States receive federal aid for many reasons, from providing relief during natural disasters and health crises to funding improvements in education, transportation, infrastructure, healthcare, and more. Some states receive much larger aid packages than others.
WalletHub, a personal finance website, compared the 50 states on three key metrics: the return on taxes paid to the federal government, the share of federal jobs, and federal funding as a share of state revenue.
“Regardless of whether the distribution of federal funds is fair or not, living in one of the most federally dependent states can be beneficial for residents,” Chip Lupo, WalletHub analyst, said. For every dollar residents of the top states pay in taxes, they get several dollars back in federal funding, which often leads to higher-quality infrastructure, education, public health and more.”
The most federally dependent states, according to the WalletHub report, are:
- Alaska
- Kentucky
- West Virginia
- Mississippi
- South Carolina
- New Mexico
- Louisiana
- Arizona
- Indiana
- Alabama
All but New Mexico and Indiana are Red states.
The least federally dependent states are:
- Iowa
- Colorado
- Illinois
- Washington
- Kansas
- Utah
- Massachusetts
- Delaware
- California
- New Jersey
All but Kansas and Utah are Blue states.
Alaska
Alaska, pictured above, is the most federally dependent state, as more than 50 percent of the state’s revenue comes from federal funding, the WalletHub analysis shows. Some reasons why Alaska gets a lot of federal dollars include the difficulty of maintaining infrastructure in a big state with harsh weather and a small population, plus Alaska’s richness in natural resources, its vulnerability to disasters, and its defensive importance.
Alaska also has a lot of federal jobs – nearly 5 percent of the state’s workforce is employed by the federal government. For comparison, the share for most states is between 1 percent and 3 percent.
Finally, Alaska has a good return on the taxes that its residents pay to the federal government. For every $1 that residents pay in taxes, the state receives $2.36 in federal funding, more than double their investment.
Kentucky
Kentucky is the second-most federally dependent state, in large part because it receives a huge amount of federal funding compared to the taxes that residents pay, according to the WalletHub analysis. For every $1 paid in taxes, Kentucky gets $3.35 in federal funding. About half of the other states get less than $1 in federal funding for every tax dollar.
Federal funding makes up a large share of Kentucky’s revenue as well, at over 46 percent, among the highest in the country. Kentucky doesn’t have quite as many federal jobs as other states, however. About 1.8 percent of the state’s residents are employed by the federal government, which puts Kentucky around the middle of the 50 states for that metric.
West Virginia
West Virginia ranks third when it comes to dependence on the federal government, its residents get $2.72 in federal funding for every $1 they pay in taxes, WalletHub found.
Federal funding makes up a large share of West Virginia’s revenue as well, at over 45 percent and more than 3.7 percent of West Virginia’s workforce is employed by the federal government. Both of these rates are among the highest in the country.
See the map below for a ranking of all states on the federal aid they receive:
