Are rural places getting more than their fair share from metros? A report from Minnesota

That's the gist of this Minnesota Reformer piece headlined, "Twin cities metro sends money to rural counties."  Madison McVan reports: 

A common refrain from Minnesota Republicans goes something like this: Rural communities are overtaxed, underfunded and ignored by legislators. Greater Minnesota sends their tax dollars to the Twin Cities, where metro residents benefit from government programs.

At a Nov. 15 event in New Ulm, Republican State Sen. Gary Dahms repeated the sentiments that have fueled the kinds of outstate Republican campaigns that helped them win the Minnesota House a decade ago:

“If you look at the money that’s collected in rural Minnesota, for gas tax and things like that, we do not get our fair share for transportation. If you look at health care, we do not get our fair share for health care,” Dahms said, according to the New Ulm Journal. “It really shows up in education, when you see what we get per student, versus what the seven-county metro area … there is a major, major difference there.”

It’s a sweeping argument that plays into the state’s often bitterly divided partisan and geographic politics, which have become deeply intertwined during the past decade, with Republicans dominating greater Minnesota while the Democratic-Farmer-Labor Party has locked down the metro. It also simplifies a complicated web of tax and revenue distributions — and it’s factually untrue.

Department of Revenue data show that the Twin Cities metro is the state’s biggest driver of tax revenue, and rural counties benefit more than the metro area from government aid.

Twin Cities metro residents paid an average of $4,362 in taxes and received $3,252 in aid and credits per capita in 2019, according to analysis by the Minnesota House Research Department. In the non-metro area counties the same year, residents paid an average of $2,871 per person in taxes and received $3,423 in state aid and credits per capita.

That the 7-county metro would contribute more to Minnesota’s overall tax base isn’t surprising, nor complicated: The metro has more people, its jobs pay more, and the property values are higher. Because both income and property taxes are progressive — the more you make and the more your house is worth, the more you pay — the metro’s contribution is larger.

Kelly Asche of the Center for Rural Policy and Development speaks to the higher costs facing rural programs, which tend to be "less efficient when people are spread out."  She said, 

In a rural area, we are fighting against the economies of scale. It is the rural enemy to be efficiently run.

Read more analysis of what rural Minnesota needs here, with accompanying map here.

This is, of course, an old debate.  In California, for example, we hear it in relation to the would-be State of Jefferson when people ridicule the notion that Jefferson would be better off separate from California, given that these rural counties get more from the state coffers than they pay in.

We usually see this rural v. urban funding debate play out at the federal level--that is, which states get more than their fair share.  I wrote about that most recently here.