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How Much Do States Rely on Federal Funding?

There's a wide range of dependence across and within the states. Here's a state-by-state look at how welfare, education and roads could be impacted by the next budget that Trump signs.

Trump Budget
Someone holds a copy of President Trump's fiscal 2018 budget at the U.S. Government Publishing Office's plant.
(AP/Carolyn Kaster)
As Congress debates the budget, states are eagerly waiting to hear how it will affect them.

Updated data from the Census Bureau's 2015 Annual Survey of State Government Finances published last week indicates that federal aid made up nearly a third of all states’ general fund revenues in fiscal year 2015. The single largest line items in states’ budgets include federal funding for transportation, Medicaid and other social assistance programs.

The survey, which provides a detailed portrait of how states generate and spend money, suggests states' reliance on federal money varies greatly. Even larger discrepancies exist across individual areas of state government.

We've compiled data below showing how much of each state's budget is tied to federal aid across select major spending areas. 

 

State Budgets Most Reliant on Federal Funding Overall

Neighboring Louisiana and Mississippi are generally among the top recipients in federal aid year after year. That was true again in 2015: Federal intergovernmental revenues accounted for about 42 percent of their general fund revenues, the top shares nationally.

Other states whose budgets are most dependent on the feds include Arizona (40 percent), Kentucky (40 percent), New Mexico (39 percent), Montana (39 percent) and Oregon (39 percent). That’s roughly twice as much as the least-reliant state budgets, which include North Dakota (18 percent) and Virginia (22 percent).



 
Federal Share of FY15 General Revenue

NOTE: Figures only reflect funds allocated directly to states, not those routed to localities and other recipients.
 

Public Welfare

Public welfare is the single largest source of federal funding, primarily driven by Medicaid costs.

Federal aid made up nearly two-thirds (64 percent) of states’ public welfare general expenditures, according to the survey data. The share was highest -- more than 90 percent -- in New Mexico and Ohio. By comparison, federal revenues accounted for slightly less than half of public welfare spending in Colorado, Massachusetts, Rhode Island and Virginia.

The Census Bureau’s classification of public welfare funding includes Medicaid, Temporary Assistance for Needy Families (TANF), child welfare services and a range of other assistance programs mostly for low-income individuals. It excludes school nutrition programs and the Special Supplemental Nutrition Program for Women, Infants and Children (WIC).



State Federal Share Public Welfare Spending Public Welfare Federal Revenues
Rhode Island 49.3% $2,672,489,000 $1,316,742,000
Wyoming 50.5% $795,434,000 $401,450,000
Montana 78.8% $1,545,178,000 $1,217,284,000
South Carolina 65.5% $7,398,432,000 $4,847,911,000
Vermont 73.5% $1,728,547,000 $1,269,932,000
Georgia 56.6% $12,197,038,000 $6,902,178,000
Missouri 73.6% $8,399,342,000 $6,180,315,000
Tennessee 59.7% $11,420,314,000 $6,822,232,000
South Dakota 58.7% $1,037,395,000 $608,848,000
Colorado 48.8% $7,910,755,000 $3,857,129,000
Idaho 57.5% $2,304,073,000 $1,324,117,000
Alabama 75.1% $6,872,757,000 $5,164,076,000
Indiana 65.6% $11,501,010,000 $7,542,372,000
Delaware 51.0% $2,323,157,000 $1,184,125,000
Nevada 72.7% $3,779,343,000 $2,748,276,000
Louisiana 69.1% $8,365,742,000 $5,780,223,000
Arizona 86.8% $10,440,648,000 $9,059,993,000
Alaska 54.0% $2,113,211,000 $1,141,234,000
Texas 73.1% $35,961,689,000 $26,290,465,000
Nebraska 82.0% $2,626,032,000 $2,154,251,000
Connecticut 62.4% $7,677,002,000 $4,787,763,000
California 55.7% $109,031,702,000 $60,694,512,000
New York 64.5% $58,344,171,000 $37,629,674,000
New Mexico 91.6% $5,610,951,000 $5,140,995,000
Mississippi 86.8% $6,228,236,000 $5,408,268,000
Utah 74.8% $3,245,210,000 $2,427,673,000
Arkansas 70.1% $6,642,465,000 $4,655,923,000
New Hampshire 53.1% $2,112,515,000 $1,122,360,000
Michigan 70.5% $18,410,125,000 $12,972,450,000
Maine 64.0% $2,917,467,000 $1,867,891,000
Hawaii 59.9% $2,480,019,000 $1,485,789,000
United States 63.9% $608,987,553,000 $389,307,449,000
Ohio 92.2% $19,421,982,000 $17,915,292,000
West Virginia 72.2% $4,393,172,000 $3,173,209,000
Wisconsin 58.2% $10,227,923,000 $5,948,916,000
Kansas 53.4% $3,986,056,000 $2,127,138,000
North Carolina 76.3% $13,568,795,000 $10,354,841,000
Washington 66.1% $11,477,978,000 $7,589,903,000
Oregon 83.5% $10,039,321,000 $8,378,913,000
Oklahoma 55.4% $6,502,889,000 $3,599,992,000
Florida 61.1% $25,913,158,000 $15,825,260,000
Kentucky 68.4% $10,918,824,000 $7,463,883,000
Maryland 55.7% $12,121,427,000 $6,756,623,000
Illinois 54.0% $22,671,203,000 $12,242,232,000
Pennsylvania 65.2% $24,749,412,000 $16,140,303,000
North Dakota 63.5% $1,335,551,000 $848,243,000
Iowa 65.8% $6,223,107,000 $4,093,966,000
Virginia 48.5% $11,248,106,000 $5,451,007,000
New Jersey 55.5% $18,197,283,000 $10,090,972,000
Massachusetts 48.7% $18,790,185,000 $9,153,886,000
Minnesota 62.1% $13,108,732,000 $8,146,419,000

