South Carolina is one of the most federally dependent states in the U.S., according to a recent study.
WalletHub recently ranked South Carolina the 9th most federally dependent state in the nation, while New Mexico, Alaska and Mississipi took the top 3 spots.
The study compared the 50 states based on three metrics — return on taxes paid to the federal government, share of federal jobs, and federal funding as a share of state revenue.
According to the first metric — how much the federal government spends per state resident vs. the amount each resident is paying in federal income tax — South Carolina ranks No. 1.
South Carolina receives $4.51 back from the government for every $1 residents pay in federal tax, according to data from the Internal Revenue Service, U.S. Census Bureau, USAspending.gov and Bureau of Labor Statistics.
In other words, South Carolina is taking more from the federal government than it gives. It’s a “taker” state.
The study found that Kansas was the least dependant state in the U.S., followed by other “giver” states such as New Jersey and Delaware.
Half of the top 10 most federally dependent states are in the South, according to the study. According to a 2014 Atlantic article, that isn’t a coincidence.
“During the many decades in the 20th century when the South was solidly Democratic, its congressional representatives in both the House and the Senate, enjoying great seniority, came to hold leadership positions on powerful committees, which they used to send federal dollars back to their home states in the form of contracts, projects, installations,” John Tierney of the Atlantic wrote.
South Carolina has a low GDP and a high dependency on federal goverment, the WalletHub study found (see graph below).
WalletHub is not the only study to come to this conclusion. A 2020 study by SmartAsset ranked South Carolina as the No. 9 most federally dependent state in 2020.
That study looked at the states’ ratio of earnings for federal workers to private workers, ratio of federal funding to income taxes, and federal share of state government revenue.
South Carolina’s heavy reliance on federal tax dollars is a big reason why the U.S. Census was so important for South Carolina — and why experts were worried the state would lose out on billions of tax dollars due to an undercount.
So if South Carolina is getting so much money from the federal government on top of its state taxes, why does the Palmetto State continue to rank at the bottom for education? Why are our roads still terrible? Why don’t our prisons have enough guards?
Our founding editor Will Folks likes to call this the Palmetto State’s “Mo Money, Mo Problems” government.
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