Most Federally Dependent States – A Complete Rundown

26.11.2022
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 $19,406.
  • Connecticut has the lowest federal funding per resident of $4,152.
  • California tops the list of states that receive the most federal aid with funding of $726.51 billion.
  • Wyoming gets the least in total funding — $12.46 billion.
  • For each US dollar paid in taxes, residents of Kentucky get 3.78 dollars in federal assistance.
  • Connecticut receives 1.29 dollars in federal aid for every dollar paid in taxes.

These key takeaways show that Connecticut, Wyoming, and Massachusetts are some 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 Dollar
Alabama$33.69$96.24$12,4482.86
Alaska$6.91$20.15$18,0512.92
Arizona$57.31$144.65$12,2122.52
Arkansas$19.50$52.15$10,8422.67
California$463.73$726.51$6,6461.54
Colorado$62.99$96.72$5,8431.54
Connecticut$52.10$67.07$4,1521.29
Delaware$9.06$20.73$11,7902.29
Florida$206.27$382.21$8,2021.86
Georgia$85.81$174.19$8,2502.03
Hawaii$12.78$32.00$13,2102.51
Idaho$13.73$30.43$9,0812.22
Illinois$131.10$215.71$6,6041.65
Indiana$52.03$109.58$8,4812.11
Iowa$25.80$50.96$7,8851.97
Kansas$25.17$49.82$8,3911.98
Kentucky$29.85$112.79$18,4073.78
Louisiana$32.42$87.13$11,7462.69
Maine$10.49$28.73$13,3902.74
Maryland$70.18$161.79$14,8312.31
Massachusetts$98.44$152.23$7,6511.55
Michigan$83.74$185.05$10,0532.21
Minnesota$59.62$94.73$6,1521.59
Mississippi$16.98$54.69$12,7363.22
Missouri$48.35$110.99$10,1782.30
Montana$8.73$21.44$11,7152.45
Nebraska$17.56$31.33$7,0231.78
Nevada$27.76$54.75$8,6951.97
New Hampshire$16.00$26.11$7,3371.63
New Jersey$119.92$164.19$4,7661.37
New Mexico$13.91$45.26$14,8053.25
New York$254.04$390.28$6,7441.54
North Carolina$82.87$178.49$9,1602.15
North Dakota$8.10$15.75$9,8251.95
Ohio$92.66$208.55$9,8212.25
Oklahoma$27.59$70.71$10,8932.56
Oregon$38.44$75.44$8,7341.96
Pennsylvania$124.79$257.17$10,1812.06
Rhode Island$10.44$22.78$11,2412.18
South Carolina$37.90$94.79$11,1142.50
South Dakota$7.91$16.86$10,0962.13
Tennessee$54.42$122.60$9,8662.25
Texas$264.93$456.22$6,5631.72
Utah$26.55$42.87$4,9891.61
Vermont$5.76$14.68$13,8692.55
Virginia$91.82$259.32$19,4062.82
Washington$93.63$134.36$5,2851.43
West Virginia$10.97$36.31$14,1243.31
Wisconsin$52.89$95.08$7,1591.80
Wyoming$6.52$12.46$10,2931.91

(Rockefeller Institute of Government, World Population Review)

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 is projected to spend approximately $9.32 trillion in 2022 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:

