Texas ranked 7th in measure of Services Received compared to Taxes Paid
Texas Insider Report: AUSTIN Texas Texas has one of the best rates of return on taxpayer investments of all states according to an analysis by WalletHub. The Lone Star State ranked 7th in this measure of the services received compared to taxes paid.
In other words despite all the criticism Texans tend to get a lot of bang for their buck.
Before we get too excited however theres more to the story.
This analysis first looked at education health safety economy and infrastructure and pollution. These categories were translated into measurable parameters such as:
- High School Graduation Rates
- Hospital Beds per 1000 Residents
- Household Incomes
- Unemployment Rates
- Violent Crime Statistics and
- Commute Times
Information was then compared across states and an overall measure and ranking of the quality of government services emerged.
The other aspect of the calculation was Total State & Local Taxes paid in each state on a per-capita basis (for people over 18).
When the math was done Texas compared well in terms of the return on investment. Its the nature of this type of calculation that a state can rank at the top (or the bottom) of the list whether taxes are high or low.
A state with high taxes but really good services can compare well as can a state with relatively low taxes but not-too-bad services (where Texas fits).
The worst case is high taxes without correspondingly excellent services (California is in this category). Additionally some natural advantages can skew the rankings in either direction.
It wasnt public policy that put oil under the Permian Basin.
Clearly a good return on taxpayer investment is a desirable outcome. Its less clear however whether the long-term interests of Texans are best served by the current situation.
In terms of services there were several categories where Texas fell near the bottom of the list and Texas overall government services rank was a less-than-mediocre 38th. Long-term prosperity is not optimized when education health and infrastructure are falling behind on the altar of low current tax levies.
Another look at taxes by state is the Tax Foundations State Business Tax Climate Index. Texas comes in at 15th largely due to ranking sixth for individual income tax. Unemployment insurance tax rank for Texas was 18th sales and property taxes were both 37th and corporate taxes were a dismal 49th.
Again while some aspects of the states tax situation are favorable there is ample room for improvement.
Hats off to the governmental entities which are managing to provide reasonably good quality services given very tight budgetary constraints.
However additional resources will definitely be required to keep Texas at the forefront of growth and prosperity in the coming decades.
Dr. Ray Perryman President & CEO of The Perryman Group has almost 40 years of experience in developing systems analyzing complex problems and communicating effectively.
