Report: Ohio among the least federally dependent states

Ohio is one of the least federally dependent states, according to a new report from WalletHub.

The rankings looked at state residents’ dependency on federal funding, a number calculated based upon the amount of federal funding a state receives compared to Internal Revenue Service collections in the state.

The second half of the ranking was a look at federal funding as a share of state revenue, which counted the portion of state revenue that arrived as intergovernmental aid from the federal government in 2020.

Ohio ranked near the bottom, 46th, for state residents’ dependency on federal funds but ranked 23rd on state governments’ dependency.

Michael J. Hicks, the director of Ball State’s Center for Business and Economic Research, said the subsidization comes in three forms: wealthy paying higher income taxes; the federal government paying a higher percentage of Medicaid costs; and direct payments to residents for programs such as Temporary Assistance for Needy Families, Supplemental Nutrition Assistance Program and Supplemental Security Income.

“The federal government subsidizes both state governments and people in poorer places,” Hicks said. “While parts of that system may be modified, it is done to improve the lives of poorer families.”

The report also showed that blue states – based on how they voted in the 2020 presidential election – were less dependent on federal funding than red states. Red states averaged a 20.32 ranking among the 50 states while blue states averaged 30.68.