Personal Finance News
Study Calculates “Taxpayer ROI” for Every State
Under normal circumstances, today (April 15th) would be Tax Day in the United States of America. However, with the COVID-19 pandemic all but shutting down the economy, this year’s filing deadline has been moved to July 15th instead. Still, in the spirit of tax season, the personal finance site WalletHub recently compiled a study on “taxpayer return on investment” — or “taxypayer ROI.” Moreover they then ranked each state to find which had the highest and lowest ROI.
For their study, WalletHub first looked at state government services across five main categories: Education, Health, Safety, Economy, and Infrastructure/Pollution. Each of these categories were worth 20 points (to arrive at an overall score out of 100) and were made up of several subcategories. For example, factors in the Education category included the quality of the state’s school and university systems, graduation rates, pre-K funding, voucher programs, and more. Meanwhile the Health category considered the number of hospital beds per 1,000 residents, quality of public hospitals, average life expectancy, health insurance premiums, etc. Additionally Safety, Economy, and Infrastructure/Pollution categories included such data points as violent crime per capita and fatalities per 100 million vehicle miles traveled; median household income, annual job growth rate, and unemployment rate; and quality of roads/bridges, average commute time, and water quality respectively. Finally, once an Overall Government Services Score was calculated, it was compared to the state’s Total Taxes Paid per Capita to determine the Taxpayer ROI.
With that explanation out of the way, which state proved to have the highest score? That would be the great state of New Hampshire. The Granite State ranked first in Total Taxes Paid per Capita (meaning its resident paid the least) while ranking 10th for Government Services. They were followed by South Dakota, which ranked 8th for taxes paid and 19th for services. Rounding out the top five were Florida (5th and 32nd), Virginia (20th and 4th), and Georgia (10th and 33rd).
On the other end of the spectrum, the 50th state managed to rank in 50th place. Hawaii was 49th for taxes paid while only placing 23rd in services. Just above them was California, ranking 45th and 34th. Interestingly North Dakota ended up with an overall ranking of 48th despite placing second in services — although that was dragged down by their ranking of 50 for taxes paid per capita. Notably the District of Columbia was excluded from WalletHub’s study.
Turning back to the five categories that made up the Overall Government Services Score, Wisconsin finished first for Education while Minnesota was first in Health. Additionally Maine ranked number one in Safety, Utah led Economy, and North Dakota took the Infrastructure/Pollution category. Some other interesting findings from WalletHub’s study include Massachusetts proving to have the best school systems (with New Mexico on the other side of the coin), Tennessee having the best roads and bridges (compared to Rhode Island in last place), and South Dakota having the best hospital systems (New Jersey was last).
While WalletHub’s study is unlikely to sway many Americans into moving, it is interesting to compare the states under these metrics. That said, while compiling data can tell one story, not everything regarding government services and resident experience can be quantified in such a way. In any case, you can explore more of WalletHub’s finding here — and Happy Would-Be Tax Day to you and yours.
