Kentucky depends on federal government money more than most

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The states most reliant on the federal government for money are also Republican leaning states, including Kentucky, according to new a study.

Kentucky ranks sixth in the nation in a list of states that are the most dependent on the federal government, according to the study recently released by MoneyGeek, a personal finance technology company.

Kentucky receives $2.15 in federal money for every dollar of taxes paid. Before the COVID-19 pandemic, 35% of the state’s total revenues came from the federal government, and next year the state projects a 5% dip in revenue.

“Kentucky is one of the most federally dependent states in the nation,” Doug Mines, head of data analytics at MoneyGeek, said. “Additionally, the state government receives 35% of its revenues from the federal government while that national average is 26%. That’s 35% more funding than average.”

Except for the most dependent state – New Mexico – nine of the 10 states most dependent on federal money are red-leaning states. Overall, red states receive $1.23 of federal taxes paid, while blue states receive 95 cents.

Overall, people and organizations in 32 states receive more from the federal government than they pay. States with a higher gross domestic product have a lower dependency on the federal government and subsidize states with lower GDP through the federal government.

On average, federal funds make up 26% of state budgets across the country. Wisconsin has the lowest proportion of revenue from the federal government at 17%, while Louisiana is the highest at 37%.

The 10 most dependent states are New Mexico, Alaska, Mississippi, North Dakota, West Virginia, Kentucky, Arizona, Alabama, Montana and South Carolina.

The 10 least dependent states are New Jersey, Iowa, Illinois, Washington, Ohio, Minnesota, Utah, Kansas, Nebraska and Delaware.

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