Most & Least Federally Dependent States (2025)

States receive federal aid for many reasons, from providing relief during natural disasters and health crises to funding improvements in education, transportation, infrastructure, healthcare and more. Some states receive much larger aid packages than others, but it’s not just the dollar amount that matters. It’s important to contextualize the money flowing in by comparing it to things like what percentage of the state’s revenue it makes up and how much the federal government gets back through its taxes on the state’s residents.

In order to find out exactly how big the difference in federal dependence is from state to state, WalletHub compared the 50 states in terms of three key metrics: the return on taxes paid to the federal government, the share of federal jobs, and federal funding as a share of state revenue.

“Regardless of whether the distribution of federal funds is fair or not, living in one of the most federally dependent states can be beneficial for residents. For every dollar residents of the top states pay in taxes, they get several dollars back in federal funding, which often leads to higher-quality infrastructure, education, public health and more.”

Chip Lupo, WalletHub Analyst

Main Findings

Most Federally Dependent States

Notes: *No. 1 = Most Dependent
With the exception of “Total Score,” the columns in the table above depict the relative rank of a state, where a rank of 1 represents the most dependent for that metric.

Amount of Federal Contracts Received (per $ in Federal Taxes Paid)

Lowest

• 1. Delaware
• 2. Wyoming
• 3. Vermont
• 4. North Dakota
• 5. Arkansas

Highest

• 46. Florida
• 47. Maryland
• 48. Texas
• 49. California
• 50. Virginia

Amount of Grants Received (per $ in Federal Taxes Paid)

Lowest

• 1. Wyoming
• 2. North Dakota
• 3. Vermont
• 4. South Dakota
• 5. New Hampshire

Highest

• 46. Florida
• 47. Pennsylvania
• 48. Texas
• 49. New York
• 50. California

Best State vs. Worst State: 71x Difference

Wyoming vs. California

Amount of Other Financial Assistance Received (per $ in Federal Taxes Paid)

Lowest

• 1. Wyoming
• 2. Vermont
• 3. Alaska
• 4. South Dakota
• 5. Delaware

Highest

• 46. Indiana
• 47. Minnesota
• 48. Pennsylvania
• 49. Florida
• 50. California

Best State vs. Worst State: 62x Difference

Wyoming vs. California

Gross Domestic Product (per Capita)

Highest

• 1. New York
• 2. Massachusetts
• 3. Washington
• 4. California
• 5. Connecticut

Lowest

• 46. Kentucky
• 47. Alabama
• 48. Arkansas
• 49. West Virginia
• 50. Mississippi

Best State vs. Worst State: 2x Difference

New York vs. Mississippi

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In-Depth Look at the Most Federally Dependent States

Alaska

Alaska is the most federally dependent state, as over 50% of the state’s revenue comes from federal funding. Some reasons why Alaska gets a lot of federal dollars include the difficulty of maintaining infrastructure in a big state with harsh weather and a small population, plus Alaska’s richness in natural resources, its vulnerability to disasters and its defensive importance.

Alaska also has a lot of federal jobs – in fact, nearly 5% of the state’s workforce is employed by the federal government. For context, the share for most states is only between 1% and 3%.

Finally, Alaska has a very good return on the taxes that its residents pay to the federal government. For every $1 that residents pay in taxes, the state receives $2.36 in federal funding, over double their investment.

Kentucky

Kentucky is the second-most federally dependent state, in large part because it receives a huge amount of federal funding compared to the taxes that residents pay. For every $1 paid in taxes, Kentucky gets $3.35 in federal funding. Around half of the other states get less than $1 in federal funding for every tax dollar.

Federal funding makes up a large share of Kentucky’s revenue as well, at over 46%, among the highest in the country. Kentucky doesn’t have quite as many federal jobs as other states, though. Around 1.8% of the state’s residents are employed by the federal government, which puts Kentucky around the middle of the 50 states for that particular metric.

West Virginia

West Virginia ranks third when it comes to dependence on the federal government, its residents get $2.72 in federal funding for every $1 they pay in taxes, which is a pretty great deal for them.

Federal funding makes up a large share of West Virginia’s revenue as well, at over 45% and more than 3.7% of West Virginia’s workforce is employed by the federal government. Both of these rates are among the highest in the country, proving that West Virginia’s economy owes a lot to the federal government.

Red vs. Blue States

Correlation Analysis

Ask The Experts

For further clarity on the problems contributing to federal-funding disparities, we talked to a panel of economics and public policy experts. Click on the experts’ profiles to read their bios and responses to the following key questions:

1. Should federal resources be allocated to states according to how much they pay in federal taxes or should some states subsidize others?
2. Which programs should be a state or local responsibility and which should be a federal responsibility?
3. What is the fairest way to redistribute federal resources back to the states?
4. What more can the current administration do to help reduce the impact of revenue shortfalls in state budgets during the current economic climate?

Ask the Experts

Dr. Howard A. Frank
Professor of Public Policy and Administration; Director, Jorge M. Perez Metropolitan Center; Editor-in-Chief, Public Administration Quarterly – Florida International University
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Lucy Dadayan
Ph.D. – Principal Research Associate, Tax Policy Center - Urban Institute & Brookings Institution
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Nadav Shoked
Professor of Law – Northwestern University School of Law
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Dr. Samuel B. Stone
Ph.D. – Professor of Public Administration, Division of Politics, Administration, and Justice – California State University, Fullerton, College of Humanities and Social Sciences
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Carolyn J. Heinrich
Patricia and Rodes Hart Professor of Public Policy, Education and Economics, Vanderbilt University School of Medicine Secondary Appointment as Professor of Health Policy University Distinguished Professor of Political Science in the College of Arts and Science University Distinguished Professor of Leadership, Policy, and Organizations – Vanderbilt University
Read More

Brian J. Cook
Ph.D. – Professor Emeritus, Center for Public Administration & Policy – Virginia Tech
Read More

More Experts

Methodology

In order to determine the most and least federally dependent states, WalletHub compared the 50 states across two key dimensions, “State Residents’ Dependency” and “State Government’s Dependency.”

We evaluated those dimensions using three relevant metrics, which are listed below with their corresponding weights. Each metric was graded on a 100-point scale, with a score of 100 representing the highest level of federal dependency.

We then determined each state’s weighted average across all metrics to calculate its overall score and used the resulting scores to rank-order the states.

State Residents’ Dependency – Total Points: 50

• Return on Taxes Paid to the Federal Government: Triple Weight (~37.50 Points)
  Note: This metric was calculated by dividing federal funding in U.S. dollars by IRS collections in U.S. dollars.
• Share of Federal Jobs: Full Weight (~12.50 Points)

State Government’s Dependency – Total Points: 50

• Federal Funding as a Share of State Revenue: Full Weight (~50.00 Points)
  Note: This metric reflects the proportion of state revenue that comes from the federal government in the form of intergovernmental aid in 2022.

The following metrics were included in the infographic above for context only. They represent subsets of federal funding and are reflected in the first two metrics.

• “Federal Contracts” divided by “IRS Collections”
• “Grants” divided by “IRS Collections”
• “Direct Payments + Other Financial Assistance” divided by “IRS Collections”

 
Sources: Data used to create this ranking were collected as of February 11, 2025 from the Internal Revenue Service, U.S. Census Bureau, USAspending.gov and Bureau of Labor Statistics. Unless noted otherwise, the statistics underlying this report are from 2023 and 2024.

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