Victoria will be "dudded" out of enough money to pay for 9300 teachers or 7700 police officers if the Commonwealth pushes ahead with proposed changes to the nation's GST carve-up, the state government says.
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The $972 million that would be lost each year could also pay for 100 e-class trams, or 150 VLocity train carriages.
An interim report into the GST carve-up proposes reform of the distribution system for the money raised by the tax which would see Victoria lose an extra 6c out of every dollar of GST revenue collected in the state.
The estimates supplied to federal Treasurer Scott Morrison, who is reportedly keen to push ahead with reform, have Victoria's GST payout falling from 93¢ of every dollar collected to 87¢, equating to a loss of about $972 million for Victoria.
But in response to the state government's concerns, Mr Morrison's office stressed that the commission's suggestion were only at the proposal stage and that no final decision on reform had been made.
The state's Department of Treasury and Finance has analysed what the loss of the money would mean for state services that affect the lives of Victorians.
In the health portfolio, $972 million would pay for about 8700 nurses, 66,000 radiotherapy treatments, 62,000 hip replacements, 65,000 knee replacements or 8000 liver transplants, according to the Treasury analysis.
In education, the money could fund 9300 teachers, about 70 new primary schools or 30 new high schools.
State Treasurer Tim Pallas says Victoria already has legitimate complaints about the present system, arguing the state was short changed to the tune of $6 billion on national infrastructure funding.
Mr Pallas also says Victoria receives only about 10 per cent of Australia's infrastructure spending, despite having 25 per cent of the nation's population.
He says the state missed out on about $420 million in GST revenue after its population growth exceeded official expectations between 2011 and 2016.
"The Turnbull Government is already dudding Victoria on infrastructure funding, and we won't let them short-change Victorians on GST as well," Mr Pallas told Fairfax Media.
"We're building the roads, rail and schools Victoria needs as it grows, and it's time for the Turnbull Government to help us rather than using Victoria as budgetary ballast.
"Victoria continues to lead the charge on tax reform, abolishing stamp duty for first home buyers, reducing payroll tax for regional businesses, and introducing a stamp duty surcharge on residential real estate for foreign buyers. "
In response to Mr Pallas's comments, Mr Morrison's office said that no reform model had been decided upon and that the scenarios envisaged in the Productivity Commission report were for "illustrative purposes only".
A spokesman also there would be more consultation between the Commonwealth and the states and territories before a final report is presented to the Treasurer by January 31.
