Where tax you pay actually pays you back: The 10 best and worst states for taxpayer "ROI"

Where tax you pay actually pays you back: The 10 best and worst states for taxpayer "ROI"
Source: AP
Source: AP

You begrudgingly pay your taxes on time year after year, only to keep hitting the same pothole in the road. You wonder: What on earth is the government doing with my tax dollars?

While it might not be literally flushing your cash down the toilet, it's true some states charge far higher taxes than others — and there's great diversity, to put it mildly, in how states actually allocate revenue to projects.

Curious about how your state spends your hard-earned money? On Tuesday, WalletHub issued its 2017 "States with the Best and Worst Taxpayer Return on Investment" report, which weighed the quality of government services against state and local taxes paid in each state.

"ROI" can mean different things to different people, but WalletHub analyzed five key categories of government service, including education, health, safety, economy, and pollution and infrastructure.

Notable findings? Nebraska has the lowest proportion of major roads in poor condition (5%), which is nearly 9 times lower than Connecticut's 44%. Alaska has the highest number of violent crimes per 1,000 residents (7.3), compared to Vermont's rate of 1.2. The report also suggests that residents of "red" states typically get more from their tax dollars than those who live in "blue" states.

Read on to see where your state landed on WalletHub's list.

The 5 states with the best ROI for your tax dollars

Which states get the most from their tax dollars? Some residents pay less — and actually receive more.

5. Alaska

Source: Dan Joling/AP

Alaska residents pay the least in overall state and local taxes. "Alaska ranked first for the total taxes paid per capita, as it has the lowest tax amount paid in the country at $1,584," WalletHub analyst Jill Gonzalez told Mic in an email interview. "This ranking combined with the overall government services rank places Alaska as the fifth best state for taxpayer ROI. Basically, 'you get what you pay for' holds true." 

Some caveats: Though Alaska has a lower rate of residents living in poverty, it does have a higher rate of violent crime as well as one of the country's worst school systems.

4. Virginia

Virginia ranked 15th in total taxes paid per capita and eighth on overall government services. The state has the third-lowest rate of violent crime and landed in the top 10 for education. Virginia also did well when it came to health care and the economy, but lagged in infrastructure.

3. Florida

At No. 3, residents of the Sunshine State pay toward the lower end of state and local taxes; however, the state came in just 34th for government services. Florida ranked fourth for infrastructure, but landed somewhere in the middle or bottom for health care, safety and the economy.

2. South Dakota

South Dakota came in ninth for total taxes paid per capita and 16th for government services, putting the midwestern state toward the top of the overall list. It boasts the fourth-best hospital system and ranked No. 1 for infrastructure and pollution, but came in toward the bottom for education.

1. New Hampshire

Source: Jim Cole/AP

New Hampshire taxpayers should feel pretty good about the allocation of their tax dollars: Residents enjoy the second-lowest rates of state and local taxes in the country, but New Hampshire's overall ranking of government services came in fifth — which means the Granite State provides the biggest bang for citizens' bucks. The state also has one of the lowest crime rates and ranked No. 1 for the lowest percentage of residents living in poverty. Both New Hampshire's schools and economy ranked high, too.

The 5 states with the worst ROI for your tax dollars

Which states are less efficient at spending tax dollars for the benefit of residents? Some of these states charge a lot, but only give back a little. According to the WalletHub study, these are the worst five states for your tax dollars.

5. New York

Ranked 46th on the list, New Yorkers pay quite a bit in state and local taxes but don't get much in return. Though New York came in 12th for safety, it otherwise remained toward the bottom of other categories — even hitting dead last for infrastructure and pollution.

4. California

Californians also face a hefty tax bill, coming in 44th for "total taxes paid per capita" and 32nd for government services. California's highest ranking was 16th for health care; the state landed toward the middle or bottom for both infrastructure and pollution.

3. New Mexico

Source: Morgan Lee/AP

Similarly, residents of New Mexico pay more but get less, with state and local taxes ranked at No. 32 and government services landing in 49th place. The state ranked low for schools, high for violent crime and has a high percentage of residents living in poverty. The silver lining: Good infrastructure and low pollution put New Mexico at No. 8 for both measures.

2. Hawaii

Everyone knows Hawaii is expensive. But the proof is now irrefutable: The Aloha State ranked 48th for total taxes paid per capita and only 35th for government services. Hawaii also came in toward the bottom for water quality, roads and bridges — but its health care ranked higher, at No. 7.

1. North Dakota

The dubious honor of "worst" on WalletHub's list goes to North Dakota, where residents pay the most in state and local taxes. Then again, the state's government services ranked No. 9, which means it's not all bad news. Though the state was dragged down by high taxes, it landed toward the top on several service measures, including infrastructure and pollution, economy and health.

Perhaps ROI really is in the eye of the beholder — or, in this case, taxpayer.

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