Ohio counts on federal tax dollars less than most states
(The Center Square) – Billions in federal taxpayer dollars have flooded into states over the past year, and more is on the way, but not every state is equal when it comes to dependency on federal money.
In a new study from WalletHub released Wednesday, Ohio ranked as a state that stands on its own better than most, and individual Ohioans were even better.
The personal finance website ranked states across two areas: state residents’ dependency and state government dependency. Residents’ dependency measured an individual’s return on federal taxes paid and a state’s share of federal jobs. It also examined federal funding as a share of state revenue.
Ohio ranked 32nd in relying on federal funds, according to the study, while individual Ohioans were among the least federally needy people in the country, ranking 45th in reliance on federal tax dollars.
By contrast, state government ranked 16th, meaning its dependence on federal funds is higher than most other states.
“Federal assistance to states has come into the spotlight recently during the coronavirus pandemic, where some states have received far more money per (COVID-19) case than others,” John Kiernan, WalletHub manager editor, wrote in the report. “For example, in the initial $150 billion given to states from the stimulus package, which was allocated by population, New York got less than $24,000 per positive case while Alaska received over $3.3 million.”
The report also showed red states are altogether more reliant on federal funding than blue states, which rank 30.32 on average.
The report confirmed least-wealthy states tend to receive the most federal support. Also, states with higher tax rates needed less federal help, while states with lower rates needed more. Illinois, for example, has the highest tax rates in the nation but ranked 43rd in federal need. Alaska, which has the lowest tax rate, was the second most federally dependent state.
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