Federal Grants to States Rose About 40% Over the Last 10 Years
Federal grants to states are about 40 percent higher overall, after adjusting for inflation, than they were in 2008, when the recession began, but that growth has not been steady. Federal stimulus aid to states resulted in a spike during and immediately after the recession, with total grants increasing by 56 percent in the first year after the American Recovery and Reinvestment Act of 2009. By 2013, however, that temporary aid had almost entirely been phased out, and grants declined nearly 30 percent from the 2009 peak. Then, in 2014, federal grants to states began climbing again and remain well above pre-recession levels today. Medicaid increases are the main drivers of this upward trend, while funding for other programs, such as education and transportation, is declining.