Federal Spending in the States

Federal spending plays a significant role in state budgets and economies. In recent years, the percentage of state revenues coming from Washington, D.C., to the states has fluctuated, largely due to the end of American Recovery and Reinvestment Act—or stimulus—dollars and the implementation of the Affordable Care Act.

Learn more about the Federal Agenda and the States in the Jan/Feb 2016 issue of CSG’s Capitol Ideas Magazine.

Year-Over-Year Growth in Federal Spending to States

According to the National Association of State Budget Officers, federal funds to states grew slightly in fiscal year 2011, fell in fiscal years 2012 and 2013, and then grew again in fiscal year 2014. For fiscal year 2015, it is estimated that federal spending will jump by 12.2 percent over 2014 levels—almost exclusively due to increased spending on Medicaid (fiscal 2015 was the first full year of the optional Medicaid expansion under the Affordable Care Act).

Percent of State Revenues from Federal Dollars, FY 2000 – FY 2013

Federal dollars made up just under one-third of state revenues—30 percent—in fiscal year 2013, which is the most recent year for which data are available. That figure is down significantly from fiscal year 2010, at the height of the stimulus activity, when that percentage hit 35.5 percent.

Federal Per Capita Spending

On a per capita basis, federal spending in the states varied significantly in fiscal year 2013—from a low of $7,108 in Utah and $8,174 in Minnesota to a high of $16,710 in Virginia and $15,684 in Maryland.