Most Federally Dependent States – A Complete Rundown

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.

 

State State Income

(Billions)

Federal Funding

(Billions)

Federal Funding per Resident Funding per dollar Benefits Recipients
Alabama $33.12 $65.80 $6,694 1.99 14.00%
Alaska $7.77 $13.00 $7,048 1.67 10.80%
Arizona $51.72 $82.80 $4,430 1.60 10.80%
Arkansas $19.86 $35.10 $5,080 1.77 11.80%
California $435,63 $436.10 $12 1.00 8.90%
Colorado $57.99 $57.50 -$95 0.99 7.60%
Connecticut $55.48 $41.10 -$4,000 0.74 12.00%
Delaware $8.76 $11.50 $2,892 1.32 10.40%
Florida $191.76 $237.70 $2,187 1.24 13.60%
Georgia $81.03 $104.50 $2,253 1.29 12.60%
Hawaii $12.40 $19.90 $5,270 1.61 10.70%
Idaho $11.56 $17.50 $3,428 1.51 9.70%
Illinois $136.40 $131.80 -$364 0.97 12.90%
Indiana $52.05 $67.80 $2,359 1.30 9.30%
Iowa $26.44 $29.90 $1,105 1.13 9.60%
Kansas $25.52 $31.30 $1,983 1.23 7.70%
Kentucky $30.07 $70.80 $9,145 2.35 14.10%
Louisiana $34.28 $52.00 $3,785 1.52 16.40%
Maine $9.99 $17.40 $5,572 1.74 12.80%
Maryland $68.53 $105.10 $6,035 1.53 10.30%
Massachusetts $94.80 $78.70 -$2,343 0.83 11.70%
Michigan $83.71 $108.40 $2,474 1.29 13.10%
Minnesota $59.05 $64.40 $959 1.09 7.80%
Mississippi $17.22 $37.80 $6,880 2.19 15.30%
Missouri $48.12 $72.30 $3,949 1.50 11.00%
Montana $8.23 $12.20 $3,808 1.49 9.40%
Nebraska $18.05 $17.70 -$164 0.98 8.30%
Nevada $25.25 $28.70 $1,140 1.14 12.20%
New Hampshire $15.30 $15.00 -$234 0.98 7.00%
New Jersey $119.00 $97.7 -$2,368 0.82 8.90%
New Mexico $13.52 $31.70 $8,692 2.34 17.40%
New York $256.18 $220.60 -$1,792 0.86 14.80%
North Carolina $78.58 $113.10 $3,358 1.44 12.30%
North Dakota $8.43 $7.90 -$720 0.94 6.30%
Ohio $93.62 $125.70 $2,750 1.34 13.20%
Oklahoma $29.38 $45.10 $3,986 1.53 13.20%
Oregon $35.41 $45.70 $2,477 1.29 15.40%
Pennsylvania $126.41 $155.80 $2,299 1.23 12.90%
Rhode Island $10.23 $12.60 $2,228 1.23 15.40%
South Carolina $34.57 $59.70 $5,008 1.73 12.30
South Dakota $8.02 $9.30 $1,409 1.15 8.90%
Tennessee $52.16 $76.30 $3,591 1.46 13.50%
Texas $260.39 $269.00 $304 1.03 12.00%
Utah $22.97 $23.90 $296 1.04 6.80%
Vermont $5.64 $8.00 $3,741 1.41 11.50%
Virginia $89.53 $176.80 $10,301 1.97 8.10%
Washington $81.89 $80.50 -$184 0.98 12.30%
West Virginia $11.32 $24.60 $7,283 2.17 16.80%
Wisconsin $52.30 $55.40 $536 1.06 10.60%
Wyoming $6.73 $7.10 $670 1.06 6.30%

 

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.

 

State Federal Aid as Share of General Revenue SNAP Recipients per 100K Residents Medicaid and CHIP Enrollment Max. Weekly Unemployment Benefits Total TANF and MOE Assistance

