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Report Shows Which Counties Pay More, Get More State Taxes

January 12, 2010

The Indiana Fiscal Policy Institute and Ball State University’s Miller College of Business and Economic Research have released a first of its kinds report in the state that tracks the flow of Indiana tax dollars to and from individual counties. The report shows that twenty two of Indiana’s ninety two counties pay more in state tax dollars than they receive. With few exceptions, those counties were in Indiana’s metropolitan areas, while mostly rural counties were net recipients of state tax dollars. Indiana Fiscal Policy Institute executive director John Ketzenberger says that trend of urban areas subsidizing services in rural areas is mirrored in other states. And he adds that it challenges a long standing belief in the General Assembly about taxpayers sending their money to Indianapolis.

“I think that if you look at the numbers, they speak for themselves. The fact is, urban counties like Marion, Allen, Vanderburgh and others, essentially subsidize more rural counties.”

The report analyzes state revenue for fiscal year 2009. It does not consider other revenue that counties receive, including federal and local tax revenue. It also looks at 550 ways state money can be spent in a given county, including Medicaid payments, public education, and transportation.

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