With the tax filing deadline drawing near but some states receiving far more in federal aid than they pay in taxes, the personal-finance website WalletHub today released updated rankings for 2023’s Most & Least Federally Dependent States, as well as expert commentary.
This report illustrates the extent to which states are independent economically. In order to identify which states most and least depend on federal support, WalletHub compared the 50 states across three key metrics: return on taxes paid to the federal government; federal funding as a share of state revenue; and share of federal jobs.
South Dakota ranked 15th overall in the study. The state ranked 4th for state government’s dependency and 29th for state residents’ dependency.
| Most Federally Dependent | Least Federally Dependent |
| 1. Alaska | 41. Nevada |
| 2. West Virginia | 42. Delaware |
| 3. Mississippi | 43. Iowa |
| 4. Kentucky | 44. Massachusetts |
| 5. New Mexico | 45. California |
| 6. Wyoming | 46. Illinois |
| 7. South Carolina | 47. Kansas |
| 8. Arizona | 48. Utah |
| 9. Montana | 49. Washington |
| 10. Louisiana | 50. New Jersey |
Key Stats
- With an average dependency rank of 20.32, Red States are altogether more reliant on federal funding than Blue States, which rank 30.68 on average. (The lower the rank, the more dependent the state is.)
- There is a 57.2 percent correlation between a state’s federal dependency and its per-capita GDP. That means the least wealthy states tend to receive the most federal support.
- Illinois is the fifth least federally dependent state, which helps explain the fact that it has the highest tax rates in the nation. On the flip side, Alaska is the most federally dependent state and has the lowest tax rates.
To view the full report and your state’s rank, please visit:
https://wallethub.com/edu/
Please let me know if you have any questions or if you would like to schedule a phone, Skype or in-studio interview with one of our experts. Feel free to embed this YouTube video summarizing the study on your website. You can also use or edit these raw files as you see fit. Full data sets for specific states are also available upon request.
