Mississippi no longer the state most reliant on federal aid

By Steve Wilson
November 13, 2019

Mississippi is no longer the state most dependent on federal aid as a percentage of its budget.

The only reason the Magnolia State went down in the rankings is because three other states vastly increased their dependence, not because lawmakers in Mississippi were able to wean the state off federal aid.

The recent analysis from The Pew Charitable Trusts reveals that, on average, nearly one third of state revenue came from the federal government in 2017, a near 50-year high. Federal grants helped states pay for healthcare, social services, education, transportation, and other infrastructure. 

In the last four years on average, 44.38 percent of Mississippi’s budget came from federal funds.

Montana was the leader in federal funds, with 46.1 percent of its revenues coming from that source. Wyoming (44.5 percent) was second, Louisiana (43.7) was third and Arizona (43.1 percent) was fifth.

Only two of those states — Mississippi and Wyoming — have not expanded Medicaid under the so-called Affordable Care Act (also known as Obamacare) to able-bodied, working adults.

Hawaii (20.7 percent), Virginia (21.1) and Kansas (23.3) had the lowest shares of their revenue coming from federal funds.

On average, the share of state budgets nationally that came from federal funds added up to 32.4 percent.

Mississippi was one of seven states were federal funds were the largest revenue source, outstripping state tax revenues. The others included Alaska, Arizona, Louisiana, Montana, New Mexico, and Wyoming.

Federal funds represent about 45 percent of Mississippi’s total budget

YearFederal FundsTotal fundsPercentage
2017$ 9,129,408,882$20,905,097,42643.7

In the fiscal 2020 budget, 44.5 percent of Mississippi’s revenues ($9.38 billion out of $21 billion) came from federal funds. In fiscal 2019, 44.9 percent of the state’s revenues ($9.37 billion out of $20.86 billion) originated from federal funds.

According to the analysis, 26 states had declines in their share of revenues coming from federal dollars. The trend, however, was that federal funds as a percentage of state budgets were at the fourth-highest level according to Pew data going back to 1961.

In 2017, federal dollars accounted for $639 billion of the $1.97 trillion in revenue collected by state governments.


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