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Which states get the most federal money?

The government spent $9,184 per person last year. But the money was not distributed evenly among the 50 states.

By Staff writer / July 24, 2009

New Mexico gets a large share of federal money, per capita, in part because of the salaries connected to its national laboratories, including Sandia.

Sandia National Laboratories/AP

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Federal spending rose last year at a nearly double-digit rate – 9.3 percent – even before the government embarked on big economic rescue efforts such as bank bailouts and the Obama stimulus.

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According to a Census report released this week, the federal government spent nearly $2.79 trillion domestically during fiscal year 2008, which ended last September. That amounts to $9,184 for each person living in the United States.

But that $9,184 was not distributed among evenly among the 50 states. The top state, Virginia, gets more than twice as many federal dollars for each resident as Utah, the bottom state.

(To see the state-by-state breakdown, See Page xxii of the Census report.)

The Top 5:

1. Virginia ($15,256 spent per capita)

2. Maryland ($13,829)

3. Alaska ($13,730).

4. Kentucky ($12,242)

5. New Mexico ($12,017)

The Bottom 5:

46. Minnesota ($7,326)

47. Oregon ($7,264)

48. Wisconsin ($7,132)

49. Nevada ($6,638)

50. Utah ($6,255)

Is this the way things should work? If you’re from Utah or Nevada, it certainly may not seem that way. But whether the distribution is fair or not, many factors contribute to it:

Utah vs. New Mexico: Top and bottom

Consider that the Beehive State is a desert state with its share of high-tech firms, sagebrush, and fewer than 3 million residents. So is New Mexico. Yet Utah ranks last in the ranking of federal largess, while New Mexico is perennially near the top.

In a news article about its thin slice of federal pie, the Deseret Morning News in Salt Lake City attributes the difference partly to Utah’s relatively young population, so there are fewer Social Security checks and Medicare payments than most states have.

Also, the economy there hasn’t been hit as hard by recession, so a rise in jobless benefits nationwide last year didn’t show up as much of a trend in places like Provo. New Mexico, by contrast, gets an outsize share of procurement contracts and federal salaries – many tied to Energy Department labs in the state.

Virginia and Alaska: Very near and very far

Virginia and Maryland, of course, rank near the top because of their proximity to Washington, D.C. Lots of federal workers live in those states.

Alaska Republican politician Sarah Palin may not be a fan of big government, but her home state is also an outsized gainer from federal programs – especially military salaries and procurement.

The state known for the “bridge to nowhere” also scores big on transportation grants.

You get what you pay for – or not?

Research by the Tax Foundation casts the state-by-state contrasts in a different light, looking at what states get back relative to the tax dollars they send to Washington.

In a 2007 study (drawing on data from 2005) the Tax Foundation found that New Mexico ranked first, with residents getting back $2 in spending for every $1 they paid in federal taxes. The next leading states were Mississippi, Alaska, Louisiana, and West Virginia. At the bottom of the list were New Jersey (residents got 61 cents for every dollar of taxes), Nevada, Connecticut, New Hampshire, and Minnesota