According to the US Census, the following five states topped out the list of states that relied most heavily on federal monies to support state operations. In 2023, 31.8% of Montana’s overall budget consisted of federal funding support. The following states were next in terms of that proportional support: New Mexico with 30.7% of its annual budget; Kentucky at 30.1%; Louisiana at 29.8%; followed by Alaska with 29.0% of its budget supported by federal dollars.
What are these funds used for primarily? In terms of federal grants, healthcare, education, transportation and infrastructure were top areas for funding in these federally dependent states. General purpose operations and public safety also figured high on the list of needs.
Conversely, the states that relied least on federal funds, as a portion of their operating dollars, were Vermont and California. Factors that impact a state’s need or lack of need for funding can include economic growth, public sector employment and unemployment.
As federal funding and public sector jobs are reviewed and evaluated, the impact on these most-supported states will be significant. The impact on grants will include greater need for private funding.
Reference: Which states rely the most on federal aid? | USA Facts; https://www.census.gov/data.html
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