$ in Millions

Alabama 36.8% 14,674 910,330 $265 183.461
Alaska 39.3% 9,940 220,341 $370 92.786
Arizona 43.1% 10,932 1,705,679 $240 334.222
Arkansas 37.2% 11,580 841,102 $451 165.175
California 30.7% 10,166 11,686,020 $450 6,593.846
Colorado 30% 7,614 1,281,754 $568 381.154
Connecticut 27% 10,221 858,543 $598 498.362
Delaware 28.1% 12,511 247,349 $330 116.543
D.C. N/A 15,605 257,622 $425 289.659
Florida 32.8% 12,840 4,158,022 $275 941.562
Georgia 34.3% 12,898 1,805,884 $330 490.146
Hawaii 20.7% 10,946 328,899 $551 198.708
Idaho 30.7% 7,943 273,379 $410 49.547
Illinois 28.5% 14,007 2,795,938 $613 1,143.599
Indiana 38% 8,575 1,448,488 $390 414.873
Iowa 29.4% 9,689 692,777 $548 211.506
Kansas 23.3% 6,817 370,030 $474 165.480
Kentucky 38.9% 11,253 1,209,759 $415 261.549
Louisiana 43.7% 17,293 1,357,279 $247 225.516
Maine 34.3% 11,657 256,762 $410 117.038
Maryland 31.2% 10,107 1,313,070 $430 500.347
Massachusetts 28.7% 11,017 1,562,812 $742 1,095.319
Michigan 33.1% 11,416 2,278,391 $362 1,403.556
Minnesota 26% 7,049 1,027,314 $683 563.170
Mississippi 43.3% 14,743 610,098 $235 134.797
Missouri 37.7% 11,035 840,660 $320 415.466
Montana 46.1% 9,834 271,095 $487 59.420
Nebraska 30.9% 8,139 240,741 $392 104.154
Nevada 32.6% 13,600 631,512 $427 103.135
New Hampshire 33.2% 5,383 175,951 $427 84.327
New Jersey 28.7% 7,652 1,695,610 $677 1,364.843
New Mexico 40.6% 21,459 729,156 $425 246.666
New York 35.9% 13,217 6,518,631 $430 5,388.252
North Carolina 30.5% 13,768 2,026,282 $350 597.221
North Dakota 26.8% 6,340 90,107 $633 43.127
Ohio 33.9% 11,780 2,647,784 $587 1,132.292
Oklahoma 333.8% 14,678 776,432 $505 146.702
Oregon 32.8% 13,756 980,671 $590 276.435
Pennsylvania 35% 13,613 2,929,719 $573 1,154.808
Rhode Island 31.8% 13,967 301,635 $566 167.654
South Carolina 31.9% 11,370 1,034,415 $326 164.761
South Dakota 34.8% 8,834 115,930 $345 32.639
Tennessee 37.7% 12,916 1,455,253 $275 138.426
Texas 32.6% 11,511 4,177,283 $493 862.428
Utah 24.2% 5,133 306,281 $496 118.861
Vermont 33% 10,730 154,309 $458 93.342
Virginia 21.1% 8,108 1,306,710 $378 278.950
Washington 29.2% 10,465 1,710,518 $681 1,058.746
West Virginia 38.1% 17,155 528,005 $424 127.074
Wisconsin 28.3% 10,390 1,031,118 $370 581.091
Wyoming 44.5% 4,466 54,245 $471 23.628

 

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.

 

State Q4 2019 GDP in $ Millions Federal Contracts in Billions Federal Grants in Billions Workforce Employed by Government
Alabama 234,054 $10.3 $11.1 3.1%
Alaska 55,759 $1.6 $4.8 6.7%
Arizona 372,522 $16.4 $16.5 2.4%
Arkansas 135,225 $1.2 $9.4 2.2%
California 3,183,251 $50.5 $106.3 1.7%
Colorado 396,367 $9.0 $13.2 2.9%
Connecticut 288,985 $23.9 $10.3 1.4%
Delaware 76,410 $0.670 $2.7 2.5%
D.C. 148,231 $2.8 $9.7 /
Florida 1,111,378 $20.6 $38.1 1.9%
Georgia 625,329 $12.2 $19.7 2.7%
Hawaii 98,536 $1.9 $3.4 6.8%
Idaho 82,265 $2.8 $3.4 2.7%
Illinois 908,913 $9.7 $28.8 1.6%
Indiana 381,733 $3.6 $17.4 1.5%
Iowa 197,172 $2.0 $6.6 1.4%
Kansas 175,703 $2.4 $4.9 2.3%
Kentucky 217,564 $9.3 $14.9 2.3%
Louisiana 267,051 $2.5 $15.5 1.9%
Maine 68,441 $2.3 $4.4 1.9%
Maryland 434,312 $36.7 $15.0 10.1%
Massachusetts 604,208 $13.5 $25.5 1.6%
Michigan 548,567 $6.0 $26.7 1.3%
Minnesota 385,907 $2.3 $15.5 1.3%
Mississippi 120,429 $3.3 $8.8 3.0%
Missouri 336,816 $9.9 $13.0 2.2%
Montana 52,948 $0.607 $4.5 3.5%
Nebraska 129,098 $0.829 $4.1 1.9%
Nevada 180,406 $2.5 $6.4 2.3%
New Hampshire 89,836 $1.9 $2.8 2.1%
New Jersey 652,412 $6.6 $22.4 1.6%
New Mexico 105,263 $9.7 $8.6 6.1%
New York 1,751,674 $10.6 $83.1 1.5%
North Carolina 596,383 $6.1 $23.1 2.0%
North Dakota 57,400 $0.538 $2.5 2.8%
Ohio 706,764 $7.2 $31.5 1.6%
Oklahoma 207,381 $3.6 $9.1 4.2%
Oregon 255,418 $1.4 $11.6 1.6%
Pennsylvania 824,603 $15.8 $34.3 1.9%
Rhode Island 64,441 $0.832 $3.9 2.6%
South Carolina 249,958 $5.8 $10.3 2.2%
South Dakota 54,057 $1.1 $2.5 2.6%
Tennessee 385,741 $8.3 $14.8 2.1%
Texas 1,918,065 $56.1 $61.1 2.1%
Utah 192,013 $2.1 $6.1 2.8%
Vermont 35,271 $0.286 $2.4 2.4%
Virginia 561,846 $55.7 $19.3 7.9%
Washington 610,488 $13.3 $20.2 3.1%
West Virginia 78,507 $1.9 $5.5 3.6%
Wisconsin 351,922 $3.9 $13.0 1.2%
Wyoming 39,794 $0.401 $1.6 3.3%

 

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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