Politics & Government

Kentucky’s budget relies on federal money more than most states, study finds

Kentucky relies on federal funds to keep its state government operating more than most other states, according to a study by the Pew Charitable Trusts. In Fiscal Year 2015, nearly 40 percent of Kentucky’s revenue came from Washington.
Kentucky relies on federal funds to keep its state government operating more than most other states, according to a study by the Pew Charitable Trusts. In Fiscal Year 2015, nearly 40 percent of Kentucky’s revenue came from Washington. The Pew Charitable Trusts

Nearly 40 percent of Kentucky’s state budget is federal funding from Washington, making the state the fourth-most dependent on outside aid to pay for the services it provides for its citizens, according to a study released Tuesday.

The Pew Charitable Trusts compared the budgets of all 50 states from 2000 to 2015 to see how much money they collected from their own citizens through taxes compared to how much they received from the federal government in various forms of assistance.

Kentucky consistently relied more on federal funds than the 50-state average, with the biggest increases seen during the federal stimulus spending that followed the 2008 recession and, more recently, the state’s decision to expand Medicaid coverage to the previously ineligible working poor under the Affordable Care Act. The federal government covered the cost of that expansion.

Federal funds also help the state pay for health care, education, transportation, workforce training, infrastructure improvements and other services.

In Fiscal Year 2015, 43.5 percent of Kentucky’s state revenues came from state taxpayers, 39.5 percent came from the federal government and the remaining 17 percent came from service charges, local funds and other sources, according to Pew. Overall, the state spent $30.3 billion that year, of which $11.7 billion was federal funds.

The 50-state average for federal assistance in 2015 was 31.9 percent of revenues. Only Louisiana (42.2 percent), Mississippi (41.1 percent) and Arizona (39.8 percent) relied more on the federal government than Kentucky.

Kentucky is also one of the poorest states. According to the U.S. Census Bureau, 18.9 percent of Kentucky’s population lived in poverty in 2015, compared to a national poverty rate of 13.5 percent.

John Cheves: 859-231-3266, @BGPolitics

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