Louisiana is ranked No. 2 in the nation among states that rely heavily on federal assistance as a source of income, with as much as 40.1% of the state’s revenue in fiscal year 2014 coming from the U.S. government, according to a new report released today by the Tax Foundation.
The state follows Mississippi—the state most heavily dependent on federal aid with 40.9% of revenue coming from the federal government—in the ranking.
According to the foundation, states like Louisiana and Mississippi tend to be more heavily reliant on the federal government because they have modest tax collections and relatively large populations of low-income residents.
The opposite is the case for less reliant states like North Dakota, which received only 16.8% of its revenue from the federal government.
Those states, the foundation says, have higher tax collections and smaller populations of low-income residents. North Dakota also exports some of its tax burden in the form of severance taxes, the foundation adds.
During fiscal year 2014, more than 60% of federal spending in states went toward benefit payments to individuals, including Medicare and Social Security. Funding also was provided for education, transportation, housing and agriculture, among other sectors.