Taxes
Federal Spending by State: Which States Get the Most Government Money
By Live or Die Here Research Desk · September 3, 2026
Some states pull in far more federal dollars than they send to Washington. The gap between the biggest recipients and biggest contributors runs into the trillions annually, and it shapes everything from local tax burdens to public services.
Virginia collects more than $17,000 in federal spending per resident annually, more than any other state, while New Jersey gets back less than 75 cents for every dollar its residents send to Washington. That gap is not an accident. It is the predictable result of where military bases, federal agencies, and entitlement populations are concentrated.
How Federal Spending Is Counted
The federal government spent approximately $7.04 trillion in fiscal year 2025 (the most recent full-year figure available), averaging roughly $20,600 per American. That total includes direct payments to individuals like Social Security and Medicare, grants to state governments, federal contracts, and wages paid to federal employees and military personnel.
States do not receive one check. Federal money flows through dozens of channels, and a state can rank high on one measure and low on another. Virginia tops overall per-capita spending largely because of Pentagon contracts and the enormous federal workforce in the D.C. metro area. New Mexico and Alaska rank high because of military installations and high rates of Medicaid enrollment relative to their populations.
The Biggest Recipients Per Capita
Based on federal fiscal data through 2025 (the most recent state-level breakdowns available as of this writing), these states consistently receive the most federal spending per resident:
Virginia leads with estimated federal spending exceeding $17,000 per capita. The Pentagon, dozens of defense contractors, and the CIA's headquarters in Langley drive that number.
New Mexico receives approximately $14,000 per capita. Federal land ownership, two major Air Force bases, and high Medicaid participation rates all contribute.
Alaska pulls in roughly $13,500 per capita, supported by military installations, federal land management spending, and infrastructure grants tied to its geographic isolation.
Maryland sits close to Alaska, driven by NIH, the NSA complex in Fort Meade, and proximity to the federal workforce concentrated in the Baltimore-Washington corridor.
Kentucky receives a disproportionate share through Social Security, Medicare, and Medicaid relative to what its residents earn and pay in federal taxes.
The Biggest Contributors (Who Pays In)
The states that send more to Washington than they get back tend to be high-income states with large tax bases and younger, wealthier populations that lean on federal benefits less.
New Jersey consistently returns less than $0.75 per dollar paid in. Its high average incomes mean residents pay enormous federal income tax bills while the state has relatively few military bases or federal facilities.
Connecticut and Massachusetts follow a similar pattern. High earners, concentrated financial and tech sectors, and relatively low federal transfer dependency mean both states are net donors by wide margins.
New York and California pay massive gross totals into the federal system given their population sizes, though both also receive large absolute dollar amounts back. On a per-capita net basis, both are donor states.
If you live in a high-tax, high-income state, you are subsidizing federal services delivered elsewhere. That is worth knowing when evaluating your total government cost. See The True Cost of Living in High-Tax States for a fuller breakdown of what residents actually pay across all levels of government.
What This Means If You Are Choosing Where to Live
Federal spending flows tell you something important about a state's fiscal structure. States that receive heavy federal transfers often have lower state and local tax burdens because Washington is effectively covering part of the bill. States that are net contributors tend to fund more of their own public services directly.
For retirees specifically, states with large federal transfer footprints often have well-funded Medicaid programs that cover long-term care costs. That matters. See Best States for Retirees to Avoid Taxes for a state-by-state comparison that includes this factor.
For anyone focused on what they keep, the net donor versus net recipient status of your state is one more variable in the total tax picture. Use the Live or Die Here state comparison calculator to model your full tax load by state.
Frequently Asked Questions
What state gets the most federal money per capita?
Virginia receives the most federal spending per capita, estimated at more than $17,000 per resident annually as of the latest available data. That figure is driven by Defense Department contracts, federal agency headquarters, and one of the largest concentrations of federal employees in the country.What is the federal government's budget for 2026?
The federal budget for fiscal year 2026 is projected to exceed $7.3 trillion in total outlays. FY 2025 actual spending came in at approximately $7.04 trillion, an increase of roughly $309 billion over the prior year's pace through July 2025.Which state donates the most to the federal government?
New Jersey is consistently the largest net donor state on a per-capita basis, receiving less than $0.75 for every dollar its residents pay in federal taxes. Connecticut and Massachusetts rank second and third among net contributor states by most measures.Key Takeaways
- Virginia receives more than $17,000 in federal spending per resident, the highest of any state, driven by defense contracts and federal agency concentration.
- New Jersey gets back less than $0.75 for every federal tax dollar paid, making it the largest per-capita net donor state in the country.
- Total federal spending reached approximately $7.04 trillion in FY 2025, averaging $20,600 per American across all states.
Sources
- U.S. Treasury Fiscal Data, Federal Spending Explorer: https://fiscaldata.treasury.gov/americas-finance-guide/federal-spending/
- USASpending.gov, State-Level Federal Award Data: https://www.usaspending.gov/
- Tax Foundation, Federal Taxes Paid vs. Spending Received by State: https://taxfoundation.org/research/all/federal/federal-spending-tax-burden-by-state/
- Kaiser Family Foundation, Total State Expenditures per Capita: https://www.kff.org/other/state-indicator/total-state-expenditures-per-capita/
- National Association of State Budget Officers, State Expenditure Report: https://www.nasbo.org/reports-data/state-expenditure-report
Compare how your state's federal funding picture stacks up against your total tax burden at liveordiehere.com.
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