STATES RELIANCE ON FEDERAL AID


Article Posted on 02/22/2019


Taxes are perhaps the most apparent source of state revenue, as they constitute the vast majority of each state’s general fund budget.

 

But state governments also receive a notable amount of assistance from the federal government. In fiscal year (FY) 2016, roughly 33 percent of all state revenues consisted of federal grants-in-aid.

 

Federal aid is allocated to states for a variety of purposes, primarily to supplement state funding for programs or projects deemed to be of national interest. Taxes are perhaps the most apparent source of state revenue, as they constitute the vast majority of each state’s general fund budget.

 

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