Most Federally Dependent States – A Complete Rundown

16.02.2021
Milena

Some US states have a low federal dependency and pay more in federal taxes than the amount they receive in government aid. Other states, however, heavily depend on federal contracts, grants, and different types of assistance. In those cases, federal funding represents a significant share of the state’s income.

Would you like to learn the difference between donor and subsidized states? Scroll down to discover the most federally dependent states in various categories. Learn which states have the most welfare users, where most federal funding goes, and more.

What Does It Mean for a State to Be Federally Dependent?

A federally dependent state receives massive funding from the federal government. There is no single aspect or figure to quantify that. There are, however, several factors that help us establish where states rank on the list below:

  • Federal funding versus income taxes – focuses on the federal taxes paid by state vs received. States that receive much more money than they contribute are taker states that depend on government funding. This includes the amount received in grants, contracts, and assistance programs.
  • Gross domestic product per capita – this aspect represents the state’s purchasing power per person. It is derived by dividing the state’s GDP by its population. The higher the GDP per capita, the more developed the state. Consequently, it depends less on government funds.
  • Total funding and federal funding per resident – how much a state receives tells volumes about its governmental dependency. The amount of federal funding per resident gives a better perspective.
  • Share of benefits recipients – the states that receive the most federal aid depend on federal support the most. One way of establishing their ranking is by their share of benefits recipients. US states with higher percentages of recipients rank higher on the list.
  • Federal contracts, grants, and jobs – states where many employees work for the government are also heavily dependent on the government. Some states further get indirect cash inflow through contracts and grants.

Each factor affects the rankings and represents a different type of federal dependency. So, we will look at each for a full picture of how much and in what way US states depend on government money.

Federal Funding vs. State Income

One way to discover the most federally subsidized states is to compare state income versus total aid. It’s also essential not to overlook the amount of federal aid per resident. In the table below, we have also included two other critical criteria – funding received per dollar paid in taxes and the share of benefits recipients.

Here are some key points from the data included in the table that gives stats on federal aid by state:

  • Virginia receives the highest funding per resident of $10,301.
  • Connecticut doesn’t get anything in federal funding per resident. In fact, the state goes in the negative with -$4,000.
  • California tops the list of states that receive the most federal aid with funding of $436.10 billion.
  • Wyoming gets the least in federal assistance, or only $7.10 billion.
  • For each US dollar paid in taxes, residents of New Mexico get 2.34 dollars in federal assistance.
  • Massachusetts receives 0.83 dollars in federal aid for every dollar paid in taxes.
  • New Mexico residents represent 17.40% of benefits recipients.
  • Both North Dakota and Wyoming have the lowest share of benefits recipients or 6.30% each.

These key takeaways show that Connecticut, Wyoming, and Massachusetts are one of the primary US donor states. New Mexico, Virginia, and California meanwhile are among the most federally subsidized states.

StateState Income(Billions)Federal Funding(Billions)Federal Funding per ResidentFunding per dollarBenefits Recipients
Alabama$33.12$65.80$6,6941.9914.00%
Alaska$7.77$13.00$7,0481.6710.80%
Arizona$51.72$82.80$4,4301.6010.80%
Arkansas$19.86$35.10$5,0801.7711.80%
California$435,63$436.10$121.008.90%
Colorado$57.99$57.50-$950.997.60%
Connecticut$55.48$41.10-$4,0000.7412.00%
Delaware$8.76$11.50$2,8921.3210.40%
Florida$191.76$237.70$2,1871.2413.60%
Georgia$81.03$104.50$2,2531.2912.60%
Hawaii$12.40$19.90$5,2701.6110.70%
Idaho$11.56$17.50$3,4281.519.70%
Illinois$136.40$131.80-$3640.9712.90%
Indiana$52.05$67.80$2,3591.309.30%
Iowa$26.44$29.90$1,1051.139.60%
Kansas$25.52$31.30$1,9831.237.70%
Kentucky$30.07$70.80$9,1452.3514.10%
Louisiana$34.28$52.00$3,7851.5216.40%
Maine$9.99$17.40$5,5721.7412.80%
Maryland$68.53$105.10$6,0351.5310.30%
Massachusetts$94.80$78.70-$2,3430.8311.70%
Michigan$83.71$108.40$2,4741.2913.10%
Minnesota$59.05$64.40$9591.097.80%
Mississippi$17.22$37.80$6,8802.1915.30%
Missouri$48.12$72.30$3,9491.5011.00%
Montana$8.23$12.20$3,8081.499.40%
Nebraska$18.05$17.70-$1640.988.30%
Nevada$25.25$28.70$1,1401.1412.20%
New Hampshire$15.30$15.00-$2340.987.00%
New Jersey$119.00$97.7-$2,3680.828.90%
New Mexico$13.52$31.70$8,6922.3417.40%
New York$256.18$220.60-$1,7920.8614.80%
North Carolina$78.58$113.10$3,3581.4412.30%
North Dakota$8.43$7.90-$7200.946.30%
Ohio$93.62$125.70$2,7501.3413.20%
Oklahoma$29.38$45.10$3,9861.5313.20%
Oregon$35.41$45.70$2,4771.2915.40%
Pennsylvania$126.41$155.80$2,2991.2312.90%
Rhode Island$10.23$12.60$2,2281.2315.40%
South Carolina$34.57$59.70$5,0081.7312.30
South Dakota$8.02$9.30$1,4091.158.90%
Tennessee$52.16$76.30$3,5911.4613.50%
Texas$260.39$269.00$3041.0312.00%
Utah$22.97$23.90$2961.046.80%
Vermont$5.64$8.00$3,7411.4111.50%
Virginia$89.53$176.80$10,3011.978.10%
Washington$81.89$80.50-$1840.9812.30%
West Virginia$11.32$24.60$7,2832.1716.80%
Wisconsin$52.30$55.40$5361.0610.60%
Wyoming$6.73$7.10$6701.066.30%