  • Wyoming is the most dependent on federal aid, with government assistance accounting for 56.30% of the state’s revenue. Alaska follows with a federal aid share of 50.70%.
  • Federal aid represents only 24.40% of the Hawaii state revenue, placing the jurisdiction in the best position. New Jersey comes in second with a share of 27.70%.
  • Wyoming and Utah have the lowest number of SNAP recipients per capita or 4,442 and 5,134, respectively.
  • New Mexico has 21,300 food stamp users per capita. Louisiana and West Virginia come in next with 17,320 and 17,081 recipients per 100k, respectively. So, these three are the American states with the most welfare recipients.
  • Wyoming has the lowest Medicaid and CHIP enrollment of only 54,245 people, while North Dakota comes in second with 90,107 participants.
  • California has 13,881,004 residents enrolled in these programs. That’s significantly higher than the 7,210,643 participants from the runner-up New York.
  • Massachusetts and Washington have the highest weekly unemployment benefits of $974 and $929, respectively.
  • Unemployment benefit recipients from Mississippi can get a maximum of $235, while those from Alabama, Florida, Louisiana, and Tennessee receive $275 each.
  • California gets a total TANF and MOE support of $6.7 billion, followed by New York’s $5.16 billion. These two are the US states that receive the most government assistance in this category.
  • South Dakota and Wyoming receive the least funding in TANF and MOE of $28.9 million and $29.5 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(Millions)
Alabama40.70%14,3761,126,491$275$204.316
Alaska50.70%10,003260,981$370$91.771
Arizona46.90%10,2402,216,371$240$355.567
Arkansas39.60%11,6741,005,799$451$84.129
California31.20%10,27913,881,004$450$6,703.043
Colorado34.10%7,7101,630,445$618$451.957
Connecticut29.90%10,122973,657$649$505.781
Delaware37.60%12,438289,032$400$126.329
D.C.N/AN/A285,811$444$316.355
Florida36.50%13,0704,704,468$275$949.598
Georgia37.10%12,9202,372,690$365$484.290
Hawaii24.40%10,725430,705$648$220.893
Idaho40.80%7,848419,671$448$43.731
Illinois31.90%13,8833,634,280$542$1,157.486
Indiana39.80%8,5281,932,693$390$333.302
Iowa30.00%9,664820,964$481$191.137
Kansas27.60%6,774483,790$488$177.072
Kentucky44.40%11,2401,564,321$552$263.682
Louisiana50.60%17,3201,846,753$275$213.821
Maine42.90%11,512350,493$445$127.485
Maryland33.50%9,9851,632,584$430$545.407
Massachusetts32.40%10,9501,906,436$974$1,151.798
Michigan38.40%11,3732,938,885$362$1,340.566
Minnesota31.00%7,0371,316,213$740$572.564
Mississippi47.10%14,872740,167$235$76.844
Missouri44.60%11,0521,282,993$320$371.236
Montana44.10%9,832311,394$552$48.464
Nebraska37.80%8,110368,348$440$103.896
Nevada33.00%13,701865,597$469$114.112
New Hampshire42.40%5,353240,796$427$80.549
New Jersey27.20%7,3892,129,804$713$1,490.702
New Mexico40.60%21,300874,678$511$305.238
New York37.00%12,8047,210,643$504$5,160.413
North Carolina27.54%12,6512,249,516$350$584.392
North Dakota36.20%6,27890,107$618$39.184
Ohio38.90%11,7262,647,784$530$1,195.884
Oklahoma36.70%14,717776,432$539$144.682
Oregon36.80%13,918980,671$648$245.739
Pennsylvania39.00%13,4462,929,719$594$1,135.026
Rhode Island42.70%13,505301,635$586$154.664
South Carolina37.60%11,5451,034,415$326$166.057
South Dakota50.20%8,967115,930$414$28.937
Tennessee40.00%12,8771,455,253$275$221.788
Texas39.20%11,6484,177,283$549$984.212
Utah27.30%5,134306,281$580$96.684
Vermont43.60%10,493154,309$583$94.735
Virginia27.80%8,1111,306,710$378$299.964
Washington28.70%10,5471,710,518$929$1,056.473
West Virginia44.50%17,081528,005$424$144.529
Wisconsin31.30%10,3191,031,118$370$566.190
Wyoming56.30%4,44254,245$508$29.494

(US Government Spending, Pew Trusts, World Population Review, Medicaid.gov, Saving to Invest, FAS)

