Introduction
With the advancement of information and communications technology over the years, it is indeed astounding to see the abundance of information on the internet summarized in the form of info-graphics on a wide range of topics. As far as the United States of America is concerned, the most common types of such graphical illustrations are which show state wise regional differences. The parameters do have a wide range and it can be anything from consumption of beer to even average number of hours spent by residents on Netflix. Among such illustrations, one which captivated the author of this presentation highlighted the dependency and the relationship of states with the federal government when it came to comparing the states on their reliance on federal funding.
This illustration was an article on one of the popular websites ‘Wallet Hub’ and displayed a map of USA states using different colorations for states on the basis of their dependency on federal funding – the most dependent states with a dark shade of red while those which were least dependent on federal funding were represented with the lightest shade of green. It finally led to the development of this study which aims at understanding the particulars behind the aspect of federal funding and also the returns which states, particularly Texas, receive back on the federal income-tax investment. In the pages to follow, these aspects have been highlighted in greater detail.
Research questions for the study
As with all successful researches, the primary task needed to shape this study was to outline the research questions to which answers could be obtained. These literary evidence based answers then further facilitated the relevance and importance of understanding federal funding to one state in particular, Texas. These questions are as under:
(1) What is the rank of Texas in terms of federal funding rankings among the 50 states?
(2) What has been the basis of such rankings?
(3) What is the relevance of federal taxes relation to the United States as a whole?
(4) What have been the developments in federal funding in the United States?
(5) What is the relevance of the present rankings to Texas?
The answers to the above questions (1) and (2) can be directly presented here. For the year 2015, Texas was ranked 32 in terms of federal funding among the 50 states. The basis for the calculation of such rankings, as mentioned by ‘Wallet Hub’ was 3 primary factors. These are as under:
(a) The per capita spending by the federal government in Texas compared with each dollar paid by one person in Texas as income tax.
(b) The contribution of federal funding to the annual revenue collected by the state of Texas
(c) The number of federal employees per 100 people of the population of Texas.
However, as far as the remaining three questions are concerned, it was determined that these aspects be discussed in separate sections.
Relevance and Developments in Federal-Taxes relations
It is well known that the amount of taxes collected in any geographical location is dependent on the per capita income and also the profitability of business organizations in the area .
Types of Federalism
What was an important aspect that needs to be highlighted is that since funding was primarily through grants and aids, this form of federalism did give the national government dominance over use of monetary resources . Since the 1970s, there was more pressure to expand the power of the national government already present in the co-operative arrangement and thus, the emergence of the Coercive Federalism was observed. What needs to be highlighted in this case is that in many of the states, the ideology for utilization of federal funds and dependency on them were largely influenced by the developments in federalism over the years. Texas ultimately became one of those states which relied lesser than the others on federal funding.
Relevance of present federal funding rankings to Texas
Given the present situation of the state of Texas in terms of federal funding, the people of the state have also become less dependent on federal funding when it comes to livelihood and occupation. The state is not as dependent on federal expenditure on it as states like Mississippi and it has a comparatively high GDP than others with the given amount of federal funding it receives. This also means that a higher rate of taxation is prevalent I Texas as compared to the other states of USA – especially the ones which are ranked much higher on federal funding rankings. This has created a division in the opinion of experts on the issue. Some argue that lesser dependence on the central financial mechanism is beneficial to the state as well as the federal government as the far as fiscal calculations are concerned. While others differ in opinion and argue that even though it is beneficial to the present coercive form of federalism, the burden is unjustly vested on the shoulders of the resident. Even though disparities are prevalent, one thing which is clear is that the economic condition and per capita income in Texas is better than many of the states of US of A.
Conclusion
It needs to be highlighted that the most important outcome from the study is that there exists differences in the economic condition of the states of USA. From the very beginning, America seems to have been against a central form of government which has made federalism a very strong influence on the development of governmental policies and strategies in the nation. Perhaps the most visible outcome of this situation is the wide difference in the rankings of states in terms of federal funding. The direct outcome of the situation is that some states have become too much dependent on federal finding while other states have exhibited strong economic character. Texas, at the present lies midway between being totally dependent on federal funding and being completely independent in this regard. It also indicates that in the future, it has equal chances of becoming stronger or more dependent on federal funding. It is here that the importance and relevance of this study is established – it paves the way for evaluation of current situation for Texas and thus, a new research into how well is the state positioned to further reduce dependency on federal funding and being closer to states like Delaware, which has a dependency rank of 50 and is least dependent on federal funding. Likewise, research also needs to be carried out on the potential pros and cons of being in a similar position like Delaware.
References
Brancati, D. (2009). Peace by Design: Managing Intrastate Conflict through Decentralization. Oxford: Oxford UP.
Kiernan, J. S. (2016, March 28). 2016’s Most & Least Federally Dependent States. Retrieved May 2, 2016, from WalletHub: https://wallethub.com/edu/states-most-least-dependent-on-the-federal-government/2700/
LaCroix, L.A. (2010). The Ideological Origins of American Federalism. Cambridge, Massachusetts, : Harvard University Press.
Lloyd-Laney, M. (2013). Making Information User-Driven. Wallingford, UK: Communication and Information Management Resource Centre.
Scott, A. (2003). Research and Policy Development. London: Parliamentary Office of Science and Technology.
