Washington’s Favorite Dependents: The 50 States
Ranking State Reliance on Federal Dollars—and the Reforms States Need Now
October 1, 2025
State Policy Network’s Center for Practical Federalism found that the average state now relies on the federal government for 37% of its revenue, double what it was in 1990.
Using the latest 2023 US Census Bureau data, authors Jennifer Butler and Tony Woodlief rank the states based on their reliance on federal dollars—revealing that Louisiana, Arizona, Missouri, Wyoming, and Alaska top the list, while Hawaii, Kansas, North Dakota, Utah, and Virginia are the least dependent.
As the federal government shutdown continues, the report underscores how vulnerable state budgets are to disruptions in federal funding.
Butler and Woodlief note that with a shifting federal landscape and new restrictions on grants emerging, states that fail to plan ahead could face immense budgetary pressures.
Key Findings
The average state received 37% of its revenue from Washington in 2023, nearly matching the highs of the pandemic stimulus years.
23 states are now more dependent on federal funds than they were during the height of COVID-19 relief.
Only Idaho and New Mexico saw declines in federal reliance since the pandemic.
New federal rules and freezes could further squeeze state budgets, including a halt on $410 billion in unspent funds and new cost-sharing requirements for programs like Medicaid and SNAP.
Now is the time to hardwire policies that reduce federal dependency and strengthen resilience.
Fortunately, several states are already taking steps to revitalize federalism and fiscal independence—by requiring legislative approval for federal funds, planning for potential funding losses, increasing transparency around federal guidance, and limiting judicial deference to agencies.
To schedule an interview with one of the authors, please contact Camille Walsh at walsh@spn.org.