The Best and Worst Ways States Use Your Tax Dollars

Most of us don't think much about our taxes beyond feeling the sting as they're carved out of our pay and sent to the IRS and the state we live in. However, those taxes go into the world and do a great many things depending on the state you live in.

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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, or have suffered setbacks, financial woes, and even suffered the economic hits of the COVID-19 pandemic.

Need examples? Click through to see how your tax dollars are spent.

Last updated: Feb. 23, 2021

Good Use: Children’s Health Insurance Program (All States)

9.6 million children across the nation have access to health insurance under the Children's Health Insurance Program, or CHIP. In fiscal year 2017, the program spent more than $16.29 billion in federal money and $1.23 billion in 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.

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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.

Phase 1, which opened in July 2014, spans 12 miles from East Falls Church to Wiehle Avenue in Reston and included five stations. Its estimated cost was $2.906 billion.

Phase 2  is adding six stations, including stops in Reston, Herndon, Dulles Airport, and in Ashburn. Its estimate cost is $2.78 billion.

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Good Use: Oregon’s Renewable Energy Policies

Oregon ranks No. 1 for renewable energy uses, according to U.S. World News & Report.

In 2019, renewable resources, dominated by hydroelectric power, accounted for more than three-fifths of the electricity generated in Oregon

The state requires that 50 percent of the electricity provided to Oregonians by two primary suppliers comes from renewable resources by 2040. For smaller utilities, that target is 10% renewable electricity by 2025, and for the tiniest utilities of all, a target of 5%.

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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.

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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 2018, 54.3 million vehicles used the tollway. Traffic has increased steadily as has revenue, and a toll increase in 2018 brought an additional $10.2 million in toll revenue.

Bad Use: Kentucky's Pension Fund

When it comes to pension payments, Kentucky is failing its retirees. According to USA Today, which drew data from the Pew Charitable Trusts, Kentucky was only 33.9 percent funded as of 2019, with a $42.9 billion shortfall.

According to The Rockefeller Institute of Government at the State University of New York, by definition, anything under 40 percent is considered in crisis.

Still, as of 2017, a year that saw significant, economic growth, only 17 states met employer contribution benchmarks.

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.

Federal funds were finally approved for the $5.3 billion program in 2019 but the project has received significant criticism from consumer and environmental groups who argue its environmental impact will be huge, and that it will draw funds away from other, smaller but more necessary transportation costs.

The project is estimated to cost $5.3 billion.

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 -- but is facing problems with declining ridership, high turnover among employees and fares that are the highest in the nation. Denver officials continue to try and work out solutions despite criticism and frustrations.

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.

The 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. The Trump administration cancelled a $929 million grant in 2019, and then COVID-19 pandemic hit, signaling further doubt about the viability of the project. Currently, the project is lacking at least $1 billion in funds to proceed.

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.

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Jordan Rosenfeld contributed to the reporting for this article. 

Photo note: Some of images used in this article are representational.

About the Author

Lia Sestric

Lia Sestric is a Pittsburgh native and graduate from E.W. Scripps School of Journalism at Ohio University. Her bachelor’s degree is in Broadcast News. She has written and produced television news stories in the Los Angeles area and Charleston, S.C. In 2012, Lia began to freelance write on the side about higher education and careers for Yahoo! Finance. Lia is now based in the Washington, D.C. area and continues to work on national and local writing contracts. Her work frequently appears on major sites like Yahoo, The Huffington Post, MSN, Entrepreneur, Business Insider, USA Today, in addition to GOBankingRates. 

You can follow her on Twitter @liasestric and Facebook @LSHWrites. Lia can be reached by email lia.sestric@gmail.com.

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