States That Receive the Most Welfare

In addition to the total amount of federal funding, there are a few other criteria at play too. In this section, we will focus on one of them – the share that federal aid represents of each state’s revenue. 

We will further cover the various types of assistance to determine which states benefit the most from programs like Medicaid and SNAP. The American government spends approximately $668 billion annually on more than 120 welfare programs. Most funds go to several programs focused on providing healthcare, food, and housing, according to US welfare statistics and facts.

Here are the key figures regarding the states most dependent on welfare and those that do great even without federal funding:

  • Montana is the most dependent on federal aid, with government assistance accounting for 46.1% of the state’s revenue. Wyoming follows with a federal aid share of 44.5%.
  • Federal aid represents only 20.7% of the Hawaii state revenue, placing the jurisdiction in the best position. Virginia comes in second with a share of slightly higher 21.1%.
  • Wyoming and Utah have the lowest number of SNAP recipients per capita or respective 4,466 and 5,133.
  • New Mexico has 21,459 food stamp users per capita. Louisiana comes in next with 17,293 recipients per 100k. So, these two are the American states with most welfare recipients.
  • Wyoming has a total Medicaid and CHIP enrollment of only 54,254 people, while North Dakota comes in second with 90,107 participants.
  • California has 11,686,020 residents enrolled in these programs. That’s significantly higher than the 6,518,631 participants from the runner-up New York.
  • Massachusetts and Minnesota have the highest weekly unemployment benefits of $742 and $682, respectively.
  • Mississippi, Arizona, and Louisiana unemployment benefit recipients can get a maximum of $235, $240, and $247 a week.
  • California gets a total TANF and MOE support of $6.59 billion, followed by New York’s $5.38 billion. These two are the US states that receive the most government assistance in this category.
  • Wyoming and North Dakota receive the least funding in TANF and MOE of $23 million and $43 million, respectively.

California and New York are also the states with the most investigations, according to American welfare fraud stats.

