2015’s States Most & Least Dependent on the Federal Government

From WalletHub, March 24, 2015

With the tax deadline drawing near and on the heels of its report on the Best States to Be Rich or Poor from a Tax Perspective, the leading personal finance social network WalletHub conducted an in-depth analysis of 2015’s States Most & Least Dependent on the Federal Government.

In order to identify which states most and least depend on the federal government, WalletHub analyzed the 50 U.S. states across four key metrics, including: 1) the return on taxes paid to the federal government; 2) federal funding as a percentage of state revenue; 3) the number of federal employees per capita and 4) the number of civilian non-defense federal employees per capita.

(50th = Most Dependent, 1 = Least)

Hawaii Ranks 26th Overall:

• 38th – $1.46 Return on Taxpayer Investment
• 2nd -- 21.54% Federal Funding as a percentage of state revenue  (In other words, Hawaii ranks 49th.  Only North Dakota receives a smaller proportion.  But Hawaii’s state budget includes the DoE whereas all other states have local school districts with funding mostly outside the state budget.  Does Federal school funding skew this number down?)
• 50th -- 0.05437 Federal employees per capita
• 35th -- 0.00446 Civilian Non-Defense Federal Employees per Capita
   

 
Key Stats

• With an average dependency ranking of 33.2, red states are altogether more reliant on federal funding than blue states, which ranked 18.3 on average (the smaller the ranking, the less dependent the state).
• There is a 57 percent correlation between a state’s federal dependency and its per-capita GDP. That means the least wealthy states tend to be those receiving the most federal support.