Pew study: 31.9% of state revenue federally funded in fiscal 2015

FEDERAL FUNDING COMPRISED OF 31.9 percent of state revenue in fiscal 2015. /COURTESY THE PEW CHARITABLE TRUSTS
FEDERAL FUNDING COMPRISED OF 31.9 percent of state revenue in fiscal 2015. /COURTESY THE PEW CHARITABLE TRUSTS

PROVIDENCE – The federal share of state revenue in Rhode Island rose to 31.9 percent in fiscal year 2015, a 1.2 percent increase from the previous fiscal year, according to a Pew Charitable Trusts study released Tuesday. Fiscal year 2015 marks the first full year of Medicaid expansion in some states, and the new federal share constitutes the third-highest level of aid to states since 1961. Of the 29 states that recorded increases in the federal share of their revenue, 22 had opted to expand Medicaid.

“For a second consecutive year, federal dollars as a share of state revenue increased in a majority of states—29 in fiscal 2015,” the report said. “Health care grants have been the main driver of increases in federal funding to states in recent years.”

Rhode Island fell squarely in the middle of the pack, ranking No. 24 for highest federal share of state revenue, 32.9 percent, a 1.7 percent drop over the previous fiscal year.

The drop follows a rise of 0.9 percent from fiscal year 2013 to fiscal year 2014 to 34.6 percent when the state opted to expand Medicaid coverage. In fiscal 2014, Rhode Island had ranked as No. 6 for highest percentage of federal funding as a percentage of state revenue in the nation. Since at least 2001, the state has consistently had at least a percentage point greater federal share of state revenue than the national average.

- Advertisement -

Rhode Island and Massachusetts revenue breakdown:

Rhode Island:

  • 4 percent of state revenue came from taxes while 10.7 percent came from service charges and 12.4 percent from miscellaneous sources. 0.6 percent of state revenue came from local funds. (32.9 percent of revenue came from federal funding.)

Massachusetts:

  • 9 percent of Massachusetts revenue was derived from taxes while 27.9 percent came from federal funds. 9.7 percent came from service charges and 9.5 from miscellaneous sources. 1.1 percent came from local funds.
/COURTESY THE PEW CHARITABLE TRUSTS
/COURTESY THE PEW CHARITABLE TRUSTS

New England federal funding as a share of state revenue for fiscal 2015:

Connecticut:

  • 8 percent of state revenue was federal funding
  • No. 6 for lowest share of state revenue in nation
  • 1 percentage points below national average.

Massachusetts:

  • 9 percent of state revenue was federal funding
  • No 12 for lowest share of state revenue in nation
  • 4 percentage percent below national average share

New Hampshire:

  • 7 percent of state revenue was federal funding
  • No. 20 for lowest share of state revenue in nation
  • 2 percentage percent below national average share

Rhode Island:

  • 9 percent of state revenue was federal funding
  • No. 24 for highest share of state revenue in nation
  • 1 percentage percent above national average share

Maine:

  • 3 percent of state revenue was federal funding
  • No. 17 for highest share of state revenue in nation
  • 4 percentage percent above national average share

Vermont:

  • 35 percent of state revenue was federal funding
  • No. 14 for highest share of state revenue in nation
  • 1 percentage percent above national average share

Though the study reveals a historically high federal share of state revenue in , it still falls below the aftermath of the Great Recession which saw stimulus dollars injected to the economy at great rates and plummeting state tax revenues which together produced a higher share of 35.5 percent in fiscal year 2010.

The 10 year pre-recession 50 state average of federal funding as a share of state revenue was calculated as 28.5 percent in the report.

The study was based on data from the U.S. Census Bureau.

Kyle Borowski is a PBN contributing writer.