2023’s Most & Least Federally Dependent States – WalletHub Study

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.

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.