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Trump’s Budget Threatens States and Their Residents

February 12, 2020 at 4:45 PM

President Trump’s 2021 budget would slice federal aid to state and local governments that provides health care, K-12 education, and more.

Large federal aid cuts would do lots of damage in states. Federal grants provide roughly 30 percent of state budgets across the country, and over 40 percent in some states, according to the most recent data (see table). The President’s budget would sharply cut Medicaid — the largest single source of federal funding to states. Plus, it would deeply cut funding for non-defense discretionary programs, the part of the budget that includes most other grants to states, including funding for schools, child care, and housing assistance.

States would probably respond to such deep cuts primarily by reducing the services they provide to their residents, likely worsening economic inequality and racial disparities.

Federal Grants to States, State Fiscal Year 2018
State Federal Grants (Millions) Share of State Spending
Alabama $9,958 36.5%
Alaska $3,614 35.1%
Arizona $15,999 42.7%
Arkansas $7,920 30.9%
California $92,352 34.3%
Colorado $9,928 24.9%
Connecticut $6,141 18.5%
Delaware $2,492 23.0%
Florida $27,401 34.9%
Georgia $14,446 28.1%
Hawaii $2,628 17.3%
Idaho $2,684 33.7%
Illinois $16,940 23.3%
Indiana $13,578 40.4%
Iowa $6,260 26.8%
Kansas $3,773 23.7%
Kentucky $12,441 36.5%
Louisiana $12,085 38.7%
Maine $2,698 32.1%
Maryland $12,147 27.8%
Massachusetts $14,432 25.3%
Michigan $20,733 36.6%
Minnesota $11,353 28.5%
Mississippi $7,787 39.6%
Missouri $8,360 32.1%
Montana $2,863 41.2%
Nebraska $3,101 25.5%
Nevada $4,624 32.4%
New Hampshire $2,297 37.5%
New Jersey $15,628 25.7%
New Mexico $8,496 41.5%
New York $56,808 34.7%
North Carolina $15,296 30.7%
North Dakota $1,472 25.0%
Ohio $15,113 21.7%
Oklahoma $7,552 33.3%
Oregon $10,476 25.8%
Pennsylvania $29,145 34.3%
Rhode Island $2,996 32.4%
South Carolina $8,593 34.0%
South Dakota $1,407 31.6%
Tennessee $12,618 36.9%
Texas $39,376 34.2%
Utah $3,924 26.5%
Vermont $1,926 33.9%
Virginia $10,163 19.5%
Washington $12,293 26.7%
West Virginia $4,481 26.6%
Wisconsin $11,575 24.0%
Wyoming $926 20.9%
United States $603,917 30.5%

Source: CBPP calculations and NASBO data from State Expenditure Report, November 2019


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