Top 10 States That Rely Most on Federal Aid

By Michael W. Chapman | January 6, 2016 | 2:57pm EST




(AP photo.) 

( – A new report by the Tax Foundation shows what percentage of each state’s revenue comes from the federal government through federal grants-in-aid, a sum that in total has reached $600 billion a year.

Federal grants-in-aid to state and local governments include payments for Medicaid, education funding assistance, infrastructure project support, housing grants, and other payments, according to the Tax Foundation.

For fiscal year 2013, which is the latest year for complete data, the Tax Foundation found that Mississippi got 42.9% of its general revenue from the federal government, and Louisiana came in second with 41.9% of its revenue from the U.S. Treasury.

The 10 states receiving the most in federal aid as a percentage of their general revenue, in order, were:

  1. Mississippi,  42.9% federal aid as percentage of general revenue
  2. Louisiana,  41.9%
  3. Tennessee, 39.5%
  4. South Dakota, 39.0%
  5. Missouri,  38.2%
  6. Montana, 37.4%
  7. Georgia, 37.3%
  8. New Mexico, 36.6%
  9. Alabama, 36.1%
  10. Maine, 35.3%



At the other end, the 10 states receiving the least in federal aid as a percentage of their general revenues were:

40. Illinois, 25.9% 

41. New Jersey, 25.5%

42. California, 25.0%

43. Nevada, 25.0%

44. Kansas, 24.9%

45. Delaware, 24.8%

46. Connecticut, 23.4%

47. Virginia, 22.9%

48. Alaska, 22.4%

49. Hawaii, 21.5%

50. North Dakota, 19.0%

“States with heavy reliance on federal grants-in-aid tend to have a combination of modest tax collections (reducing the denominator) and sizable low income populations (correlating with greater per capita reliance on Medicaid, housing assistance, and other low income and poverty relief programming, and with a greater share of federal education support),” said the Tax Foundation.

States with lower percentages of federal aid “tend to have higher per capita tax collections (growing the denominator) and populations with lesser reliance on federal assistance (shrinking the numerator),” said the Tax Foundation.

In its calculations, the Tax Foundation noted that “general revenues includes state taxes and fees, but excludes utility revenue, liquor store revenue, and insurance trust revenue.”

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