nation in the grants received from the National Science Foundation.
Franciosi believes those data are important because money from Washington plays a significant role in local development strategies. Phoenix is seeking federal support for light rail; the Greater Phoenix Business Leadership Coalition wants Arizona to establish a permanent lobbying presence in Washington; and, state leaders hope to lure more federal science grants by creating the Arizona Bioscience and Biomedical Institute. In support of these strategies, proponents often argue that the state is not getting its fair share of the federal pie.
Franciosi cautions business and political leaders against relying on federal money to make Arizona grow. He cites the case of New Mexico, which has ranked number one in net federal largess for the past 18 years, but ranks 48th in personal income per person. Franciosi also cautions business and political leaders against obsessing over pork fairness. "The federal government takes hundreds of billions of dollars from taxpayers every year, takes a cut for itself, then makes the states fight to get some of the money back. That's the real fairness issue." Concludes Franciosi, "Arizona voters should support our legislators' efforts to keep our tax money here in the first place."