Last week, State Budget Solutions (SBS) called attention to new data released by the U.S. Census Bureau revealing just how much money states received from the federal government in 2012-and you might be surprised at how heavily the Lone Star State relies on Uncle Sam for aid.
According to SBS, federal aid amounted to 34.5 percent of Texas’ state budget in 2012, slightly above that year’s all-state average of 31.6 percent. This relatively high level of dependence on the federal government has consequences.
As stated previously, the federal government’s expanding role in the state budget process brings with it certain potential problems, such as: negative economic growth; increased state spending; declining tax revenues; and a loss of state sovereignty. The best way to avoid such consequences is to reduce reliance on federal aid to the greatest extent possible.
Among the other states, those who relied most heavily on the federal government were: Tennessee (41.02 percent); Louisiana (43.95 percent); and Mississippi (45.35 percent). The states to rely the least on federal aid were: Virginia (23.53 percent); North Dakota (20.49 percent); and Alaska (19.97 percent).