Where is $100 not $100?
According to the independent tax policy research organization Tax Foundation, that would be everywhere in the United States. In a recent study, Tax Foundation discovered the state where $100 is actually closest in value to $100 was Illinois, where a Benjamin is actually worth $99.40 on average.
That’s good news and bad news.
The good news is the Land of Lincoln is not the state with the lowest value for your money. That distinction belongs to Hawaii where $100 is only worth an average of $85.32. Worse yet is Washington, D.C., where the same bill is worth only $84.60.
The bad news is there are several states where $100 goes farther than here in Illinois. In fact, if you want more bang for your buck, cross any stateline from Illinois; every state bordering the Land of Lincoln carries more value for your money. Iowa will net you nearly $112 worth of goods, while Missouri is near the top of the value line. Spend $100 in St. Louis, and it will buy more than $14 than on State Street in Chicago. Your money goes the furthest in Mississippi where $100 has the buying power of $155.74.
The difference is pricing has several different influences, including supply and demand and proximity to more expensive goods, but there are two more factors which have probably the most influence: your paycheck and your state’s population.
The higher the average paycheck in the state is, the less your average dollar will buy. The largest paychecks in the country circle around New York City, Washington, D.C., and Los Angeles. As you might guess, New York, New Jersey and California round out the five places in the country where your money is worth the least. Maryland, which surrounds Washington, D.C., has the purchase power of $89.85 per $100.
Meanwhile, states with lower average incomes and low population densities give your money more purchasing power. Arkansas, Alabama and South Dakota are among the five states where your Benjamin goes farthest.
A one hundred dollar bill also under-performs in Alaska, although not to the extent of Hawaii. Shopping in Juneau will get $93.37 in goods. The cost of transporting goods to those states stands as the chief denominator in those cases.
More than merely anecdotal information, the data is an indication of how different the economy is from state to state, according to Alan Cole and Lyman Stone, authors of the study. Federal assistance programs which assume a dollar is worth the same no matter which state it’s spent in can create a situation where the total assistance in Hawaii will not be much help, but the same amount would discourage work in Mississippi, where $100 is worth more than $30 more.