U.S. Rep. Bill Foster introduced a bipartisan bill aiming to assess the economic impact on states that pay more in federal taxes than they get back in federal aid, referred to as "payer states."
The Payer State Transparency Act of 2020 would require the Office of Management and Budget, in conjunction with the Council of Economic Advisors and the Treasury Department, to produce annual assessments on these states, according to a news release.
The assessments would compare the net effects these states see from all federal spending programs and compare these figures against a model of their tax burdens developed by the Bureau of Economic Analysis.
A 2007 report estimated that 17 states, including Illinois, pay more to the federal government than they receive in spending.
Foster said the impact of this difference can be dramatic. For example, Illinois receives only 75 cents in federal spending for every dollar it pays in federal taxes. This multiplies to a net outflow of more than $20 billion a year, or almost $1,600 per citizen.
"Taxpayers in Illinois and other payer states have been getting rooked by unfair spending formulas that are cooked up in the Senate to benefit small population states," Foster said in the release. "This problem exacerbates budget shortfalls in payer states, forces them to raise state taxes to balance their budgets, and contributes to underinvestment in major areas like infrastructure and education."
Foster introduced the bill with Rep. Van Taylor, R-Texas.