Nearly $1 in $3 in state revenue comes from the federal government, according to a new analysis.
While taxes are responsible for most state general revenues, the federal government is responsible for about 31.5 percent of the total, according to the nonprofit Tax Foundation.
Mississippi is most reliant on the federal government, with 45.3 percent of general revenue in the most recently available fiscal year coming from the feds. Oil-rich Alaska‚ whose revenue is highly volatile, is least reliant on the federal government.
The Tax Foundation’s analysis is based on a simple calculation of Census state revenue data published last month. The Census data offer a detailed breakdown of revenue sources for each state, so the Tax Foundation simply divided the “intergovernmental revenue” each state received from the federal government by the state’s “general revenue” total.
Of course, looking at revenue reveals only one aspect of the federal-state relationship. As a Pew Charitable Trusts project recently found, when all federal spending on states is combined, it accounts for nearly a fifth of state economic activity. As the Pew map below shows, a third of economic activity in Mississippi is attributable to the federal government, a larger share than in any other state. Wyoming’s economy was least reliant on federal spending, with just 12 percent of activity stemming from federal sources.