Top 5 States That Rely Most on Federal Aid

By Michael W. Chapman | January 10, 2019 | 2:34pm EST
U.S. currency. (YouTube)

( -- In a new report on how much federal aid goes into state budgets, the Tax Foundation found that "33 percent of all state revenues consisted of federal grants-in-aid" but Mississippi's budget held the largest percentage: 43.3%. Virginia's budget held the lowest percentage, 21.1% in federal aid.

The data presented were from fiscal year 2016, the latest information available. 

As the Tax Foundation explained, "Federal aid is allocated to states for a variety of purposes, primarily to supplement state funding for programs or projects deemed to be of national interest. Some federal aid is awarded in the form of competitive grants, while other federal funding is allocated according to formulas established by law."

(Tax Foundation)

"States that rely heavily on federal grants-in-aid tend to have sizable low-income populations and relatively lower tax revenues," said the Tax Foundation.  "On the other hand, states with relatively lower reliance on federal aid tend to collect more in taxes and have smaller low-income populations, although some exceptions exist."

The top 5 states whose general revenue funds comprised the highest percentages in federal aid are, 

Mississipi, 43.4% of budget is federal aid

Louisiana, 42.7%

New Mexico, 41.2%

Arizona, 41.2%

Kentucky, 40.9%

The top 5 states whose general revenue funds comprised the lowest percentages in federal aid are, 

Virginia, 21.1%

Hawaii, 22.7%

Kansas, 23%

North Dakota, 23.8%

Utah, 25.7%

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