States Least Depending on Federal Money in 2025

With Independence Day right around the corner and high inflation threatening Americans’ financial independence, the personal-finance website WalletHub today released its report on 2025’s Most Independent States, as well as expert commentary. This study follows WalletHub’s report on the Most Patriotic States.

To determine the most self-sufficient states, WalletHub compared the 50 states across 39 metrics, which measure how dependent Americans are on the government and other people for finances, their jobs and personal vices. You can find highlights from the report below.

Key Stats:

• Montana has the lowest share of private industry workers employed by foreign-owned firms. That’s 4.2 times lower than in Delaware, the state with the highest share. 
   
• Michigan and Pennsylvania  have the lowest share of government workers (local, state and federal), which is 2.2 times lower than in Alaska, the state with the highest share.
   
• New Hampshire has the lowest share of residents in poverty. That’s 2.7 times lower than in Mississippi, the state with the highest share.

 View the full report and your state’s rank

Expert Commentary

Is it fair that some states are more dependent on the federal government than others?  

“The fairness of state reliance on federal funds is definitely a charged political question, but I think it may be more useful to think about how the national government chooses to invest resources rather than what the fairest approach is. For example, wealthier states usually benefit immensely when our national economy is strong. To ensure this, the federal government invests in areas of the country that aren’t as strong yet but have a lot of opportunity for growth, which can ultimately be beneficial for all of us. We also have historically felt that being American should ensure certain rights, and for a long time we have unofficially included things like primary and secondary education. In some areas guaranteeing those things at an adequate level requires more funding than the local tax base can support.”
Aislinn O’Donohoe Riley – Assistant Professor, The University of Alabama

“Before you can answer this question, you need to define dependence and then be able to put a dollar figure on the total value of that assistance. Do you include military bases, national parks, and federal agency offices in that figure? Do you count tax expenditures such as the mortgage interest deduction or the Earned Income Tax Credit? Finally, do you offset the cost of these expenditures against the total amount of revenue paid by people and businesses from each state?”
Paul Weinstein Jr. – Director, MA in Public Management, Johns Hopkins University

Should presidential campaigns be publicly funded in order to help ensure the president is as independent as possible from special interests? 

“This is a really interesting concept that has been tried to a certain degree. The reality is that this would likely require a constitutional amendment. A good first step in this direction is continuing to improve the transparency and accountability of campaign finance. The downsides to public funding that most commentators traditionally agree on is that the enormous private funds pouring into campaign can support get out the vote efforts and make it really easy for voters to hear about candidates. The former is less compelling given how low our election turnout is. All that being said, the U.S. is pretty extreme in our approach to campaign finances, and other countries see upsides to operating under different rules.”
Aislinn O’Donohoe Riley – Assistant Professor, The University of Alabama

“The problem with campaign finance today is cost (it continues to skyrocket) and the very wealthy and special interests can skirt around laws to help candidates they prefer (see Elon Musk). Public financing will only help drive up the cost. To get costs down we need to cap the amount campaigns can spend and limit contributions from outside groups. We also need to shorten the campaign season as they do in other countries. However, both these changes would require amending the U.S. Constitution, and overturning a number of Supreme Court cases – including Buckley v. Valeo – that equates the spending of money on campaigns with free speech.”
Paul Weinstein Jr. – Director, MA in Public Management, Johns Hopkins University

Should states try to make their economies more or less dependent on international trade? How? 

“Public Budgeting would generally suggest that diversifying the state’s economy is the biggest thing! So yes, they should avoid dependence, but they should do this by strengthening other types of growth as well. This may look like using tax revenue from FDI to strategically invest further in education and infrastructure. Some states have done really well at creating local economic development offices and small business incubators while still welcoming foreign trade and investment. At the end of the day, to remove reliance on international trade the states need to have an economy with strong domestic consumer spending, so supporting job growth and healthy wage growth is fundamental.”
Aislinn O’Donohoe Riley – Assistant Professor, The University of Alabama

“I think this is short-sighted. Globalization is here to stay, and ultimately the Trump tariffs will prove to be untenable. The best thing states can do is to improve their business climate. This doesn’t mean gutting regulations and slashing taxes, but it does require regulatory streamlining and simplifying their tax systems.”
Paul Weinstein Jr. – Director, MA in Public Management, Johns Hopkins University