Donald Trump signed an executive action temporarily suspending all federal funding. The measure received so much negative reactions that the government decided to rescind it at least for now.
In 2021, the US government provided nearly $1.3 trillion to state and local governments through federal grants. These grants made up a fifth of states’ total revenues, funding healthcare, education, social services, infrastructure, and public safety programs.
Overall, federal aid to state and local governments has risen by over $400 billion since 2019 because of COVID-19’s burden on healthcare and social programs.
Though Office of Management and Budget data shows that while federal grants increased annually from 2013 to 2021, they fell in 2022 (when adjusted for inflation).
Which states received the most money from the federal government?
Federal funding comes through several overlapping programs targeting state and local governments. The proportion of state revenues attributable to federal aid is determined by combining the funding received by both state and local institutions.
The five states that received the most federal aid were:
• California ($162.9 billion)
• New York ($110.2 billion)
• Texas ($105.8 billion)
• Florida ($58.8 billion)
• Pennsylvania ($57.1 billion)
These figures largely correlate with population. So, to interpret state reliance on the federal government more accurately, we can look at total aid as a percentage of annual state revenues.
In 2021, Montana led the states with the highest proportion of federal funding to the overall budget at 31.8%, followed by New Mexico (30.7%), Kentucky (30.1%), Louisiana (29.8%), and Alaska (29.0%).
Vermont relied on federal grants the least, with just 12.8% of its total budget coming from the federal government.
Despite receiving the most federal funding dollar-wise, California was the second-least reliant state on a percentage basis, with 14.5% of revenue coming from the federal government, followed by Minnesota (14.6%), South Dakota (15.0%), and Iowa (15.5%).
Source: USA Facts