(Photo: CapitalPress.com)
Article Author: Richie Bernardo
The personal finance website WalletHub conducted an in-depth analysis of 2016’s Most & Least Federally Dependent States to determine how dependent states with the lowest tax rates are compared with those paying the highest.
In order to identify which states most and least depend on federal support, WalletHub’s analysts compared the 50 states across three key metrics: 1) return on taxes paid to the federal government; 2) federal funding as a percentage of state revenue; and 3) share of federal jobs.
Most Federally Dependent States Least Federally Dependent States
1 Mississippi 41 New York
2 New Mexico 42 New Hampshire
3 Alabama 43 Minnesota
4 Louisiana 44 Nevada
5 Tennessee 45 Illinois
6 Montana 46 California
7 South Dakota 47 Kansas
8 Kentucky 48 New Jersey
9 West Virginia 49 Connecticut
10 Missouri 50 Delaware
Comparing the States:
With an average dependency ranking of 17.13, Red States are altogether more reliant on federal funding than Blue States, which ranked 33.23 on average. (The lower the ranking, the more dependent the state.)
There is a 63 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.
Kansas is the 4th least federally dependent state, making sense of the fact that it has the 11th highest tax rates in the nation. On the flip side, Tennessee is the 5th most federally dependent state and, as can also be expected from that ranking, pays the 6th lowest tax rates.
Read the full report: WALLET HUB