During the latest federal government shutdown, there were more state legislatures in session than in any previous shutdown in the nation’s history. And yet, there’s been precious little discussion of how states remain highly dependent on aid from Washington, D.C. This is as good as any time for that to change.
Louisiana is the state most reliant on money from the federal government: 42 percent of its budget comes from the feds, followed closely by Mississippi. The least D.C.-dependent state is North Dakota, where just 18.4 percent of its total budget comes from Congress, according to the latest data from the nonpartisan Tax Foundation.
Here in Idaho, about a third of our budget comes from the federal government, but that number will increase if the Idaho Supreme Court allows the state to take on more Medicaid recipients via a voter-passed initiative. But even without the Obamacare Medicaid expansion, Idaho’s dependency on Washington is still projected to climb through 2020 and beyond. That’s despite transparency legislation passed in 2015, which requires state agencies to provide a grant-by-grant breakdown of federal funds that flow into Idaho. This report about federal funds in Idaho is updated annually so lawmakers have fresh information about which federal grants drive our D.C. dependency. The law also requires agencies to determine how they would survive a partial or complete loss of federal aid.
The heightened transparency was intended to give legislators a closer look at a part of the budget that gets too little attention and encourage them to take action on what they find. For example, lawmakers can use the report to identify grants that require spending state general-fund dollars long after the federal money has dried up. Lawmakers can also see grants that have been awarded without legislative approval of the policy the grant seeks to address, and they can retract the state spending. The law was intended to help legislators make sure that critical programs that Idahoans depend on aren’t reliant on Washington’s whims.
The transparency law aside, the state’s dependency on the federal government continues to climb. Less than 20 years ago, Idaho received about $1 billion from the federal government. Today, it’s about $2.8 billion. In the four years since the federal grant transparency requirement was enacted, the state’s dependency on the federal government has grown 17 percent.
Even without the federal government shutdown, it’s obvious that federal spending is out of control—the national debt is nearly $22 trillion as of this writing. States are part of the problem because they accept federal grants for programs the federal government was never constitutionally designed to run. Many state lawmakers seemingly don't care that the D.C. gravy train might catastrophically derail, causing real consequences for real people.
Consider, for example, that 38 million Americans participate in the federal government’s food stamp program, about 170,000 of whom live in Idaho. States are now warning food stamp recipients to plan a replacement for the federal aid they receive to buy food, lest the federal government shutdown impacts the distribution of money for groceries come March. If the federal government were to remain closed or close again, states are ill-prepared to help their own residents apart from fielding phone calls from worried, hungry constituents.
That Americans are dependent on the central government for food assistance is, in a word, crazy. But the craziness extends to myriad programs across virtually every policy concern. Also jeopardized by D.C. dependency are funds that maintain programs for the elderly, schoolchildren, law enforcement, and the environment.
State legislatures have as good a reason as they’ve ever had to confront head on the problem of federal dependency. Here’s hoping they act now before it’s too late.