According to a recent report, four of the southern states are among the top five nationwide when it comes to reliance on federal funding.
Alaska stands out as the most “federally dependent” state in the Union, according to WalletHub. The southern states follow closely behind in positions two through five: Kentucky, West Virginia, Mississippi, and South Carolina.
WalletHub compiled the
ranking
“Just to highlight that not every state receives an equal amount of federal funding,” stated Chip Lupo, a writer and analyst from the personal finance website.
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The report holds relevance considering the current circumstances.
Trump
The administration’s latest move to halt federal funds for initiatives not aligned with the Republican platform. This decision was unveiled recently.
January memo
, was later revoked. It is now the focus of a
ongoing court battle
.
In the meantime, congressional budget proposals advocate for substantial reductions in federal financial support. This could lead states to face “extremely difficult choices” regarding Medicaid and various other initiatives, as stated by reports.
report
from the left-leaning Center for Law and Social Policy.
These forecasts mirror alerts issued by Democrats in Congress. However, Republicans argue against this viewpoint.
Medicaid and other state-level programs remain secure.
.
Up to half of state budgets are financed with federal funds.
Between 18% and 50% of state budgets come from federal funds, varying by state, as per reports.
data
According to the National Association of State Budget Officers, roughly one-third of state funds typically originate from federal contributions.
Millions of people across all states depend on federal assistance, which includes 72 million Medicaid beneficiaries, 30 million students who receive subsidized meals, and 43 million individuals receiving food stamps, as reported.
report
from the progressive Center for American Progress.
States get financial assistance from the federal government for various reasons, including disaster response and funding educational enhancements, transportation upgrades, and other infrastructural requirements.
WalletHub assessed each state’s dependence on the federal government through three criteria: the percentage of state revenues derived from federal funds; the proportion of the state’s employment in federal positions; and the amount of federal funding received per dollar contributed in federal taxes.
As it turns out, many of the states that heavily rely on federal aid tend to be more rural, with sparse populations and “require federal support for their infrastructure,” according to Lupo.
Some states, such as Alaska, possess extensive areas of land owned by the federal government. In contrast, others, like South Carolina, have comparatively smaller portions of such lands.
military populations
.
Other entities boast influential, long-serving congresspeople who have directed federal funds to benefit their constituents.
“For instance, Kentucky has Mitch McConnell; he’s become an institution in Congress,” Lupo commented about the longtime Republican senator.
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The five states most reliant on federal assistance
The top five states with the highest federal dependency, listed sequentially, are as follows:
Alaska
Over fifty percent of Alaska’s income originates from the federal government. This is partly due to the difficulty of sustaining infrastructure across a vast area characterized by harsh climates and a limited populace. Additional elements contributing to this reliance consist of the state’s susceptibility to natural calamities as well as its strategic importance for military purposes.
About 5% of Alaska’s labor force works for the federal government. This percentage is higher compared to other states where it typically falls between 1% and 3%.
Kentucky
Kentucky gets $3.35 from federal funds for each dollar its residents contribute as federal taxes. Approximately 46% of Kentucky’s revenue comes from federal financing, which is among the highest percentages nationwide.
West Virginia
In this state, for each dollar paid in federal taxes by residents, they receive back approximately $2.72 from federal funds. The federal assistance constitutes around 45% of West Virginia’s total revenues. Additionally, about 3.7% of the local workforce finds employment with the federal government, which ranks among the top figures across the country.
Mississippi
In Mississippi, federal funding accounts for 45% of the state’s revenue. For each dollar the state pays in federal taxes, it receives $2.34 from the federal government.
South Carolina
Among U.S. states, South Carolina tops the list with the highest proportion of federal funds received.
—
$3.42 — for each federal tax dollar collected.
Politically speaking, WalletHub discovered that red states exhibit greater federal dependency compared to blue states. On average, Republican-leaning states rank 21st out of all 50 states, whereas Democratic-leaning states have an average ranking of 32nd.
Blue states depend less on federal money.
As reported by WalletHub, New Jersey, which leans Democratic, stands out as the state with the lowest dependence on federal funding. Just 1.2 percent of its residents hold jobs with the federal government, and federal money accounts for just 30 percent of the state’s revenue.
Among all states, California takes the second spot for being less reliant on federal funds. Only 28% of the state’s income comes from federal funding, and just 1.4% of its population is employed by the federal government.
The narrative has been revised to correct a typographical error.
The article initially appeared on USA TODAY:
Up to 50% of these states’ income comes from the federal government.
