A recent analysis from the personal finance website WalletHub found that Wyoming ranks sixth most dependent on the federal government. The Cowboy State comes in behind Alaska, West Virginia, Mississippi, Kentucky, and New Mexico respectively. They also rank Wyoming first in state government’s financial dependency on the federal government and 24th for state residents’ dependency on it.
“We looked at basically two categories: how dependent state residents are on the federal government and how independent the actual state government is federally,” said Jill Gonzalez, a WalletHub analyst. “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.”
The most recent data for this rankings was from 2022. Other factors in WalletHub’s rankings included how many federal jobs there are in each state, which include employees of the U.S. Forest Service, the Bureau of Land Management (BLM), and the National Park Service, among others.
“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 actually one to one for every dollar that you're giving to the feds, you're pretty much getting $1 back. So that, I think, is probably the most ideal situation.”
WalletHub also ranked Wyoming third in the amount of federal contracts received per dollar in federal taxes paid and the lowest in the amounts of grants received per dollar in federal taxes paid. It also ranks number one for the amount of financial assistance received per dollar in federal taxes paid. They also found that Republican states are generally more financially dependent on the federal government than Democratic ones are.
“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 state revenue coming from federal funds,” Gonzalez said. “That's why it ranks so highly in terms of its dependency here in terms of its return on taxes.”
Another WalletHub analysis listed Wyoming as having the fifth lowest tax rate at 8.06 percent behind Alaska, Delaware, Montana, and Nevada respectively. It also found that the Cowboy State had one of the lowest total tax burdens as of March 2022. Republican states generally impose lower taxes than their Democratic counterparts according to their findings.
