The Best and Worst Ways States Use Your Tax Dollars
Is the government wasting your tax dollars?
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All of us have asked this question at one point: “How are my taxes spent?” If you can answer that question, you’re ahead of the curve.
States have different priorities when it comes to how state taxes are spent. Some projects have been winners, benefiting thousands of people. Other projects have not produced great results.
Need examples? Click through to see how your tax dollars are spent.
Good Use: Children’s Health Insurance Program (All States)
Nearly 9 million children across the nation have access to health insurance under the Children’s Health Insurance Program, or CHIP. In fiscal year 2016, the program received more than $14.45 billion in federal money and $1.17 billion from the states. California, New York, Texas, Massachusetts and Illinois had the highest expenditures in the program — and some of these states have the highest healthcare costs in the country.
Good Use: Washington, D.C.’s Dulles Corridor Metrorail Project
The Dulles Corridor Metrorail Project is a 23-mile extension of the Metrorail system in Washington, D.C. It will add 11 stations east and west of the city’s downtown. The project budget is $5.76 billion.
The rail will extend to the Washington Dulles International Airport and connect Washington to major employment areas in Virginia, including Tysons Corner and Reston, as well as Largo, Md.
Good Use: Massachusetts’ Public School System
Providing excellent education is a top priority in Massachusetts, as tax dollars indicate. Educational funding for the 2018 fiscal year increased by 2.6 percent — or to $4.75 billion.
U.S. News & World Report ranked Massachusetts as the No. 1 state for education. The research shows the commonwealth outperforms for college readiness and students do extraordinarily well in reading and math tests when comparing eighth-graders in Massachusetts to other areas, so it appears to be paying off.
Good Use: South Dakota’s Retirement System
South Dakota is the No. 1 state for funding pensions, with the smallest gap between available funding and what’s owed to retirees.
In 2016, the state had $10.5 billion to pay retirees — or 96.9 percent of the needed funds, according to Bloomberg. Only Washington, D.C., surpassed the state in ability to fund pensions to retirees.
Good Use: Oregon’s Renewable Energy Policies
Oregon ranks No. 1 for renewable energy uses, according to U.S. World News & Report.
In 2016, Oregon updated its renewable portfolio standard (RPS) targets, ranking it among the top states in the country. The state requires that 50 percent of the electricity provided to Oregonians by two primary suppliers comes from renewable resources by 2040.
Good Use: Oregon’s I-5 Woodburn Interchange and Transit Facility
Oregon also ranks highly for infrastructure, with the $70 million I-5 Woodburn Interchange Project one of the best uses of tax dollars in recent years.
The project helped correct a longtime problem for many drivers: gridlock at the intersection of Interstate 5 and Highway 214/219 in Woodburn, which is in Marion County. Improvement and safety designs now accommodate traffic in the interchange area, and the project added a transit facility.
The project also had a major economic impact for Woodburn, as it created hundreds of permanent and construction jobs, new business opportunities and the possibility of business expansions.
Good Use: Minnesota’s St. Anthony’s Falls Bridge
The St. Anthony Falls Bridge is a great example of how state tax dollars are spent. The bridge was completed three months ahead of schedule, thanks to efficient project management. Construction also finished within its $234 million budget.
In Minneapolis, the original I-35W bridge over the Mississippi River collapsed on Aug. 1, 2007, leaving 145 injured and 13 dead. In very little time, both federal and state politicians responded with pledges to rebuild the bridge.
Good Use: Ohio Turnpike
The Ohio Turnpike is a 241-mile toll road that connects motorists along the northern corridor of Ohio to destinations east and west. The Ohio Turnpike has received recognition as the highest-rated toll road in the United States for resilient traffic base, low toll rates and conservative debt structure, according to OhioTurnpike.org.
In 2016, 54.9 million vehicles used the tollway. Traffic has increased steadily as has revenue, with $120.6 million in operating income in 2016.
