States are more dependent on the federal government than ever before, with Uncle Sam providing twice as much revenue as he did 35 years ago — making them more vulnerable to volatility in Washington.
That’s the warning from a new analysis that found the reliance on the federal dollars does more harm than good, undermining states’ autonomy and putting them at the mercy of a mercurial Congress and shifting priorities of different presidential administrations.
“The reality is that federal agencies crowd into what should be state and local responsibilities with promises of free money that is never free, distorting community priorities, undermining democratic accountability, and fomenting chaos with every change in presidential administration,” said Tony Woodlief, one of the authors of the report from the State Policy Network, a collection of conservative and libertarian think tanks.
On average, states received 37% of their revenue from Washington, roughly the same amount they received during the pandemic when stimulus checks were sent out. That’s also up from 2019, when states received 31% of the revenue from Uncle Sam.
Nearly half of the states, 23, are more dependent on federal funds than they were during the height of COVID-19 relief, with four states — Virginia, New Hampshire, Oklahoma and Rhode Island — nearly doubling their dependency on federal taxpayer dollars.
“Twenty-three states taking a greater portion of their total budgets from federal sources today than they did during the height of COVID lockdowns should be taken for what it is: an abrogation of responsibility,” said Mr. Woodlief, senior executive vice president of SPN and a senior fellow at the Center for Practical Federalism.
The report by Mr. Woodlief and Jennifer Butler, a senior policy advisor at CPF, said states should act to restore more autonomy, and gave examples of policies already enacted in some states, such as legislative oversight of federal grants, contingency planning, transparency rules and using judicial non-deference to restore legislative authority.
“Washington’s volatility is the new normal, the question is whether states are positioned to withstand it,” Mr. Woodlief and Ms. Butler wrote in the report.
Using 2023 census data, they ranked the states that are most dependent on federal funding, and found that Louisiana, Arizona, Missouri, Wyoming and Alaska are at the top and Hawaii, Kansas, North Dakota, Utah and Virginia are at the bottom.
The only states that saw declines in federal reliance since the pandemic were Idaho and New Mexico.
Louisiana receives the most state revenue from federal sources, nearly 52%, while Hawaii receives the least, roughly 26%.
They said the “Trump administration is actively rewriting the federal-state funding map through freezes and new conditions, which will affect how states budget moving forward.”
The House Democratic Appropriations Committee estimates that last fiscal year, over $410 billion in congressionally authorized funds were not seen by the states because the funds were under review or blocked.
Some provisions in President Trump’s One Big Beautiful Bill place cost pressures back on the states, with more infrastructure and discretionary grants tied to administration priorities, such as immigration enforcement.
In August, Mr. Trump signed an executive order that changed the grantmaking and grant administration process by having an agency head review grants “to ensure that they are consistent with agency priorities and the national interest.”
“Discretionary awards must, where applicable, demonstrably advance the President’s policy priorities,” the order said. It listed examples of what grants should not be used for, including race- and gender-based initiatives, illegal immigration, and others that “compromise public safety or promote anti-American values.”
The Federal Emergency Management Agency also paused the release of emergency preparedness grants, telling states to prove the size of their population to account for deported immigrants.
“Recent population shifts, including deportations of illegal aliens, create a need for updated data to ensure equitable distribution,” a FEMA spokesperson said in a statement to CNN.
The Trump administration has threatened some blue states for months that they could face funding cuts if they maintain sanctuary city status.
Mr. Trump restored some funding cuts made by his administration to Homeland Security and counterterrorism funding in New York last week.
New York had filed a lawsuit against the Department of Homeland Security and FEMA over the $34 million in cuts to transit security.
Judge Lewis A. Kaplan blocked the move, saying it was “quite likely” that the city of New York could prove the administration withdrew the money because it decided “New York should be punished for exercising its responsibilities in a way that does not satisfy the administration in what it calls the largest deportation mission in history.”
With the government shutdown extending into a second week, the president has threatened more cuts to state projects and substantial firings from agencies.
• Mallory Wilson can be reached at mwilson@washingtontimes.com.