Federal funding makes up 40% or more of overall revenue in nearly half of U.S. states, per the latest available data.
Why it matters: The Trump administration and congressional Republicans are looking for ways to cut federal spending, and some states may be more vulnerable than others to major decreases.
By the numbers: As of 2022, federal funding accounts for the greatest shares of state revenue in Louisiana (50.5%), Alaska (50.2%) and Arizona (49.7%).
- It accounts for the smallest shares in North Dakota (22.2%), Hawai’i (25.9%) and Virginia (27.6%).
- That’s according to a Pew Charitable Trusts analysis of the latest available census data.
Stunning stat: Total federal grants exceeded $1 trillion in 2022 for the first time, per Pew.
Context: Federal funding’s share of overall revenue in any given state can fluctuate from year-to-year depending on overall federal spending levels, state tax collections and more.
- States have been getting more federal funding than usual in the past few years due to COVID-19 and infrastructure spending.
Reality check: Federal funds making up a high percentage of revenue isn’t necessarily a problem for states, depending on their ability to raise money through taxes and other means.
- Yes, but: Big losses in federal dollars can leave states scrambling for alternate funding for federally-supported programs and projects, or cancel them entirely.
Case in point: FEMA is cutting $325 million in grants largely meant for flood mitigation in New York.
- “No state in the nation can backfill the massive cuts being proposed in Washington,” New York Governor Kathy Hochul said in response earlier this month.
What we’re watching: Whether the second Trump era results in a notable, broad decrease in federal funding to states — and how states react.