Which States Are Most Reliant on Federal Aid?

The Tax Foundation illustrates which states’ budgets benefit the most (and least) from federal aid.

The latest x Foundation takes a look at how much each state relies on assistance from the federal government.

The latest data are from fiscal year 2016, the most recent year of data available. States with the greatest reliance on federal aid were Mississippi, Louisiana, New Mexico, Arizona, and Kentucky. States where federal aid comprised the smallest share of state general revenue were Virginia, Hawaii, Kansas, North Dakota, and Utah.

Last year, states that topped the list were Louisiana, Mississippi and Arizona while Hawaii, Virginia and North Dakota were at the bottom, so the top and bottom states are mostly unchanged.

The Tax Foundation described some of the differences in the states and reasons for discrepancies, noting:

States that rely heavily on federal grants-in-aid tend to have sizable low-income populations and relatively lower tax revenues. States with relatively lower reliance on federal aid tend to collect more in taxes and have smaller low-income populations, although some exceptions exist. Notably, although North Dakota and Alaska impose relatively modest taxes on residents, both are resource-rich states that export much of their tax burdens through severance taxes, yet their reliance on federal aid differs greatly.

The map below shows the full breakout of how states rank in terms of their reliance on aid from the federal government.US map showing a ranking of each state in terms of the percentage of federal aid that makes up its budget

About the Author

Ian Smith is one of the co-founders of FedSmith.com. He enjoys writing about current topics that affect the federal workforce.