Top 10 States That Get the Most Federal Dollars Per Resident

When it comes to understanding where your tax dollars actually go, the answer might surprise you. According to data from USASpending.gov, total federal obligations per capita can vary dramatically across states, with some receiving more than $24,000 per resident while others receive less than half that amount. These numbers are important because they help shape local economies, influence the cost of living, and quietly determine how far the dollar can stretch across the country. 

If you try to look under the hood, it’s easy to find a way, as examples like military installations, federal contractor hubs, all play a role, as do aging populations that are drawing on Social Security, Medicare, Medicaid, and government research facilities, and direct transfers to state and local governments all contribute to the total. States that house major defense assets, serve as headquarters for federal agencies, or have demographics that draw heavily on the kinds of entitlement programs that naturally receive more capital. 

What Federal Obligations Per Capita Actually Tell You

When you think about how these kinds of numbers can be measured, it really comes down to something very simple in that federal obligations per capita measure the total amount the federal government spends in a given state, and then divide this number by its population. This math includes but isn’t limited to Social Security checks, Medicare reimbursements, defense contracts, federal employee salaries, any grants given to universities, and, of course, infrastructure funding provided by Congress. In other words, it’s a very broad measure that looks to capture the entire amount of federal money that takes place in each state. 

The states that rank highest often share certain traits like having an outsized military base or federal agency presence, an older population that pulls more from entitlement programs, or some combination of both. A few states might even surprise you because they are not traditionally thought of as dependent on federal spending. The data is clear, and for retirees and long-term investors alike, the question of where economic support comes from is a list well worth understanding. 

10. Massachusetts 

Massachusetts has plenty of scenic living, along with federal funding.

• $16,553 per resident

Rounding out the top ten, Massachusetts receives roughly $16,553 per capita in federal obligations. Unlike other states on this list, the spending here is largely weighted toward research and education, with the National Institute of Health, Department of Defense, and other federal agencies directly subsidizing substantial grant money into the state’s high concentration of universities, hospitals, and research institutions. 

9. Kentucky

• $17,074 per resident

Kentucky ranks ninth, with approximately $17,074 per resident in federal spending. Fort Knox and Fort Campbell are significant military installations that bring defense payroll and contract spending into the state, while the older and lower-income population drives substantial Social Security, Medicare, and Medicaid outlays. 

8. West Virginia

• $17,572 per resident

West Virginia ranks eighth with roughly $17,752 in federal obligations per capita, as the state has one of the oldest populations in the country and one of the lowest per capita income levels. This means that a larger share of its federal spending comes from Social Security, Medicare, Medicaid, and other direct transfer payments. The presence of the FBI’s Criminal Justice Information Services Division in Clarksburg also contributes to the state’s government payroll. 

7. Hawaii

• $17,734 per resident

Unsurprisingly, the presence of Pearl Harbor and a significant military presence helps pour federal money into Hawaii. Between federal employees’ salaries, veterans’ benefits, and the high price tag of living on a remote island, Hawaii’s high cost of living directly drives the 7th-highest federal spending per capita in the country. 

6. Connecticut 

• $18,198 per resident

While Connecticut ranks sixth on this list, with roughly $18,198 per capita, its residents pay among the highest per-capita federal taxes in the country. The state’s position on this list is driven largely by defense contracting, with companies like Electric Boat, General Dynamics, and Pratt & Whitney pulling in billions of federal contracts. 

5. Maine

For residents of Maine, the high federal funding comes alongside outstanding views.

• $18,296 per resident

Maine ranks right in the middle of the list with an older-than-average population that draws a larger share of Social Security, Medicare, and other related programs compared to the national average. Military-rated spending also plays a big role with shipyards that pull in substantial federal contract dollars. On the plus side, Maine residents live a quieter life with both rural and coastal living. 

4. Maryland

• $21,275 per resident

Coming in fourth place, Maryland benefits in a major way from its proximity to Washington, D.C., with the National Security Agency, Fort Meade, and the Social Security Administration headquarters, making it a state that is heavily anchored by government spending and the well-paying jobs that often come with it. 

3. New Mexico

• $21,481 per resident

Receiving approximately $21,481 per capita in federal obligations, New Mexico is a big recipient of national defense and energy research with facilities like Los Alamos National Laboratory and other military installations. Of course, it doesn’t hurt that New Mexico has a low cost of living, where retirement income stretches a little bit further than in many other states. 

2. Virginia

• $23,975 per resident

Virginia is sitting firmly in second place for federal spending per capita, and is unsurprisingly due, at least in part, to its proximity to Washington, D.C. The state is home to the Pentagon, CIA, and a massive concentration of defense contractors, and dozens of military installations, including the world’s largest naval base at Norfolk. 

1. Alaska

Alaska has a strong military presence that brings in significant federal funding.

• $24,796 per resident

The most remote state, Alaska, is leading all 50 states with approximately $24,796 in federal obligations per capita. The state’s vast geography, remote living, and large military presence all play a significant role in this large number. Federal land management across more than 60% of the state, Native American program funding, and the highest cost of delivering services to remote locations in remote areas.