Did You Know? Here’s How Much Money Traffic Costs You and the US
Bad Use: New Jersey’s Pension Fund
New Jersey falls on the total opposite end of South Dakota when it comes to pension payments. In fact, New Jersey has the worst pension system in the country, with less than a third of the money needed to cover state pension benefits, according to Bloomberg. The gap continues to widen, with a 6.5 percent drop between 2015 and 2016.
According to The Rockefeller Institute of Government at the State University of New York, by definition, anything under 40 percent is considered in crisis.
Bad Use: Alabama’s Northern Beltline
The Northern Beltline is a 52-mile-long highway with six lanes, funded by the Appalachian Development Highway System to make regions in Birmingham more accessible. Construction, however, stopped in fall 2016 because of the lack of federal funding to begin the next phase.
The project is estimated to cost $5.3 billion. The program wasn’t funded in the fiscal year 2018 federal transportation bill but is anticipated to pick up again in 2019. Even before this hiccup, not everyone was pleased with the project. Opposition dates back more than a decade.
Bad Use: Denver FasTracks in Colorado
Denver had a goal to become the most expansive transit city in the West, but so far, FasTracks isn’t living up to its expectations. FasTracks is a voter-approved initiative passed in 2004 that includes 122 miles of commuter rail and light rail tracks, as well as 18 miles of bus rapid transit, across eight counties in the metro Denver area of Colorado.
According to the Denver Post, the cost has already overrun the original cost of $4.7 billion. The Regional Transportation District (RTD) already has pumped $5.6 billion into the project since its conception — with more left to do. There’s also been lower ridership than anticipated.
Bad Use: Washington’s Big Bertha
Big Bertha is the nickname for the tunneling machine that paved the way to replace the earthquake-damaged Alaskan Way Viaduct. The tunneling began in July 2013, and it took nearly four years to dig the hole that one day will hold a new roadway. Before work began, politicians from both the local and state levels argued against the project.
The cost of the project is estimated at $3.2 billion, with $1.9 billion coming from Washington taxpayers. This reflects a 1.8 percent budget increase for the program through 2019, as approved by the state legislature in June.
Bad Use: Texas’ Superconducting Super Collider
Texas’ Superconducting Super Collider (SSC) was funded by the federal government, although Texas shares the blame for wasted tax dollars.
In 2012, the Higgs boson, a particle long predicted by modern physicists, finally was observed at a super collider in Switzerland. A massive project already had been in the works to build a super collider in Texas. It would have been capable of generating 20 times more energy than any machine at the time, and it would have had five times the energy of today’s collisions at the Large Hadron Collider, according to Scientific American.
The SSC was estimated to cost $4.4 billion, when approved in 1987, but by 1993, that figure had increased to at least $11 billion. Congress canceled the project on Oct. 21, 1993, but not before more than $2 billion had been spent — including $400 million in tax money. Only around 20 percent of the total work was completed.
Bad Use: California’s High-Speed Rail
The proposed bullet train sounds like a dream come true for anyone who has sat in Southern California traffic. The trip from Los Angeles to San Francisco that normally takes six hours by car could take less than three hours on a 200 mph train. This dream of building a 550-mile line from north to south in the state could be derailed by money, however.
As of January, the cost of building the first 119 miles of rail between Madera and Wasco has soared from about $6 billion to $10.6 billion, according to the Los Angeles Times. Currently, the price tag of the project is $64 billion, but the newspaper notes there is still an estimated $45 billion funding gap.
Bad Use: Boston’s Big Dig
The Big Dig is recognized among the largest and most complex infrastructure projects ever undertaken in the U.S. The aim of the project was to improve mobility around Boston and many commuter destinations.
But it has the legacy of one of the worst uses of state tax dollars. From the start, the project was plagued by cost overruns, shooting up to nearly $15 billion in 2007 from $2.6 billion. If you account interest on the debt — that’s $24 billion. The project also was eight years behind schedule.
Up Next: True or False? Dumb Things Your Taxes Have Funded
About the Author
Lia Sestric
You can follow her on Twitter @liasestric and Facebook @LSHWrites. Lia can be reached by email lia.sestric@gmail.com.
