I have an op‐ed in Politico about “earmark donor states.” It’s a term I invented to highlight a rarely discussed side of earmarking: public choice economics.
As public choice theory would predict, the earmarking process operates under a system of concentrated benefits and diffuse costs. Based on an analysis of 2009 data, 16 states receive a disproportionately large percentage of the earmark pie and can be labeled “earmark beneficiary” states. The other 34 states and the District of Columbia are “earmark donors,” as they receive fewer earmark dollars than they proportionally should.
To determine which states win and lose in the earmarking game, I looked at the share of taxes each state sends to Washington and compared it to the share of earmarks that each state receives.
In the op‐ed, I use Colorado, one of the biggest earmark donor states, as an example:
Colorado taxpayers contribute about 1.6 percent of total federal taxes, but they receive just over two‐tenths of one percent of earmarked funds—proportionally speaking, less than a third of what it should be getting. This works out to more than $200 million dollars that Coloradans are spending to subsidize earmarks in other states – hardly chump change. So while Colorado’s representatives might pat themselves on the back for securing funding for an occasional municipal bus or bioenergy plant, their earmarking rivals in other states like West Virginia and Hawaii obtain funding for larger and more expensive projects and send the bill to the Centennial State.
Below is a table with additional data indicating which states are earmark donors and recipients. The key column is the “earmark ratio.” The lower the figure, the smaller a state’s share of earmarks is relative to the amount of taxes its residents and businesses pay. A state with an earmark ratio below 100% is a donor state. As you can see, Utah is the first state on the table that receives slightly more than its proportional share of earmark funds. Mississippi, the last state on the list, remarkably receives 11 times more than its proportional share.
Also note that the most populous states in the country are earmark donors – almost 90 percent of Americans live in earmark donor states.