Minneapolis Review

A new study from the Tax Foundation says that 26% of Minnesota's general fund budget is comprised of federal grants-in-aid, which is the fifth-lowest rate in the nation.

The Tax Foundation analysis is based on fiscal year 2017 numbers. State-levied taxes make up the majority of a state's general fund budget. The study shows that on average, state budgets contain a federal funding share of 22.9%. 

According to The Center Square, programs funded by federal grants include Medicaid payments, public education and state infrastructure projects. Federal aid primarily supplements state funding. According to the Tax Foundation, there are several types of grants available to states, including competitive grants and formula grants.

Because federal grants-in-aid are made up of income tax revenues, states with higher reliance on federal aid tend to have a large number of low-income residents and low levels of state tax revenue.

Even though states like Alaska and North Dakota are resource-rich and have a small low-income population, they still receive a higher share of federal funds.