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All of us have asked this question at one point: “How are my taxes spent?” If you can answer that question, you’re ahead of the curve.
States have different priorities when it comes to how state taxes are spent. Some projects have been winners, benefiting thousands of people. Other projects have not produced great results.
Need examples? Click through to see how your tax dollars are spent.
1. Good Use: Children’s Health Insurance Program (All States)
Nearly 9 million children across the nation have access to health insurance under the Children’s Health Insurance Program, or CHIP. In fiscal year 2016, the program received more than $14.45 billion in federal money and $1.17 billion from the states. California, New York, Texas, Massachusetts and Illinois had the highest expenditures in the program — and some of these states have the highest healthcare costs in the country.
2. Good Use: Washington, D.C.’s Dulles Corridor Metrorail Project
The Dulles Corridor Metrorail Project is a 23-mile extension of the Metrorail system in Washington, D.C. It will add 11 stations east and west of the city’s downtown. The project budget is $5.76 billion.
The rail will extend to the Washington Dulles International Airport and connect Washington to major employment areas in Virginia, including Tysons Corner and Reston, as well as Largo, Md.
3. Good Use: Massachusetts’ Public School System
Providing excellent education is a top priority in Massachusetts, as tax dollars indicate. Educational funding for the 2018 fiscal year increased by 2.6 percent — or to $4.75 billion.
U.S. News & World Report ranked Massachusetts as the No. 1 state for education. The research shows the commonwealth outperforms for college readiness and students do extraordinarily well in reading and math tests when comparing eighth-graders in Massachusetts to other areas, so it appears to be paying off.
4. Good Use: South Dakota’s Retirement System
South Dakota is the No. 1 state for funding pensions, with the smallest gap between available funding and what’s owed to retirees.
In 2016, the state had $10.5 billion to pay retirees — or 96.9 percent of the needed funds, according to Bloomberg. Only Washington, D.C., surpassed the state in ability to fund pensions to retirees.
5. Good Use: Oregon’s Renewable Energy Policies
Oregon ranks No. 1 for renewable energy uses, according to U.S. World News & Report.
In 2016, Oregon updated its renewable portfolio standard (RPS) targets, ranking it among the top states in the country. The state requires that 50 percent of the electricity provided to Oregonians by two primary suppliers comes from renewable resources by 2040.
6. Good Use: Oregon’s I-5 Woodburn Interchange and Transit Facility
Oregon also ranks highly for infrastructure, with the $70 million I-5 Woodburn Interchange Project one of the best uses of tax dollars in recent years.
The project helped correct a longtime problem for many drivers: gridlock at the intersection of Interstate 5 and Highway 214/219 in Woodburn, which is in Marion County. Improvement and safety designs now accommodate traffic in the interchange area, and the project added a transit facility.
The project also had a major economic impact for Woodburn, as it created hundreds of permanent and construction jobs, new business opportunities and the possibility of business expansions.
7. Good Use: Minnesota’s St. Anthony’s Falls Bridge
The St. Anthony Falls Bridge is a great example of how state tax dollars are spent. The bridge was completed three months ahead of schedule, thanks to efficient project management. Construction also finished within its $234 million budget.
In Minneapolis, the original I-35W bridge over the Mississippi River collapsed on Aug. 1, 2007, leaving 145 injured and 13 dead. In very little time, both federal and state politicians responded with pledges to rebuild the bridge.
8. Good Use: Ohio Turnpike
The Ohio Turnpike is a 241-mile toll road that connects motorists along the northern corridor of Ohio to destinations east and west. The Ohio Turnpike has received recognition as the highest-rated toll road in the United States for resilient traffic base, low toll rates and conservative debt structure, according to OhioTurnpike.org.
In 2016, 54.9 million vehicles used the tollway. Traffic has increased steadily as has revenue, with $120.6 million in operating income in 2016.