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 $3.55 billion. Texas is next with a GDP of $2.35 billion. These two have similar rankings when federal taxes and spending by state are compared.
  • Vermont and Wyoming have the worst GDPs of $40.24 million and $48.04 billion, respectively.
  • Texas and Virginia get the most funding in federal contracts of respective $72 billion and $54.8 billion.
  • Delaware receives only $321 million in government contracts, while Wyoming gets about $388 million.
  • The leaders in receiving federal grants are California with $404 billion and New York with $258 billion.
  • Wyoming and Vermont get only $6.6 billion and $7.4 billion in government grants, once again at the bottom.
  • Nearly 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 7.5% of its workforce working for the government.
  • Only 1.4% of the workers in both Michigan and Minnesota work for the government, while the share in Wisconsin is 1.2%.
StateGDP (Millions)Federal Contracts (Billions)Federal Grants (Billions)Workforce Employed by Government
Alabama$275,396$13.0$56.53.3%
Alaska$64,257$2.3$13.75.9%
Arizona$453,602$16.4$100.32.5%
Arkansas$163,779$1.4$30.61.9%
California$3,558,512$52.1$404.11.8%
Colorado$480,828$12.1$55.62.5%
Connecticut$317,907$18.3$108.71.6%
Delaware$86,673$0.321$10.22.6%
D.C.$160,728$31.1$49.2N/A
Florida$1,371,468$25.6$250.51.9%
Georgia$747,535$11.1$91.12.7%
Hawaii$96,979$2.8$15.76.7%
Idaho$108,438$2.8$17.62.7%
Illinois$1,024,019$12.1$113.31.6%
Indiana$452,422$6.2$161.71.5%
Iowa$230,104$2.5$28.21.6%
Kansas$209,272$2.9$25.42.4%
Kentucky$258,293$11.8$146.72.1%
Louisiana$281,047$3.9$51.62.1%
Maine$83,514$2.4$17.12.5%
Maryland$465,635$36.5$84.09.8%
Massachusetts$679,122$23.8$83.41.6%
Michigan$615,408$6.7$107.41.4%
Minnesota$442,528$2.6$199.41.4%
Mississippi$138,156$4.8$32.13.0%
Missouri$386,397$13.2$73.62.3%
Montana$64,757$0.689$12.33.7%
Nebraska$161,260$1.2$21.41.9%
Nevada$213,410$3.0$26.72.0%
New Hampshire$104,172$1.7$13.02.3%
New Jersey$737,654$8.9$86.11.5%
New Mexico$122,359$11.4$36.56.0%
New York$2,034,912$30.8$258.21.7%
North Carolina$723,163$6.6$95.61.7%
North Dakota$74,745$0.780$69.42.8%
Ohio$817,627$8.3$109.21.8%
Oklahoma$242,303$4.5$41.74.5%
Oregon$294,325$1.7$47.91.8%
Pennsylvania$915,424$17.5$227.41.8%
Rhode Island$70,759$0.921$13.42.7%
South Carolina$292,932$6.6$112.32.3%
South Dakota$67,489$0.624$9.63.1%
Tennessee$469,938$10.7$92.62.2%
Texas$2,354,455$54.8$256.11.9%
Utah$245,831$4.0$24.02.7%
Vermont$40,249$0.393$7.42.3%
Virginia$642,755$72.0$140.07.5%
Washington$717,336$15.5$73.82.7%
West Virginia$96,724$1.48$21.73.5%
Wisconsin$398,850$5.7$94.41.2%
Wyoming$48,044$0.388$6.63.5%

(Moneygeek, Federal Schedules, USA Spending, SmartAsset)

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 $67.18 billion.

California is also the state that 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.

(MoneyRates)

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 2020 presidential election results.

Federal Aid by State

  • California (B), Texas (R), and Florida (R) get the most in total federal funding.
  • Virginia (B), Kentucky (R), and New Mexico (B) get the most in federal funding per resident.

In this category, the blues dominate as the most federally dependent states. Out of the ten states leading in the most funding per resident, four are red. Democrat states like New York, California, and Illinois are among those that pay the most in federal taxes.

Government Assistance Programs by State

  • New Mexico (B), Louisiana (R), and West Virginia (R) 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), Washington (B), and Minnesota (B) have the highest max unemployment benefits.
  • Wyoming (R), Alaska (R), and Louisiana (R) have the highest federal aid as a share of state revenue rates.

Republican states are in a worse position when it comes to states that receive the most welfare, with eight out of the bottom 10 states with the lowest welfare assistance boasting the red color. Democrat states like Massachusetts and Washington lead in the max unemployment benefits. However, these two are also leading tax donor states, so they contribute as much as they take.

Government Contracts, Grants, and Jobs

  • Virginia (B), Texas (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 (B), and Hawaii (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.

(New York Times, MoneyRates)

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 California and New Mexico, with most SNAP participants or Medicaid enrollment, respectively. Wyoming, however, doesn’t get a lot 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: Rockefeller Institute of Government, World Population Review, US Government Spending, Pew Trusts, World Population Review, Medicaid.gov, Saving to Invest, FAS, Moneygeek, Federal Schedules, USA Spending, SmartAsset, MoneyRates, New York Times

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