Some states depend on government aid much more than others. So while some states like New Jersey, Delaware and Illinois are quite independent and are considered “money-makers”, the main contributors to America’s progress and prosperity, others are considered “takers” and are heavily dependent on the country’s budget.
WalletHub has carried out a research in order to rank the states according to their independency and the parameters used were return on the taxes paid to the government, percentage of state revenue that federal funding is responsible for and the number of federal employees per capita.
The results showed that these 8 states were the ones that needed the most government aid:
Louisiana has recovered greatly in the last couple of years and has got from number 4 to number 8 among the most problematic states when it comes to finances. But there is still a long way to go. Its poverty rate is still the 2nd highest in the country and a lot of money goes on infrastructure.
Besides, Louisiana is often a target of natural disasters such as Hurricane Katrina that left horrible consequences in terms of human lives, but it also drained the state’s budget. However, the authorities refused to raise taxes which only led to the state needing more help.
Arizona’s situation is getting worse. But it’s not so much because of financial trouble, but because of the necessary help from the government that can’t be reversed. For example, the largest Indian reservations are located in Arizona and they receive money from the government budget, but remain independent. Moreover, much of the land belongs to the country itself and is protected and preserved by the federal government.
This means that a lot of money is spent on nature that can’t be used as resource or in any other way. On top of all that, Arizona is struggling with crime and immigration, since it is located on the border, so a significant amount of money goes for border control.
6. West Virginia
Another state that can’t get out of a tricky financial situation is West Virginia. One could get mistaken and think that considering this state is relatively small and doesn’t have many people, not a lot of government money goes to it. However, if we look at the big picture, for a state of its size and population, the situation in West Virginia is more than serious.
What leads to the financial dependency of West Virginia is the rough terrain (“The Mountain State”) which leads to numerous people being unemployed or working risky jobs. In such conditions, West Virginia is today one of the poorest states in America.
When it comes to federal aid, Montana has a similar situation as Arizona, just on the opposite side of the country and it’s much smaller and less populated.
Being located on the Canadian border, Montana needs a lot of money for border control. Besides security, Montana is home to some of the most beautiful national parks in the country and as such it requires government funding in order to preserve them. And with all this, federal money also goes into Indian reservations.
All things considered, it is completely normal that the State of Montana could use a helping dollar or two.
Moving to Alabama where we come across a pretty alarming situation. This state is currently the sixth-poorest state in the country with many people living in extreme poverty. In this situation, government money is more than necessary and much of the population is receiving federal aid.
Furthermore, government money is being spent on the 5 military bases that are located in Alabama. Whatever the cause for their situation is, bottom line is they are the fourth most dependent state in the country. And in order to help citizens survive, keep the streets safe and lower crime rates, the country invests quite a sum in Alabama.
Even though Kentucky wasn’t on the list last year, it has unfortunately earned its spot among the most dependent states in the country in 2015. And it landed straight in the top 3.
Much of the state is suffering in terms of finding work and living on minimal salaries. If we look at its more successful, big cities like Louisville and Lexington, we might think that the situation is perfectly fine, but the truth is that smaller towns are falling far behind. And just like Alabama, Kentucky is home to several military bases that require considerable amounts of money from the government.
Mississippi is down by one place this year. In 2014, this state was the most dependent on government funding.
However, being in second place this year, we can’t really say that things have significantly improved. What makes the financial situation in Mississippi so disastrously bad is that there is a ton of reasons for it, not just one or two. Funding flows into the military bases and large amounts are being spent every year on damage control after natural disasters, which are common in the area. But the worst problem is unemployment, with many people having no chances of finding a job in the near future. All of this makes Mississippi one of the states with the lowest income.
1. New Mexico
As we approach first place we move back to the Mexican border. New Mexico is another state on the border that is heavily dependent on federal dollars. And the situation is similar to Arizona. A lot of money goes into border control because the state is struggling with immigrants.
Along with this, much of the land is federal governed, such as scientific sites and military bases. Government money also goes to Indian reservations that are a big part of New Mexico. Unfortunately, this money doesn’t flow back into the country’s budget and all of this makes New Mexico the most dependent on government aid.