Each state in America relies on Uncle Sam’s wallet in one way or another, but have you ever wondered which ones rely on it the most? Today, we’re looking at 18 states that rely on federal funds the most, how much they depend on them, and the percentage of federal funds they receive. You might be surprised at the results.
Vermont
This data comes from a MoneyGeek study. Of all the states, Vermont depends the most on federal aid, with a dependency score of 100 and 35.83% of its revenue coming from federal funds. The state only gets back $0.11 for every tax dollar, yet it relies heavily on Uncle Sam to keep its services running smoothly.
West Virginia
In second place is West Virginia, with a dependency score of 98.4. This red state gets $0.26 back for every tax dollar, and 34.07% of its revenue comes from federal funds. The state government relies on these funds to keep its infrastructure and public services running, which is pretty difficult in such a mountainous area.
Alaska
You might be surprised to see Alaska so high on this list, as you’d think the state’s oil reserves would keep it independent. Unfortunately, its sheer wilderness means it has a dependency score of 98.2, and federal funds make up 33.90% of its revenue. The state has no other way to support its more remote communities, especially since it only gets $0.27 for every tax dollar.
New Mexico
New Mexico has the highest returns from federal funds, with $0.40 back for every tax dollar. 32.06% of this blue state’s revenue comes from the federal government, which is why it has a 96.3 dependency score. Without this funding, the state would likely struggle to maintain its economy and public services.
Mississippi
Mississippi might have a lot of charm, but that doesn’t pay the bills, which is why this red state has a dependency score of 94.7. With each tax dollar, it makes a return of $0.20 and the federal government is responsible for 32.41% of its revenue. Federal aid is quite important for this red state, as officials are using it to address the state’s infamously high poverty rates.
Louisiana
Louisiana’s probably most famous for having so much great food, but perhaps it should be known for its dependency on Uncle Sam. It has a score of 94.5, and federal funds make up 33.38%, although it gets a measly $0.02 back for each tax dollar. The state government mostly uses this money to manage the economic problems that come from all those natural disasters.
South Dakota
Since it’s the home of Mount Rushmore, you might think that the tourist industry would keep South Dakota afloat, but sadly not. It has a dependency score of 94.3, and 32.96% of its revenue is from the federal government. The state uses this money to support local rural and agricultural communities and receives $0.07 for every tax dollar.
Montana
Montana’s dependency score is 93.5, and federal aid makes up 32.13 of its revenue, while the local government receives $0.14 for every dollar in taxes. That’s pretty surprising, given the small population. Even so, these funds are essential for the state, particularly its large rural areas, where resources are stretched thin.
Wyoming
Despite all those minerals, Wyoming, with a score of 95, depends heavily on the federal government. It gets $0.09 for every dollar in taxes, which contributes to 31.87% of its budget. This is mostly due to the state’s small population, which relies heavily on federal dollars to help balance the books.
Arizona
The appeal of the Grand Canyon isn’t enough for Arizona since it has a dependency score of 89.1, which makes up 30.07% of the state’s revenue. Arizona has a tax revenue of $0.08 for each dollar, which is important as the state continues to expand. Local governments mostly use these funds to support infrastructure and public services.
Rhode Island
Although it’s the smallest state, Rhode Island relies heavily on federal funds, which account for 29.75% of its revenue. This has given the state a dependency score of 87.8, although it only gets $0.01 on every tax dollar. Without this funding, it’s unlikely that Rhode Island could keep its public services running.
Delaware
Federal funds are responsible for 29.24% of Delawere’s budget, which is why it has a dependency score of 87.0. Unfortunately, it receives rather little back for each dollar it pays in taxes at $0.03. Even so, these federal dollars are important for helping the state create economic projects for its residents.
District of Columbia
Since it’s the capital, it’s no surprise that the District of Columbia relies on federal funding. These make up 27.65% of its budget, and it receives $0.21 back for every tax dollar, giving it a dependency score of 86.1. The state government uses this funding to keep public safety and city services running smoothly in the nation’s capital.
Maine
Maine depends on the federal government for 27.27% of its revenue to support its rural areas and aging restaurants. It receives $0.08 back for each tax dollar and has an 85.8 score. Maine’s biggest problem is its healthcare system, and the state government spends a lot of federal funding on this.
Arkansas
Arkansas’s economy is driven mostly by agriculture, and it benefits quite a bit from federal aid. With a dependency score of 85.3, federal funds contribute 28.17% to the state’s funds, and it gets back $0.05 in tax revenue. This is important for helping the state’s rural communities, as 18.7% of them are below the poverty line.
Idaho
Idaho’s population and public services are growing, and federal aid is a big part of that growth. Its dependency score is 83.5, and it receives $0.09 back for every dollar in taxes. 26.94% of its revenue comes from these federal funds, which the local government puts back into supporting the agricultural community.
Alabama
Alabama’s returns from federal funding are quite low at $0.14 for every tax dollar, yet federal funds still contribute 26.61% of its revenue. This has given the state a dependency score of 83.4. The state spends most of this funding on improving its transportation networks and community services.
New Hampshire
Although New Hampshire doesn’t rely on the federal government as much as other states, it still needs it to fund 25.17% of its revenue. These funds are important to help the state fund its local programs, especially in healthcare and education. It receives $0.10 in tax dollar revenue and has a score of 80.4.
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