Which States Receive the Most Federal Benefits?

As you know from reading this site, the Government is quite a force in the economy – namely, taking in an estimated $2,468,599,000,000 in revenue in 2012.  On top of that, Uncle Sam spent an estimated $3,795,547,000,000!

As you might expect, both sides of the ledger were imbalanced between states – some states pay more or less per capita than other states, and state receipt of Federal benefits and payments was imbalanced as well.  Is this discussion bound to boil down to a “Blue State vs. Red State” battle?  Of course not!  The real answer is: “it’s complicated”.

I have combined 2009 IRS data on the Individual Taxes (read: mostly income taxes) paid by members of each state, 2009 Census estimates of total state population, and 2009 Federal Spending Distribution data, also from our friends at the Census Bureau.  I’ve combined it all into a human-enjoyable visualization thanks to IBM Many Eyes (and, as always, my data set is open – click here).

Federal Spending Per State, ex-Defense


And The Winner Is?

In the initial version of the map, I had a little issue with the colors of the states.  The cause?  A major outlier in the form of Washington, D.C.

D.C. is such an outlier, in fact, that I had to move it to a separate spreadsheet (Data on Many Eyes here).  With a population of roughly 600,000 in 2009, citizens paid $6,003.01 per capita in taxes to receive $74,987.87 in federal benefits.  Unfair?  Maybe not – D.C. is governed by the U.S. Senate, and has only had a mayor and local government since the early 70s.  They do have their own local taxes – with rates up to 8.5% on income.  Of course, they also can’t charge property tax to approximately 30% of their land mass – so no tax on that prime real estate near the Potomac!

With D.C. out of the way, the crown falls to Hawaii.  Hawaii residents paid $2,859.70 per capita and received $13,175.02 in federal funds, for an excess of $10,315.32 per capita.  Bringing up the rear was Connecticut – where $6,097.55 in taxation brought $8,449.85 in benefits.

As for Texas and California, the two states generally referenced as ‘Red’ and ‘Blue’ models, respectively?  Both fell into approximately the same spot – Texas was 44th in excess ex-defense spending per capita at $4,191.87.  California was 43rd with $4,292.  Again, you can see the whole list here.

I’ve boiled it down further: here are the States and D.C. by ‘return on investment’ (Federal Funds versus Taxes Paid), in graphical form.

States by federal funding.

(Click for Larger)

Thoughts?  Questions?  You know where to find us.  If you make a derivative work using the data above, let us know so we can link it!


  1. freeby50 says

    I take it the ex-defense spending is just all federal spending excluding defense department spending?

    I see the Census breaks the spending into direct payments, procurements, grants and then salaries/wages. So the money we’re looking at there is all money flowing into a state for whatever reason. Its not just entitlement checks which would fall in the ‘direct payments’ category but also stuff like the government buying cars in Michigan or building roads in California or employing people in D.C. Looks like about half of the federal money flowing into DC is wages.

    • freeby50 says

      Also, why break out defense? Seeems like an inflow of money much like the other categories. I mean if a state has some big military bases in a state or sells tanks to the Army thats not much different than a lot of federal civilian employees or selling the government other items.

      • CameronDaniels says

        I agree that defense spending can be argued as concentrated benefits in a state, but the benefit could also be explained to more generally provide for the nation. It is difficult to pin down the actual benefits of national defense. Many of the other forms of government spending (besides entitlements) can often be described as more concentrated benefits. Building a train between Los Angeles and San Francisco will concentrate most of the benefits on those who live or work in that area. Most infrastructure spending can be described as concentrated benefits with dispersed costs. Defense, on the other hand can be described as concentrated benefits OR dispersed benefits.

        A good example (that the writers on our site may enjoy) is the Big Dig project in Boston, fueled by about $20b in federal government money. Or, from the right, the ‘Bridge to Nowhere’ that Sarah Palin found herself embroiled in.

        Though I agree this point is debatable.

        • sullivanb3 says

          yes that was a great $20b spent, althought the benefit is very concentrated… you get a great view sitting in traffic for hours on the Zakim Bridge

      • says

        Actually, I want to hang a lampshade on it and do a separate topic – beyond the debate of whether some spending is dispersed or concentrated, I also think it isn’t fair to claim that a state is ‘taking’ more from the Government fisc if that state is also producing more soldiers, for example. I’m going to try to find state by state recruitment numbers to tell that part of the story, though.

        • freeby50 says

          I would assume that defense department spending is going to be concentrated in states that have more industry and military bases. I doubt it would really have any relationship to recruiting. For example I don’t expect Nebraska will have a lot of DoD dollars as theres probably not much in the way of military bases or defense contractors there. But they might have good recruitment/capita figures. Whereas Hawaii is likely to have high DoD dollars as its a strategic base for our military and has small population. I would just set aside the economic benefit of military spending as it does benefit the locals disproportionally. Its not just an equal benefit due to the military protection. Military assets and spending are dispersed based on military requirements as well as some pork spending. It would be hard to split the two just based on total defense spending.

          • freeby50 says

            You know I also expect that coastal states see disproportionate benefit from the $150B that we spend on our Navy. 😉

  2. freeby50 says

    I like the analysis, interesting topic. I had the notion to write on this one myself, but you beat me to it. :)

    • says

      Don’t let me stop you! You should be able to take the Many Eyes data (either with or without DC) and paste it directly into your friendly neighborhood spreadsheet, and build upon it. I’m half hoping someone mashes it up into a new visualization, haha.

  3. says

    Wow, very interesting work here! Besides information like this being already super important I think the visualization could be a great voter tool. As personal finance bloggers we are always trying to help people do better for themselves but it’s important that the same kind of efficacy spills into helping people make savvy financial decisions about the places they live – regardless of where you fall on the political spectrum. It’s always better to vote with your beliefs based in some kind of real information or research as opposed to being irrational…which is where some people are unfortunately.

  4. 101 Centavos says

    I might have thought that Alabama, Mississippi and Oklahoma were right on up there. After obesity, divorce, teen pregnancy, and school dropout rates, what’s not to strive for? (Actually, us Okies are very thankful for Alabama and Mississippi… got someone to make fun of…)

  5. says

    The shared data regarding Federal Benefits received by states is much helpful. It was not easy for me to collect such useful data of many states together and to reach at any outcome. It can help me to analysis lots of economic aspects. Thanks to share it with us.