Washington Among States Least Reliant On Federal Funding: Study

SEATTLE — Washington is one of America's most financially independent states, according to a new study by MoneyGeek.

For its study, MoneyGeek says it looked at the return on federal tax dollars, the proportion of state revenue from the federal government, child tax credits, and per capita GDP to determine which states were the most and least reliant on federal funding. And according to their findings, Washington is doing alright, ranked at the third least dependent on the federal government.

According to their findings, the top ten least dependent states were:

1. New Jersey
2. Nebraska
3. Washington
4. Minnesota
5. Illinois
6. Kansas
7. Delaware
8. California
9. Utah
10. Colorado

One reason Washington ranked well: just 14.54 percent of state revenues came from federal funding, and the state offered up a $0.94 return on tax dollars. Plus, Washington has a strong GDP considering its size, at roughly $2,474,820 million dollars.

Meanwhile, the most dependent states were:

1. New Mexico
2. West Virginia
3. Mississippi
4. Alaska
5. Montana
6. Kentucky
7. Alabama
8. Arizona
9. Louisiana
10. Vermont

One of the deciding factors, according to MoneyGeek, is the state's political leanings. Eight out of ten of the most dependent states were Republican-leaning.

"A really conservative state might choose to tax itself at a lower rate, which means by default, they can give fewer state-funded services," said Kathy Fallon, a director for the Public Consulting Group. "That can exacerbate the situation."

MoneyGeek says its study shows that Democratic-voting blue states "tend to be wealthier" and as a result, pay more to the federal government than they receive. That said, whether a state is red or blue is not the only factor that decides dependency.

"If red states pay less in taxes than they receive in benefits, that's because they are generally poorer and program rules are progressive — not because they are 'takers' while blue states are 'donors' in any value-laden sense," says Mark Shepard, assistant professor at the Harvard Kennedy School of Government.

>> Read the full study from MoneyGeek.