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IMA Tax Policy Blog

Which States Rely the Most on Federal Aid?

From the Tax Foundation . . .

State level taxes may be the most visible source of state government revenues for most taxpayers, but it’s important to remember that while they are important, they are not the only source of state revenue.

State governments also receive a significant amount of aid from the federal government in the form of federal grants-in-aid.

In fiscal year 2014, over 60 percent of federal spending in the states went to benefits payments to individuals, including Social Security and Medicare. Aid is also given to states for education, transportation, housing, agriculture and more. Medicare is the largest grant program and continues to grow.

Federal aid to states as a whole grew 25 percent (adjusted for inflation) from 2005 to 2014.

Check out the map below to see how your state compares.