New Mexico finished third in a study by the Tax Foundation examining which states rely most on federal aid funding as a percentage of their general-fund revenue.
What the state received in funding from the federal government amounted to 41.2 percent of New Mexico’s general revenues, which include all tax revenues but not such items as investment income from state retirement funds or revenue received for providing utility services, according to the analysis.
Aid provided to states can come in the form of competitive federal grants, or the federal funds can be allocated based on formulas established by statute, the Tax Foundation study says. Those states receiving a greater share of federal funds tend to have more low-income residents and below-average lower tax collections, according to the foundation.
The states most dependent on federal funds were Mississippi, Louisiana and New Mexico. The study used fiscal-year 2016 data, which was the most recent available.
Which States Are Most Dependant on Federal Aid?
|State||% of Federal Aid||Ranking (Most to Least)|