Donald Trump signed an executive order temporarily suspending all federal funding. The measure received so much negative feedback that the government decided to revoke it, at least for now.
In 2021, the U.S. government provided nearly $1.3 trillion to state and local governments through federal grants. These grants accounted for one-fifth of total state revenues, funding health, education, social services, infrastructure, and public safety programs.
Overall, federal aid to state and local governments increased by more than $400 billion since 2019 due to the burden of COVID-19 on health and social programs.
Although data from the Office of Management and Budget show that while federal grants increased annually from 2013 to 2021, they fell in 2022 (adjusted for inflation).
Which states received the most money from the federal government?
Federal funding comes through various overlapping programs aimed at state and local governments. The proportion of state revenues attributable to federal aid is determined by combining the funding received by 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 numbers largely correlate with population. Thus, to interpret the states’ dependence on the federal government more accurately, we can look at total aid as a percentage of the states’ annual revenues.
In 2021, Montana led the states with the highest proportion of federal funding relative to the overall budget, at 31.8%, followed by New Mexico (30.7%), Kentucky (30.1%), Louisiana (29.8%), and Alaska (29.0%).
Vermont depended the least on federal grants, with only 12.8% of its total budget coming from the federal government.
Despite receiving the largest federal funding in dollar terms, California was the state with the second-lowest dependence 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