Professor Schaff takes to the paywalled pages of the Pierre Capital Journal to blow smoke about South Dakota's fiscal ethos:

According to the Tax Foundation, South Dakota has the second lowest tax burden of any state in the nation. By way of comparison, South Dakota’s state and local per capita tax burden is $3,035 a year, while the highest taxed state, New York, has a per capita tax burden of $6,375.

Our state also ranks near the bottom in per capita government spending. This fiscal austerity puts our state in good stead, especially as compared to many states [Jon Schaff, "Forget the Blue State Model: SD deserves praise for fiscal conservatism," Pierre Capital Journal, 20912.11.22].

Yes, we keep our state and local tax burden low by relying on the federal government to take care of our needs. Take a look at the federal taxes we pay versus the federal spending we receive. In 2009, while we South Dakotans paid $6,069.40 in taxes per capita to the IRS, we received $11,792.40 per capita from Uncle Sam to build roads and other infrastructure, run our schools, pay wages, and produce and maintain other public goods. Even if you subtract the $2,917.90 that was everyone's share of how much federal spending exceeded IRS revenue, each South Dakotan still came out ahead $2,805.10, which just about covers our paltry state and local tax burden.

Schaff touts this federally funded fiscal conservatism as a sign of the superiority of red states over blue states on state budget policy. But that contention falls apart when you consider the extent to which our state budget relies on federal revenue. According to 2010 Census data, federal sources made up 38.5% of South Dakota state revenues. Only two states, both red, are bigger moochers, Louisiana (40.9%) and Mississippi (41.2%).

Compare those numbers to the national average of Uncle Sam kicking in 27.3% of state kitties. Based on the 2008 Obama–McCain vote, 19 out of 22 red states relied on federal funding to prop up their state budgets to a greater extent than the national average. 21 out of 28 blue states took less federal money as a share of their state budgets than the national average.

Now my numbers are coming from pre-Daugaard budgets. Dr. Schaff will contend that he is praising the glorious fiscal austerity rung in by Governor Daugaard. So let's look at this year's South Dakota budget:

  • Total Expenditures: $4,006,310,307.
  • Total Federal Funding: $1,754,052,061
  • Federal Percentage of South Dakota Budget: 43.8%.

It's easy to bark austerity when Governor Daugaard is just letting Uncle Sam pick up more of our tab.

Yet even with that inordinately large federal subsidy, South Dakota still isn't meeting its own needs. Dr. Schaff himself admits it:

Still, the state does have some priorities that have been neglected. Our roads are in terrible state of repair. Tuition at our public universities have soared as the university system softened cuts to its own budget by passing on much of the cost to students. And our teachers remain underpaid [Schaff, 2012.11.22].

So here's Dr. Schaff's "red state model" in a nutshell:

  1. Run your state on federal handouts.
  2. Run it poorly, letting basic services and infrastructure crumble.
  3. Pretend you're better than everyone else.

Red is blue; war is peace, ignorance is strength. Red state collapse? You betcha, Larry!