JACKSON, Wyo. – With Tax Day postponed to July 15 and states having received hundreds of billions of dollars in federal aid during the COVID-19 pandemic, the personal-finance website WalletHub today released updated rankings for 2020’s Most & Least Federally Dependent States.
The report illustrates the extent to which states are independent economically. However, the oxymoron in this situation is that states with a higher level of federal dependence are likely better positioned to handle the coronavirus pandemic, given that most relief has come from the federal government.
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.
Federal Dependency of Wyoming (1 = Most Dependent, 25 = Avg.)
Federal assistance to states has come into the spotlight recently during the coronavirus pandemic, where some states have received far more money per case than others. For example, in the initial $150 billion given to states from the stimulus package, which was allocated by population, New York got less than $24,000 per positive case while Alaska received over $3.3 million. While the government has shelled out around $750 billion total to states during this crisis, it faces questions about whether the distribution has been truly equitable and efficient.
For years, Americans have looked at federal assistance programs with growing scrutiny, and under the current administration, the number of people dependent on government assistance was decreasing prior to the coronavirus crisis. Regardless of overall trends, though, it is clear that some states receive a far higher return on their federal income-tax contributions than others.
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