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Front Page » December 25, 2003 » Local News » Utah return on federal tax dollar ranks 24th in nation
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Utah return on federal tax dollar ranks 24th in nation


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By KAREN BASSO
Staff reporter


Utah's return on the federal tax dollar is ranked 24th highest in the United States.

When the taxes are compared to federal receipts, Utah is one of 34 local governments subsidized by the remaining 16 states.

For every dollar Utah taxpayers sent to the federal government in 2002, the state received $1.15 in return, according to the latest report issued by Northeast Midwest Institute.

The NEMW report provided statistical data on Utah's subsidization and the state's middle of the pack ranking by comparing five federal spending categories.

The spending categories include:

•Retirement and disability.

•Other direct payments.

•Grants.

•Procurement.

•Salaries and wages.

•For Social Security, disability and retirement payments, the 2002 figures indicate that Utah received $1,607 per capita, the second lowest dollar amount in the nation.

The lower figure is primarily attributable to Utah's young population.

The governor's 2003 economic report confirmed that the state's median age in 2000 - 26.7 years - was the youngest in the nation, pointed out the Utah Taxpayers Association.

In the other direct payments category, Utah received $807 per capita, the lowest in the nation.

The payments include federal spending items like Medicare, rent supplements and food stamps.

For grants, Utah received $1,164 per capita to rank eighth lowest in the nation.

Grants included items like Medicaid, highways, transit and low-income housing.

The governor's '03 economic report shows that Utah had the 10th lowest poverty rate in the U.S. in 2000.

The state posted a median household income of $48,378 or the 12th highest level reported in the nation.

Utah's relatively strong economy also reduced the state's reliance on other federal programs.

The location of federal facilities in Utah caused higher than average amounts of federal spending dollars to funnel back to state.

The NEMW report determined that procurement along with federal salaries and wages received comparatively higher amounts of federal spending in Utah during 2002.

The state ranked 12th highest in per capita spending at $900 for federal salaries and wages.

Utah state placed 21st highest in per capita procurement spending at $833.

The high amounts are largely attributable to Hill Air Force Base and the Internal Revenue Service Center in Ogden.

According to the gover-nor's 2003 economic report, the defense industry in Utah continued to expand in 2001, with spending totaling $2.35 billion in 2001.

Utah's rankings were comparatively high in procurement along with U.S. government salaries and wages.

However, the state's total per capita federal spending registered significantly lower than the national average in 2002.

The situation is attributable to the state's lower rankings in other three federal spending categories, noted the Utah Taxpayers Association.

For example, disability and retirement exhausted the largest portion of federal spending, explained the association.

Utah received the second lowest amount nationwide in the category.

The state also received proportionately lower amounts in other direct federal payments and grant funding.

Utah's comparatively low per capita federal tax burden required only a slightly larger amount of spending to produce a return, pointed out the association

The NEMW data indicated Utah's middle of the pack ranking resulted from a comparatively small per capita federal tax burden at $4,527 and the redistribution of a relatively small amount of per capita federal dollars at $5,311.

Utah's federal tax burden ranked in the 44th lowest slot, while the redistribution of per capita U.S. dollars in the state ranked 48th lowest in the nation.

The combination of the two factors provided the Utah taxpayer with the 15 cent return on the dollar.

In comparison, New Mexico had the highest return on the federal dollar at $1.34.

The lowest ranking state, New Jersey, lost 44 cents on the federal dollar.

Utah has a comparatively small per capita federal tax burden partially because the state has large families, explained the association.

The governor's economic report shows Utah had an average household size of 3.13 persons in 2000 - the largest in the nation.

Larger households with non-wage earning children reduce Utah's federal burden because youngsters do not pay taxes.

In 2000, Utah's per capita personal income registered at $24,180 to rank 46th lowest nationwide.

The NEMW's middle of the pack ranking reflected Utah's federal taxes and receipts.

But Utahns continue to shoulder a heavy state and local tax burden.

The latest data compiled by the U.S. Census Bureau indicated Utah ranked as the ninth highest in the nation for state and local taxes paid as a percent of personal income in 2000, concluded the association.


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