Is South Dakota Budget Dependent on Uncle Sam?
(NPN) — South Dakota politicians might want to think twice before calling for reduced federal spending and transfers to states.
According to a new study by the Pew Charitable Trusts, South Dakota is one of the states most reliant on federal moneys, with Uncle Sam providing nearly 45 percent of the state budget in fiscal year 2011.
“Following the Great Recession, the share of states’ revenue coming from federal grants hit a historic high in fiscal year 2010,” Pew writes.
Pew further notes that after tapering off slightly in 2011, the percentage of states’ revenue coming from the federal government fell steeply in 2012 to 31.6 percent. Their report says this is the result of both the continued recovery of other state revenue sources and the expiration of most stimulus funding.
However, from 2008 to 2011, South Dakota’s dependence on federal money increased each year, from 36.2 percent in 2008, 39.2 percent in 2009, 44.3 percent in 2010, to 44.9 percent in 2011.
In fiscal 2011, South Dakota was the third most reliant state on federal largesse, with only Mississippi (48.8 percent) and Louisiana (46.2 percent) even more dependent.
Further, much of the Northern Plains was above the national average of 35 percent of state budgets being dependent on federal money. Only North Dakota (25.5 percent) and Minnesota (28.9 percent) were under the national average. The remaining regional states were all above the 35 percent average for fiscal year 2011: Montana, 41.7 percent; Iowa, 37.7 percent; Wyoming, 36.4 percent and Nebraska, 35.7 percent.
Alaska depends the least on federal moneys at 20 percent.
Pew adds that federal grants as a percentage of state revenue remain high by historical standards, providing nearly $1 out of every $3 in state revenue in 2012.