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Maine's Share of Federal Dollars Among Nation's Highest: Report

A new report from the Pew Charitable Trusts ranks Maine among states in the nation that are receiving the most money from the federal government each year.

On a per capita basis, Maine was rated in sixth place in federal spending per person, estimated at more than $12,000 per resident. And while that's a high number, one economist says it's not necessarily a bad thing.  

The numbers from the Pew Charitable Trusts indicate that Maine receives more federal dollars per capita than any other New England state, and is fourth among the states when those dollars are contrasted their total economic output, or gross domestic product. Anne Stauffer is the director of the Fiscal Federal Initiative for Pew.

"Maine is among the top five of how important federal spending is to a state," Stauffer says. "It's 30 percent - basically equivalent to 30 percent of the state's GDP. I think what that shows is just some factors and some characteristics within the state of Maine that means that federal spending plays a larger role than in other places in New England and in the country."

Those rankings are heavily influenced, Stauffer says, by the state's large numbers of retirees as a percentage of its population, most of whom are receiving Social Security and veterans' benefits, and non-retirement benefits such as Medicare, food stamps and other programs. Stauffer says the state's heavy reliance on federal dollars could result in more pain for Maine than other states in the event of a federal shutdown.

At the Maine Center for Economic Policy, Executive Director Garrett Martin says Maine's status as a large recipient of federal dollars has tremendous implications for the state's economy since those who are drawing down Social Security are using those resources to pay for goods and services.

Martin says the same spin-off effect from federal dollars can also be found in the health care industry and predicted that Maine will be among the states that take an economic hit because it chose not to sign on to Medicaid expansion under the Affordable Care Act.

"Those states that haven't accepted those funds - and Maine is one of those - are going to see their share of federal dollars that they draw down relative to other states go down somewhat," Martin says, "and, similarly, will not reap the benefits that those dollars offer in terms of the services that their people have access to, and in terms of the economic impact of access to those services."

The Pew Charitable Trusts study was initiated as part of effort to replace a similar report that was compiled earlier by the U.S. Census Bureau.