As the nation emerged from the Great Recession, federal dollars made up a bigger proportion of states’ revenue from fiscal year 2009 to 2012 than at any other time in the past 50 years. After peaking at 35.5 percent in fiscal 2010, however, the share fell back within its historical range in fiscal 2013, dropping to 30.0 percent.
Even at 30.0 percent, the federal share of 50-state revenue was above its 10-year prerecession average of 28.5 percent. Federal dollars remained the second-largest source of states’ money, accounting for approximately $513.5 billion of the $1.7 trillion collected by state governments in fiscal 2013.
The federal share fell for the third straight year in fiscal 2013. The decline reflected both the final phaseout of temporary economic stimulus funds from the federal government and the continuing recovery of states’ tax collections, their leading revenue generator. Changes in either revenue source affect the ratio of federal to total dollars.
Data going back to 1961 show that the federal government historically has provided about one-quarter to one-third of states’ general revenue, which includes tax collections and other funds such as public university tuition, tolls, and lottery income. States use federal funds for a range of programs, particularly health care, education and training, and transportation and other infrastructure.
Federal shares vary across the country. Fiscal 2013 data show that:
The federal share of state revenue indicator measures the combined effects of swings in state and federal funding. A higher or lower percentage does not necessarily indicate a problem for state budgets. Between fiscal 2010 and 2013, for example, federal shares dropped largely because states’ own funds generally increased while federal funds generally decreased. But a decline could spell budget challenges for states that lose federal funds before their own revenue has fully recovered.
Download the data to see individual state trends. Visit The Pew Charitable Trusts’ interactive resource Fiscal 50: State Trends and Analysis to sort and analyze data for other indicators of state fiscal health.