According to reports, Wyoming has ranked sixth most reliant on the federal government. Alaska, West Virginia, Mississippi, Kentucky, and New Mexico are ahead of the Cowboy State. They also rate Wyoming as the most financially and demographically reliant state on the federal government, placing it first.
Jill Gonzalez, a WalletHub analyst, said-
“We looked at basically two categories: how dependent state residents are on the federal government and how independent the actual state government is federally.”
“Essentially, when it comes down to residents [dependency], we look at the return on taxes paid to the federal government. In other words, for every dollar in taxes that you give to the feds, how much are you getting back. Then in terms of state government dependency, we were really looking at the federal funding as a percentage of state revenue.”
These rankings are based on data from 2022, the most recent year for which data is available. The number of federal employment, including those at the National Park Service, the Bureau of Land Management (BLM), and the U.S. Forest Service, was another factor in WalletHub’s rankings.
“A state like West Virginia, for every dollar a resident gives to the federal government through taxes, they get around $3 back in terms of federal government services, so a three to one ratio is, you could argue great, or if you’d want to be less dependent on the federal government, you could argue concerning,” she said.
“In Wyoming, it’s one-to-one for every dollar you give to the feds. You’re pretty much getting $1 back. So that, I think, is probably the most ideal situation.”
WalletHub also placed Wyoming third for federal contracts received per dollar paid in federal taxes and last for federal grants received per dollar spent in federal taxes. It ranks first regarding financial aid received when adjusted for residents’ share of federal taxes.
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They also discovered that states with Republican governors tend to rely on the federal government for funding to a greater extent than states with Democratic governors.
“In Wyoming’s case, what’s interesting is that it is number one in terms of federal funding as a percentage of state revenue, that it has about 56 percent of its revenue coming from federal funds,” Gonzalez said. “That’s why it ranks so highly in terms of its dependency here regarding its return on taxes.”
Wyoming’s 8.06 percent tax rate ranked sixth lowest in a separate WalletHub study, behind only Alaska, Delaware, Montana, and Nevada. As of March 2022, Cowboy State also has one of the lowest total tax burdens, according to the study. According to their research, states with a Republican governor tend to have lower tax rates than their Democratic counterparts.
