Which States Rely Most on Federal Aid?

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By on March 23, 2020 in Current Events with 0 Comments

The Tax Foundation has released its latest report which ranks states in terms of their reliance on aid from the federal government.

Regarding federal aid to states, the Tax Foundation writes:

Federal aid is allocated to states for a variety of purposes, primarily to supplement state funding for programs or projects deemed to be of national interest, such as Medicaid payments, education funding assistance, infrastructure assistance, and more. Some federal aid is awarded in the form of competitive grants, while other federal funding is given according to formulas established by law. Formula grants usually incorporate factors like population size, poverty statistics, and state matching dollars for distributing federal aid among states. Competitive grants are awarded on a discretionary basis and are more likely to fluctuate from year to year.

The latest data are from fiscal year 2017. States in which federal aid made up the largest percentage of their revenues are Montana (46.1 percent), Wyoming (44.5 percent), Louisiana (43.7 percent), Mississippi (43.3 percent), and Arizona (43.1 percent). At the other end of the list, the states are Hawaii (20.7 percent), Virginia (21.1 percent), Kansas (23.3 percent), Utah (24.2 percent), and Minnesota (26.0 percent).

According to last year’s report from the Tax Foundation, states with the greatest reliance on federal aid were Mississippi, Louisiana, New Mexico, Arizona, and Kentucky.

The map below shows the full breakdown among all the states.

US map showing a ranking of each state in terms of the percentage of federal aid that makes up its budget

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

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