Fact check on federal dependency


August 29, 2019 9:48AM

From the group whose tag line is to ALWAYS YELL THE TRUTH, they really need to fact check their holler.

A recent twitter post by The Tennessee Holler purports that Tennessee is one of the worst states when it comes to federal government dependency:


Side note—this is also from the group that wants us to take even more federal government money for Medicaid expansion, but I digress.

This study is not only misleading in the way it calculates federal dependency. It’s just plain wrong. Here are the reasons why.

  • The study calculates dependency based on a percentage of a state’s budget. Basically, this means that because Tennessee has less revenue (see lower taxes), it will appear to take more federal dollars if the study is just based on a percentage of that state’s budget. This means a state taking more federal money (California cough cough), but taxing their residents at a much higher rate would score “better” than a low tax state taking the same amount or less federal money.
  • Dollar for dollar, Tennessee is nowhere near the top of the list taking federal tax dollars. California for example receives $436 billion in total revenue from the federal government vs. Tennessee’s $76 billion.
  • The Rockefeller Institute of Government published a report in January 2019 titled “Giving or Getting? New York’s Balance of Payments with the Federal Government,” which shows what states give to the federal government versus what they receive. If you remove grants, contracts, and federal employee wages (like TVA employees) from the equation to get a true calculation of what Tennessee gives vs. what it receives, it shows we give virtually the same amount in tax dollars per capita as we receive back ($7,764 paid per capita and receives $7,807). We definitely pay our fair share and receive a fair share of our tax dollars back from the federal government for Tennessee residents.

All in all, I’ll take a low tax business friendly state over a tax dependent state like California any day of the week.