(The Center Square) – New Jersey ranks 38th out of the 50 states when it comes to taxpayer rate of return, according to a new analysis.
The Garden State is 49th most-dependent on those taxes and 15th in overall government services, according to personal finance website WalletHub’s Best & Worst Taxpayer Return on Investment for 2021 report.
John Kiernan, WalletHub managing editor, said in the report that federal taxes and support are only part of the story.
“Different states have dramatically different tax burdens," Kiernan wrote. "This begs the question of whether people in high-tax states receive superior government services.”
William Kusterman, adjunct professor at University of Minnesota’s Carlson School of Management, said local governments need to operate similarly to the businesses and families they serve in terms of adjusting to economic ups and downs.
“State and local governments that concentrate on managing and delivering only those services that are core to the explicit missions of state and local governments will be able to use tax revenue more efficiently than those that allow mission creep and mismanagement,” he told WalletHub.
Citizens can assess the ROI of their local tax dollars through annual city and county budgets as well as planning and expenditure data which is commonly available online, he said.
“Local governments may waste taxpayer dollars by failing to annually ask the difficult questions related to needs versus desires and by failing to make difficult decisions regarding spending in periods of economic downturn,” he said.
“Tax Day can be a painful reminder of how much we have to invest in federal, state and local governments, though many of us are unaware of exactly what they give us in return,” Kiernan said.
“As a result, this creates a disconnect in the minds of taxpayers between the amount of money we should fork over on Tax Day (May 17 this year) – and how much we deserve in return.”
WalletHub’s Taxpayer Survey indicates that 222 million Americans think the government does not spend taxes wisely, especially during the COVID-19 pandemic.
The report indicated that taxpayers ranked higher in Republican-leaning states than in Democrat-leaning states with New Hampshire giving the best return and Hawaii the lowest, with blue states overall getting a 21.20% rate compared to Red states at 29.80%.