StateFederal Aid as Share of General RevenueSNAP Recipients per 100K ResidentsMedicaid and CHIP EnrollmentMax. Weekly Unemployment BenefitsTotal TANF and MOE Assistance$ in Millions
Alabama36.8%14,674910,330$265183.461
Alaska39.3%9,940220,341$37092.786
Arizona43.1%10,9321,705,679$240334.222
Arkansas37.2%11,580841,102$451165.175
California30.7%10,16611,686,020$4506,593.846
Colorado30%7,6141,281,754$568381.154
Connecticut27%10,221858,543$598498.362
Delaware28.1%12,511247,349$330116.543
D.C.N/A15,605257,622$425289.659
Florida32.8%12,8404,158,022$275941.562
Georgia34.3%12,8981,805,884$330490.146
Hawaii20.7%10,946328,899$551198.708
Idaho30.7%7,943273,379$41049.547
Illinois28.5%14,0072,795,938$6131,143.599
Indiana38%8,5751,448,488$390414.873
Iowa29.4%9,689692,777$548211.506
Kansas23.3%6,817370,030$474165.480
Kentucky38.9%11,2531,209,759$415261.549
Louisiana43.7%17,2931,357,279$247225.516
Maine34.3%11,657256,762$410117.038
Maryland31.2%10,1071,313,070$430500.347
Massachusetts28.7%11,0171,562,812$7421,095.319
Michigan33.1%11,4162,278,391$3621,403.556
Minnesota26%7,0491,027,314$683563.170
Mississippi43.3%14,743610,098$235134.797
Missouri37.7%11,035840,660$320415.466
Montana46.1%9,834271,095$48759.420
Nebraska30.9%8,139240,741$392104.154
Nevada32.6%13,600631,512$427103.135
New Hampshire33.2%5,383175,951$42784.327
New Jersey28.7%7,6521,695,610$6771,364.843
New Mexico40.6%21,459729,156$425246.666
New York35.9%13,2176,518,631$4305,388.252
North Carolina30.5%13,7682,026,282$350597.221
North Dakota26.8%6,34090,107$63343.127
Ohio33.9%11,7802,647,784$5871,132.292
Oklahoma333.8%14,678776,432$505146.702
Oregon32.8%13,756980,671$590276.435
Pennsylvania35%13,6132,929,719$5731,154.808
Rhode Island31.8%13,967301,635$566167.654
South Carolina31.9%11,3701,034,415$326164.761
South Dakota34.8%8,834115,930$34532.639
Tennessee37.7%12,9161,455,253$275138.426
Texas32.6%11,5114,177,283$493862.428
Utah24.2%5,133306,281$496118.861
Vermont33%10,730154,309$45893.342
Virginia21.1%8,1081,306,710$378278.950
Washington29.2%10,4651,710,518$6811,058.746
West Virginia38.1%17,155528,005$424127.074
Wisconsin28.3%10,3901,031,118$370581.091
Wyoming44.5%4,46654,245$47123.628

Dependency on Government Business by State

Aside from the federal welfare spending by state, there is another way of dependency common among the most federally subsidized states, namely, the government’s contribution to a state’s business and employment.

Here, we take a look at each state’s gross domestic product. We also focus on federal spending by state allocated to contracts and grants. Finally, we offer data on the percentage of the workforce employed by the government. This is, after all, another way of pouring federal money right into state accounts.

  • California pays the highest federal taxes by state and also has the highest GDP of $3.18 billion. Texas is next with a GDP of $1.91 billion. These two have similar rankings when federal taxes and spending by state are compared.
  • Vermont and Wyoming have the worst GDPs of $35.27 million and $39.79 million, respectively.
  • Texas and Virginia get the most funding in federal contracts of respective $56.1 billion and $55.7 billion.
  • Vermont receives only $286 million in government contracts, while Wyoming gets about $401 million.
  • The leaders in receiving federal grants are California with $106 billion and New York with $83 billion.
  • Wyoming and Vermont get only $1.6 billion and $2.4 billion in government grants, once again at the bottom.
  • Over 10% of Maryland’s workforce is employed by the government, making the jurisdiction one of the most federally dependent states in this regard. Next comes Virginia with 7.9% of its workforce working for the government.
  • Only 1.3% of the workers in both Minnesota and Michigan work for the government.
StateQ4 2019 GDP in $ MillionsFederal Contracts in BillionsFederal Grants in BillionsWorkforce Employed by Government
Alabama234,054$10.3$11.13.1%
Alaska55,759$1.6$4.86.7%
Arizona372,522$16.4$16.52.4%
Arkansas135,225$1.2$9.42.2%
California3,183,251$50.5$106.31.7%
Colorado396,367$9.0$13.22.9%
Connecticut288,985$23.9$10.31.4%
Delaware76,410$0.670$2.72.5%
D.C.148,231$2.8$9.7/
Florida1,111,378$20.6$38.11.9%
Georgia625,329$12.2$19.72.7%
Hawaii98,536$1.9$3.46.8%
Idaho82,265$2.8$3.42.7%
Illinois908,913$9.7$28.81.6%
Indiana381,733$3.6$17.41.5%
Iowa197,172$2.0$6.61.4%
Kansas175,703$2.4$4.92.3%
Kentucky217,564$9.3$14.92.3%
Louisiana267,051$2.5$15.51.9%
Maine68,441$2.3$4.41.9%
Maryland434,312$36.7$15.010.1%
Massachusetts604,208$13.5$25.51.6%
Michigan548,567$6.0$26.71.3%
Minnesota385,907$2.3$15.51.3%
Mississippi120,429$3.3$8.83.0%
Missouri336,816$9.9$13.02.2%
Montana52,948$0.607$4.53.5%
Nebraska129,098$0.829$4.11.9%
Nevada180,406$2.5$6.42.3%
New Hampshire89,836$1.9$2.82.1%
New Jersey652,412$6.6$22.41.6%
New Mexico105,263$9.7$8.66.1%
New York1,751,674$10.6$83.11.5%
North Carolina596,383$6.1$23.12.0%
North Dakota57,400$0.538$2.52.8%
Ohio706,764$7.2$31.51.6%
Oklahoma207,381$3.6$9.14.2%
Oregon255,418$1.4$11.61.6%
Pennsylvania824,603$15.8$34.31.9%
Rhode Island64,441$0.832$3.92.6%
South Carolina249,958$5.8$10.32.2%
South Dakota54,057$1.1$2.52.6%
Tennessee385,741$8.3$14.82.1%
Texas1,918,065$56.1$61.12.1%
Utah192,013$2.1$6.12.8%
Vermont35,271$0.286$2.42.4%
Virginia561,846$55.7$19.37.9%
Washington610,488$13.3$20.23.1%
West Virginia78,507$1.9$5.53.6%
Wisconsin351,922$3.9$13.01.2%
Wyoming39,794$0.401$1.63.3%