Did You Know? Here’s How Much Money Traffic Costs You and the US
9. Bad Use: New Jersey’s Pension Fund
New Jersey falls on the total opposite end of South Dakota when it comes to pension payments. In fact, New Jersey has the worst pension system in the country, with less than a third of the money needed to cover state pension benefits, according to Bloomberg. The gap continues to widen, with a 6.5 percent drop between 2015 and 2016.
According to The Rockefeller Institute of Government at the State University of New York, by definition, anything under 40 percent is considered in crisis.
10. Bad Use: Alabama’s Northern Beltline
The Northern Beltline is a 52-mile-long highway with six lanes, funded by the Appalachian Development Highway System to make regions in Birmingham more accessible. Construction, however, stopped in fall 2016 because of the lack of federal funding to begin the next phase.
The project is estimated to cost $5.3 billion. The program wasn’t funded in the fiscal year 2018 federal transportation bill but is anticipated to pick up again in 2019. Even before this hiccup, not everyone was pleased with the project. Opposition dates back more than a decade.
11. Bad Use: Denver FasTracks in Colorado
Denver had a goal to become the most expansive transit city in the West, but so far, FasTracks isn’t living up to its expectations. FasTracks is a voter-approved initiative passed in 2004 that includes 122 miles of commuter rail and light rail tracks, as well as 18 miles of bus rapid transit, across eight counties in the metro Denver area of Colorado.
According to the Denver Post, the cost has already overrun the original cost of $4.7 billion. The Regional Transportation District (RTD) already has pumped $5.6 billion into the project since its conception — with more left to do. There’s also been lower ridership than anticipated.
12. Bad Use: Washington’s Big Bertha
Big Bertha is the nickname for the tunneling machine that paved the way to replace the earthquake-damaged Alaskan Way Viaduct. The tunneling began in July 2013, and it took nearly four years to dig the hole that one day will hold a new roadway. Before work began, politicians from both the local and state levels argued against the project.
The cost of the project is estimated at $3.2 billion, with $1.9 billion coming from Washington taxpayers. This reflects a 1.8 percent budget increase for the program through 2019, as approved by the state legislature in June.
13. Bad Use: Texas’ Superconducting Super Collider
Texas’ Superconducting Super Collider (SSC) was funded by the federal government, although Texas shares the blame for wasted tax dollars.
In 2012, the Higgs boson, a particle long predicted by modern physicists, finally was observed at a super collider in Switzerland. A massive project already had been in the works to build a super collider in Texas. It would have been capable of generating 20 times more energy than any machine at the time, and it would have had five times the energy of today’s collisions at the Large Hadron Collider, according to Scientific American.
The SSC was estimated to cost $4.4 billion, when approved in 1987, but by 1993, that figure had increased to at least $11 billion. Congress canceled the project on Oct. 21, 1993, but not before more than $2 billion had been spent — including $400 million in tax money. Only around 20 percent of the total work was completed.
14. Bad Use: California’s High-Speed Rail
The proposed bullet train sounds like a dream come true for anyone who has sat in Southern California traffic. The trip from Los Angeles to San Francisco that normally takes six hours by car could take less than three hours on a 200 mph train. This dream of building a 550-mile line from north to south in the state could be derailed by money, however.
As of January, the cost of building the first 119 miles of rail between Madera and Wasco has soared from about $6 billion to $10.6 billion, according to the Los Angeles Times. Currently, the price tag of the project is $64 billion, but the newspaper notes there is still an estimated $45 billion funding gap.
15. Bad Use: Boston’s Big Dig
The Big Dig is recognized among the largest and most complex infrastructure projects ever undertaken in the U.S. The aim of the project was to improve mobility around Boston and many commuter destinations.
But it has the legacy of one of the worst uses of state tax dollars. From the start, the project was plagued by cost overruns, shooting up to nearly $15 billion in 2007 from $2.6 billion. If you account interest on the debt — that’s $24 billion. The project also was eight years behind schedule.
About the Author
Lia Sestric
You can follow her on Twitter @liasestric and Facebook @LSHWrites. Lia can be reached by email lia.sestric@gmail.com.
