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WalletHub released its 2025 list of Most & Least Federally Dependent States on Monday, Mar. 10. The study ranked all 50 states based on metrics like return on federal taxes paid, federal funding as a share of state revenue, and the percentage of federal jobs.
The report showed a sharp divide in federal dependency across the US, with many Democratic-leaning states contributing more in taxes than they receive and Republican-leaning states benefiting from higher federal aid.
"Regardless of whether the distribution of federal funds is fair or not, living in one of the most federally dependent states can be beneficial for residents," said WalletHub analyst Chip Lupo. "For every dollar residents of the top states pay in taxes, they get several dollars back in federal funding, which often leads to higher-quality infrastructure, education, public health and more."
New Jersey was the least federally dependent state in the country. The Garden State ranked 49th in return on federal taxes, meaning residents pay far more than they get back. The state was also 44th in federal funding as a share of revenue and 46th in the share of federal jobs.
Massachusetts is the fourth-least dependent state, finishing in the bottom 10 in the state residents and state government dependency ranks. The Bay State does boast the nation's second-highest gross domestic product per capita.
Connecticut scored just outside the top 10 least federally dependent states, ranking 40th overall because of a low state government dependency rating. The Constitution State does have the fifth highest GDP per capita.
New York is slightly more dependent on the federal government than two of its New England neighbors but was still ranked 37th overall. The Empire State has the country's highest GDP per capita and only trails California in the amount of grants received from federal tax money.
Virginia came in 35th overall for federal dependency. The state leads the nation with the highest amount of federal contracts.
Pennsylvania and Maryland are in the top half for most federally dependent states at 20th and 14th overall, respectively. The states benefited more from federal funding and jobs than many of their neighbors.
The study also found a political divide. On average, Republican-voting states in the 2024 Presidential election were more dependent on federal aid, according to WalletHub.
"Red states" had an average ranking of 21.48, compared to the "blue state" average of 32.05.
"There are many different federal programs that redistribute resources back to the states," said Carolyn Heinrich, a professor of public policy, education, and economics at Vanderbilt University. "Many of them are based on need and population size, such as Medicaid, but sometimes federal resources are needed to fill in important gaps or address urgent needs, such as those associated with climate change that may have disproportionate impacts."
Alaska was ranked as the most federally dependent. More than 50 percent of state revenue comes from federal aid and for every $1 in federal taxes paid, the state receives $2.36 in funding.
You can click here to see WalletHub's full 2025 study of Most & Least Federally Dependent States.
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