This is not a failure of the "red" states, it is a failure of the system.
The current tax structure encourages states to grab money anytime they can. Actually, it benefits legislators to get this money for their states.
On top of that, the demographics of the situation need to be examined. California is one of the largest economies in the world, let alone in the United States. Since they are rich, they are penalized by the "progressive" tax structure of the US. States like Alabama, Mississippi, and DC are (on the flip side) recipients, because they are relatively poor.
Should States that are represented by the "Red" remove themselves from the tax trough and truly live according to their principles?Wouldn't that mean we would get rid of the income redistribution that we currently have? I am sure the worthies in California and New York would be horrified if their money was re-distributed back to wealthy states like California and New York

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The system is set up as a free for all grab for money. The operation of government has litle to do with individual philosophies. It is about getting re-elected. Getting re-elected (unfortunately) often means getting some pork for your state.
In summary: "Don't hate the player, hate the game."