Proportion of state government general revenues from the federal government (2000-2020)

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Budget Policy

All states receive aid from the federal government, usually in the form of grants. Below, you can find a quantitative overview of the proportion of state government general revenues that come from federal outlays.

The US Census Bureau compiles annual data on states’ revenues from taxes, higher education tuition, hospital fees, and from both state and local governments. The total amount of federal outlays to each state is divided by the state's overall revenue to calculate the federal share of each state’s revenue.[1][2] The Pew Charitable Trusts’ summary of federal outlays to the states (presented below) uses a broader definition of “state general revenue” than the Census Bureau’s definition, as Pew’s includes all state revenue sources except for state-owned liquor stores, utilities, and insurance trust funds.[3]

HIGHLIGHTS
  • In fiscal year 2020, the average percentage of general revenues that the states brought in from federal aid was 35.9%--over one-third of their general revenues.
  • Between fiscal years 2015 and 2020, Wyoming saw the greatest increase in state revenue from federal overlays, rising from 33.5% to 56.3% of its general revenues.
  • From 2000 to 2020, the total share of federal outlays among all fifty states was 31.0% of their general revenue.

    • Proportion of state general revenue from federal aid, 2000-2020

    All states receive aid from the federal government, usually in the form of grants. Between fiscal years 2000 and 2020, the average proportion of federal funds in state budgets was 31.0%. In fiscal year 2020, the average percentage of general revenues that the states brought in from federal aid was 35.9% (more than one-third of their general revenues), which was the highest point in the 20 years tracked.

    The primary source data of the federal share of states’ revenue come from the US Census Bureau’s “Annual Survey of State Government Finances” and “Annual Survey of State & Local Government Finances.” These surveys compile annual data on states’ revenues from taxes, higher education tuition, hospital fees, and from both state and local governments. The total amount of federal outlays to the states is divided by the states’ total revenue, and the result is the federal share of each state’s revenue.[3]


    State-by-state trends in proportion of state general revenue from federal aid, 2000-2020

    In fiscal year 2020, the top five states by percentage of state revenues from federal outlays were Wyoming (56.30% of state revenues came from federal outlays), Alaska (50.70%), Louisiana (50.60%), South Dakota (50.20%), Mississippi (47.10%). The bottom five states were Hawaii (24.40% of state revenues came from federal outlays), New Jersey (27.20%), Utah (27.30%), Kansas (27.60%), and Virginia 27.80%.

    The biggest increase between fiscal years 2015 and 2020 was in Wyoming, which received 56.3% of its general revenues from federal outlays in 2020, up from 33.5% in 2015. Between 2015 and 2020, every state saw an increase in their percentage of federal outlays.

    Between fiscal years 2000 through 2020, the 50-state share of federal outlays averaged 31.0%, with 35.9% (FY2020) on the high end, and 26.3% (FY2000) on the low end.

    States where federal outlays were the primary source of income

    Federal outlays accounted for the largest source of state revenue, instead of tax dollars, in 17 states for fiscal year 2020:

    • Alabama
    • Alaska
    • Arizona
    • Kentucky
    • Louisiana
    • Mississippi
    • Missouri
    • Montana
    • New Hampshire
    • New Mexico
    • Oregon
    • Rhode Island
    • South Carolina
    • South Dakota
    • Texas
    • West Virginia
    • Wyoming

    See also

    External links

    Tax Foundation publishes "Facts & Figures: How Does Your State Compare?," which includes tables of Sources of State & Local Tax Collections, and Federal Aid as a Percentage of State General Revenue.

    Footnotes

    1. ↑ U.S. Census Bureau, "Annual Survey of State and Local Government Finances," accessed July 30, 2020
    2. ↑ U.S. Census Bureau, "Annual Survey of State Government Finances," accessed July 30, 2020
    3. ↑ 3.0 3.1 The Pew Charitable Trusts, "Fiscal 50: State Trends and Analysis," April 28, 2020
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