As cuts continue, one study looks at how much each state relies on the federal government
As President Donald Trump’s administration and Elon Musk’s Department of Government Efficiency (DOGE) slash federal spending, a new WalletHub study looks at which states are most —and least— dependent on federal funding in 2025.
The Lone Star state ranked in the middle of the pack, coming in at No. 38 overall in WalletHub’s ranking.
Here’s what else the study found.
How WalletHub came up with its rankings
WalletHub measured federal dependency in each state using three key metrics:
- Return on Taxes Paid To the Federal Government: WalletHub calculated this metric by dividing the amount of federal funding received in each state by the IRS collections from each state.
- Share of Federal Jobs: The percentage of state workers employed by the federal government.
- Federal Funding as a Share of State Revenue: The proportion of a state’s budget sourced from federal dollars in the form of intergovernmental aid, as of 2022.
Researchers compiled data from the IRS, Census Bureau, USAspending.gov and the Bureau of Labor Statistics to calculate a score for each state and rank them accordingly.
Texas had a total score of 32.54 in WalletHub’s study. It ranked No. 48 for both the amount of federal contracts received and the amount of grants received.
Which states are the most federally dependent?
According to WalletHub, the top five most federally dependent states in 2025:
- Alaska: More than half of its revenue comes from federal dollars, driven by high infrastructure costs, frequent natural disasters, and defense spending.
- Kentucky: For every tax dollar residents pay, the state receives $3.35 in federal funding.
- West Virginia: Nearly half of the state’s budget is powered by federal funds, returning $2.72 for every dollar paid in taxes.
- Mississippi: Heavy reliance on federal assistance for social programs and disaster relief keeps it high on the dependency list.
- South Carolina: Despite economic growth, it remains deeply dependent on federal subsidies.
Which states are the least federally dependent?
On the flip side, states with robust economies, high tax revenue, and fewer federal jobs have less reliance on federal money. The five least federally dependent states in 2025, according to WalletHub, are:
- New Jersey
- California
- Delaware
- Massachusetts
- Utah