Which States Pay the Most Federal Taxes?

In 2017, California, New York, Texas, Florida, and Illinois paid the highest amount in federal taxes by state. California paid $234.49 billion, followed by New York with $140.51 billion, and Texas with $133.41 billion. Florida and Illinois contributed $116.97 billion and $67.180 billion.

California is also that state which receives the highest federal funding and has the most Medicaid participants in the US. New York is the second state with the most Medicaid users. Other than that, all the jurisdictions mentioned above have reasonable rankings when comparing states by federal aid funding vs taxes paid.

Do Red States Receive More Welfare?

Red states are more federally dependent states than blue states. Blue states, however, underperformed in other aspects. Below, we’ll analyze the leaders in each category and see whether red or blue states benefit the most. Please note that the categorization is based on the 2016 presidential election results.

Federal Aid by State

  • Wyoming (R), North Dakota (R), and Vermont (B) get the most in total federal funding.
  • Alabama (R), Alaska (R), and Arizona (R) get the most in federal funding per resident.
  • New Mexico (B), West Virginia (R), and Louisiana (R) have the highest share of benefits recipients.

In this category, the reds dominate as the most federally dependent states. Out of the nine states leading in the most funding, most funding per resident, and most benefits users, only two are blue. Democrat states like New York, California, and Illinois are among those that pay the most in federal taxes. So, it would seem that blue states subsidize red states.

Government Assistance Programs by State

  • California (B), Texas (R), and Florida (R) have the highest number of total SNAP participants.
  • Wyoming (R), Utah (R), and New Hampshire (B) have the most food stamps recipients per capita.
  • California (B), New York (B), and Texas (R) have the highest Medicaid and CHIP enrollment.
  • Massachusetts (B), Minnesota (B), Washington (B) have the highest max unemployment benefits.
  • Montana (R), Wyoming (R), and Louisiana (R) have the highest federal aid as a share of state revenue rates.

Republican states are in a worse position again when it comes to states that receive the most welfare. Still, the situation is a bit more balanced, with eight out of 15 states boasting the red color. Democrat states like California and New York lead in the max unemployment benefits. These two are, however, leading tax donor states too. So, they contribute as much as they take.

Government Contracts, Grants, and Jobs

  • Texas (R), Virginia (R), and California (B) get the most money through federal contracts.
  • California (B), New York (B), and Texas (R) receive the most funds through federal grants.
  • Maryland (B), Virginia (R), and New Mexico (B) have the highest share of government jobs.

In this category, blue states seem to get more from the government. Republican states meanwhile lead the way in contracts received, while Democrat states get the highest funding through grants.

The Bottom Line

The United States has a division of donor states vs subsidized states. The first pay the most in federal taxes, while the latter spend more than they contribute.

Some of the most federally dependent states include Wyoming, California, and New Mexico. Each of these leads in a different category, like benefits users, SNAP participants, or Medicaid enrollment. Wyoming, however, doesn’t get lots of federal business, unlike Virginia and Texas.

Still, this concept goes beyond who gets the most federal funding by state. There are many other factors in play, and that’s why the situation in every state must be individually analyzed.

References: World Population ReviewRockefeller Institute of GovernmentFASWorld Population ReviewWorld Population ReviewWorld Population ReviewTax FoundationMoney RatesSmartadvisor MatchPolitical Maps, Federal Schedules, USA Spending

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