16 States Getting the Most Money from the Federal Government

Is your state on the list of those that count heavily on federal income tax dollars?
Updated May 2, 2024
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Every U.S. state counts on funds from the federal government, but some states depend on that cash more than others.

SmartAsset took a look at several factors to determine which states rely the most on funding from the federal government. It included:

  • The share of state government revenue that comes from the federal government
  • The ratio of federal funding to income taxes paid
  • The percentage of workers the federal government employs in the state
  • The ratio of median earnings for federal workers to median earnings for private workers

Who made the list? Following are the 16 states that SmartAsset determined were the most reliant on federal dollars. Perhaps you can learn how these states get their hands on federal cash and use those techniques to find lazy ways to add to your own bottom line.

16. Kentucky

Wirestock Creators/Adobe aerial scene of night long exposure of a bridge over water with cars

The home of the Kentucky Derby is also home to plenty of federal dollars.

Precisely 44.55% of Kentucky’s budget relies on revenue from the federal government, and 2.14% of workers in the state are federally employed.

15. South Dakota

Jacob/Adobe aerial view of Sioux Falls South Dakota at sunset

South Dakota’s budget is based on 50.93% of its income coming from federal dollars, making it one of four states that rely on federal funds to make up more than 50% of their state budgets.

A total of 3.14% of employees in the state rely on federal jobs for income.

14. Vermont

Craig Zerbe/Adobe golden fall colors in Vermont Countryside farm

Vermont’s workforce includes 2.27% of employees who work in federal jobs based in the state. 

The state also pulls in enough cash from the federal government to cover 43.55% of its state budget.

13. Arizona

John/Adobe Phoenix Arizona skyline

In Arizona, 2.54% of residents work in federal government positions in the state. 

The state also relies on federal funds for 47.44% of its total statewide budget.

12. Rhode Island

thomas/Adobe Rhode Island Cove

Rhode Island may be small, but it has a decent-sized reliance on federal funds. 

Federal tax dollars make up 43.72% of the state’s budget, and 2.36% of Rhode Island’s workforce holds a federal job.

11. Delaware

K.A/Adobe Ocean sunrise and silhouette of lighthouse

Delaware has a lower federal share of its total revenue coming from federal funds compared to other states, with 38.79% of the budget reliant on federal dollars.

However, the state also has 2.42% of its workforce in federal jobs.

10. Montana

David/Adobe Billings Montana Cityscape streaming lights

Montana has 3.54% of its workforce in federal jobs, a much higher percentage than most states.

In addition, 46.58% of the state budget depends on federal tax dollars.

9. Wyoming

Jacob/Adobe Rock Springs Wyoming

Wyoming’s state budget relies on federal funds to the tune of 56.43%. That is tops in the nation.

The ratio of federal funding to income taxes paid is 1.36.

7. Maine (tie)

SeanPavonePhoto/Adobe Augusta Maine USA

Maine’s state budget gets 43.27% of its funding from federal dollars.

Of the state’s workforce, 2.31% work for the federal government.

7. Louisiana (tie)

Anthony/Adobe Monroe Louisiana

Louisiana relies heavily on U.S. government funds, with 52.27% of its budget coming from federal dollars. Only Wyoming relies more on federal funds as a percentage of its budget.

The ratio of federal funding to income taxes paid is 1.6.

6. Idaho

SeanPavonePhoto/Adobe Boise Idaho USA Downtown

Idaho’s budget includes 41.08% of funds that come from the federal government.

The Gem State also has 2.75% of its workforce employed in federal government positions.

5. Alaska

Rocky Grimes/Adobe Lion's Head along the Glenn Highway in Alaska

Alaska is one of four states with more than 50% of its state revenue coming from the federal government, with 50.83% of the state’s budget coming from the feds.

The state also has one of the highest percentages of federal employees, with 6.83% of residents receiving a paycheck from the U.S. government. Only Maryland, Virginia, and Hawaii have more.

4. Alabama

SeanPavonePhoto/Adobe Birmingham Alabama USA Cityscape

Alabama’s workforce includes 3.33% of employees who collect federal government paychecks.

The state’s budget includes 41.2% of funding from federal funds from the U.S. government.

3. Mississippi

SeanPavonePhoto/Adobe Jackson Mississippi USA skyline

Mississippi picks up 47.31% of its state budget from federal funding.

The ratio of federal funding to income taxes paid is 2.53, putting it in second place, behind Arkansas (3.39).

2. New Mexico

SeanPavonePhoto/Adobe Albuquerque New Mexico USA downtown cityscape

Among New Mexico workers, 6.06% work for the federal government.

The state also relies on federal funding for 41.8% of its state budget.

1. West Virginia

SeanPavonePhoto/Adobe Charleston West Virginia USA

West Virginia’s workforce includes 4.08% of employees working for the federal government.

In addition, 45.16% of the state budget comes from federal funds.

Bottom line

ozerkina/Adobe US National Capitol in Washington DC

Some states rely more on federal government revenue and jobs than others. Like those of us who struggle to move beyond living paycheck to paycheck, these states appear wedded to federal government funding just to keep things working.

Of course, it is usually better to stand on your own two feet than to depend on outside sources for financial help. 

So, rather than waiting for help from the federal government or anyone else, take matters into your own hands by finding ways to generate more income.

Author Details

Jenny Cohen Jenny Cohen is a freelance writer who has covered a bit of everything, from finance to sports to her favorite TV shows. Her work has been featured in The Wall Street Journal, USA Today, and FoxSports.com.

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