SOURCE: Governing calculations of federal intergovernmental revenues, general expenditure data from 2015 Annual Survey of State Government Finances; U.S. Census Bureau
 

Education

Education-related programs make up the next-largest type of federal funding. Top sources include money for Head Start, the National School Lunch Program and language assistance initiatives.

When it comes to total general education expenditures, federal funds nationally accounted for just 13 percent in fiscal 2015, as schools are primarily funded by various state and local taxes.

The share was highest (20 percent) for Wyoming’s budget, followed by South Dakota, Georgia and Florida. Six other states relied on federal funding for less than one-tenth of education spending.

State Federal Share Education Spending Education Federal Revenues
Rhode Island 14.5% $2,052,694,000 $296,890,000
Wyoming 20.4% $2,010,117,000 $410,903,000
Montana 14.7% $1,997,896,000 $294,532,000
South Carolina 14.6% $9,225,130,000 $1,342,846,000
Vermont 9.9% $2,534,073,000 $249,850,000
Georgia 17.2% $17,864,354,000 $3,080,558,000
Missouri 12.9% $9,629,687,000 $1,246,865,000
Tennessee 14.6% $10,260,470,000 $1,496,360,000
South Dakota 17.6% $1,316,817,000 $232,018,000
Colorado 12.8% $10,824,727,000 $1,386,125,000
Idaho 13.9% $2,817,674,000 $391,733,000
Alabama 14.7% $10,786,908,000 $1,588,588,000
Indiana 11.0% $14,865,806,000 $1,631,577,000
Delaware 7.4% $3,025,239,000 $222,475,000
Nevada 9.8% $4,738,862,000 $465,049,000
Louisiana 15.0% $8,885,638,000 $1,331,730,000
Arizona 16.2% $10,458,097,000 $1,696,780,000
Alaska 10.5% $2,703,433,000 $284,122,000
Texas 14.7% $52,321,669,000 $7,665,192,000
Nebraska 5.1% $3,611,552,000 $184,677,000
Connecticut 7.5% $7,874,421,000 $588,293,000
California 11.4% $90,546,647,000 $10,292,071,000
New York 11.4% $42,460,614,000 $4,853,398,000
New Mexico 13.0% $5,825,058,000 $759,228,000
Mississippi 15.4% $5,791,535,000 $893,251,000
Utah 11.9% $7,371,045,000 $875,233,000
Arkansas 10.2% $7,638,610,000 $780,424,000
New Hampshire 16.4% $1,331,713,000 $217,794,000
Michigan 13.1% $24,211,552,000 $3,177,358,000
Maine 12.8% $2,081,683,000 $267,127,000
Hawaii 16.7% $3,232,483,000 $539,767,000
United States 13.0% $637,519,768,000 $82,643,630,000
Ohio 11.2% $22,348,752,000 $2,503,862,000
West Virginia 12.3% $4,154,300,000 $511,623,000
Wisconsin 12.5% $11,757,644,000 $1,465,387,000
Kansas 10.4% $6,999,820,000 $728,737,000
North Carolina 12.7% $20,020,108,000 $2,534,197,000
Washington 12.9% $17,087,813,000 $2,200,937,000
Oregon 16.0% $8,292,900,000 $1,330,134,000
Oklahoma 12.9% $7,735,783,000 $997,717,000
Florida 17.0% $25,347,156,000 $4,299,958,000
Kentucky 12.7% $9,681,710,000 $1,229,269,000
Maryland 14.3% $12,145,924,000 $1,739,863,000
Illinois 17.0% $17,895,093,000 $3,034,490,000
Pennsylvania 13.6% $23,442,663,000 $3,176,999,000
North Dakota 11.2% $2,280,513,000 $255,864,000
Iowa 15.1% $7,118,769,000 $1,072,332,000
Virginia 12.0% $15,834,457,000 $1,896,794,000
New Jersey 11.5% $17,582,765,000 $2,018,127,000
Massachusetts 11.6% $13,192,076,000 $1,524,788,000
Minnesota 9.6% $14,305,318,000 $1,379,738,000

