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Tax Foundation Maps Out Federal Aid in State Budgets

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Earlier this week, the Tax Foundation posted an intriguing new map examining “how much of each state’s budget comes from the federal government.” The state with the highest percentage of revenue coming from the Feds was Mississippi (49 percent), while the state with the lowest percentage was Alaska (24 percent).

In Texas’ case, the state ranked comparatively high in the Tax Foundation’s analysis, placing 11th among the states. Nearly 40 percent of Texas’ budget comes from the federal government, with the bulk of that money going to pay for Medicaid and various education programs (see Figure 13 here).

The danger here, of course, is that at some point the federal government’s fiscal house must be put in order and when that day of reckoning comes, states with too heavy a reliance on federal aid—like Texas—are going to have big holes in their budgets where all that “free” federal money used to be.