SOURCE: Governing calculations of federal intergovernmental revenues, general expenditure data from 2015 Annual Survey of State Government Finances; U.S. Census Bureau
 

Roads

The federal government distributed $41.6 billion in roadway infrastructure and highway safety funding to states in fiscal 2015.

Federal aid made up for more than half of what the Census categorizes as “highway” spending in eight states, led by Rhode Island and Wyoming. Meanwhile, it made up roughly one-fifth of spending in Massachusetts and Minnesota.

Most of this funding comes from the Federal Highway Trust Fund. It doesn’t include grants related to transit systems.

State Federal Share Highways Spending Highways Federal Revenue
Rhode Island 83.1% $317,439,000 $263,792,000
Wyoming 67.3% $543,113,000 $365,555,000
Montana 64.4% $761,719,000 $490,914,000
South Carolina 59.0% $1,259,022,000 $742,746,000
Vermont 58.0% $501,722,000 $291,115,000
Georgia 56.6% $1,956,088,000 $1,107,473,000
Missouri 54.1% $1,470,145,000 $795,329,000
Tennessee 53.0% $1,572,450,000 $833,626,000
South Dakota 49.6% $605,572,000 $300,170,000
Colorado 49.5% $1,722,621,000 $853,174,000
Idaho 49.1% $710,207,000 $349,034,000
Alabama 47.1% $1,810,319,000 $853,118,000
Indiana 46.0% $2,581,632,000 $1,187,701,000
Delaware 45.6% $513,072,000 $234,092,000
Nevada 45.6% $620,668,000 $283,110,000
Louisiana 44.6% $1,611,669,000 $718,029,000
Arizona 43.7% $1,957,688,000 $856,003,000
Alaska 42.6% $1,271,514,000 $541,080,000
Texas 40.3% $8,445,801,000 $3,407,201,000
Nebraska 40.1% $800,388,000 $321,027,000
Connecticut 39.2% $1,247,190,000 $488,401,000
California 38.6% $10,529,860,000 $4,060,307,000
New York 38.3% $5,322,067,000 $2,039,589,000
New Mexico 38.0% $1,041,561,000 $395,695,000
Mississippi 37.8% $1,327,966,000 $501,986,000
Utah 37.5% $905,259,000 $339,412,000
Arkansas 36.7% $1,443,062,000 $529,683,000
New Hampshire 35.6% $505,452,000 $180,010,000
Michigan 35.2% $2,532,511,000 $891,844,000
Maine 34.7% $643,931,000 $223,691,000
Hawaii 34.6% $549,795,000 $190,488,000
United States 34.4% $120,940,700,000 $41,642,979,000
Ohio 33.4% $4,015,891,000 $1,339,893,000
West Virginia 32.9% $1,065,058,000 $349,985,000
Wisconsin 32.2% $2,509,882,000 $807,946,000
Kansas 32.1% $1,298,356,000 $417,144,000
North Carolina 30.2% $3,719,766,000 $1,124,923,000
Washington 29.9% $2,884,151,000 $862,872,000
Oregon 29.7% $1,360,696,000 $404,611,000
Oklahoma 28.6% $2,101,894,000 $602,143,000
Florida 28.5% $7,600,460,000 $2,168,765,000
Kentucky 26.8% $2,732,030,000 $731,390,000
Maryland 25.5% $2,521,117,000 $643,040,000
Illinois 25.3% $6,925,080,000 $1,751,333,000
Pennsylvania 24.0% $7,746,006,000 $1,859,775,000
North Dakota 23.7% $1,224,581,000 $290,223,000
Iowa 23.6% $2,076,439,000 $491,007,000
Virginia 23.6% $4,900,426,000 $1,158,542,000
New Jersey 22.7% $3,375,735,000 $766,937,000
Massachusetts 21.5% $2,827,045,000 $606,698,000
Minnesota 21.2% $2,974,584,000 $630,357,000

SOURCE: Governing calculations of federal intergovernmental revenues, general expenditure data from 2015 Annual Survey of State Government Finances; U.S. Census Bureau
 

Mike Maciag is Data Editor for GOVERNING.
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