With the cost of living rising across the country, state and local governments are spending billions of dollars on public welfare. From 2013 to 2014, public welfare expenditures increased from $519.2 billion to $544.6 billion, according to the Census Bureau, citing the expansion of Medicaid programs as the main reason why spending increased year over year.
The total spending on public welfare — which is defined as “federal aid for categorical programs,” including Temporary Assistance for Needy Families, medical assistance programs, food stamp administration, child welfare services and more — in the U.S. is more than $609 billion, according to the Census Bureau’s 2015 Annual Surveys of State and Local Government Finances.
GOBankingRates analyzed this latest census data to pinpoint the 10 states that spend the most welfare, as well as the 10 lowest welfare states. Click through to see if your state spends the most or least amount of money on these various public assistance programs.
States That Spend the Least on Welfare
Most of the states that spend the least amount of money on welfare are also some of the least populated. Other interesting correlations among these states include a lower cost of living, lower unemployment rates and lower percentages of households receiving public assistance.
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10. Hawaii: $2.52 billion
Hawaii has one of the lowest welfare expenditures. This stat might be surprising because Hawaii has the highest cost of living in the U.S., with residents spending 67.4 percent more than the national average, found another GOBankingRates study.
However, Hawaii also has a low unemployment rate with only 2.6 percent of the population being unemployed, according to August preliminary statistics from the Bureau of Labor Statistics.
9. Idaho: $2.37 billion
Idaho’s low welfare spending could be due to the fact that Idaho has some of the lowest living costs in the country. For example, Idaho’s grocery costs are the lowest in the U.S., and its child care costs are the ninth lowest, found a GOBankingRates study that identified the best and worst states for families to live a richer life.
8. Delaware: $2.31 billion
GOBankingRates ranked Delaware as one of the top states for single-parent families thanks to its high median household income and resources for low-income families, including Medicaid expansion. Still, Delaware is one of the states with the lowest welfare spending.
The low welfare spending could also be due to the state’s low population. Delaware is the sixth-least-populated state — not including Washington, D.C. — with the Census Bureau estimating its 2016 population at 952,065.
7. New Hampshire: $2.16 billion
New Hampshire’s low welfare spending could be related to the fact that the state has the highest median household income at $66,779. And, it has one of the lowest unemployment rates at just 2.7 percent.
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6. Alaska: $2.01 billion
Alaska ranks sixth-lowest for public welfare spending. The relatively low spending could be related to the state’s low population — Alaska is the third-least-populated state.
However, Alaska had the highest percentage of households receiving public assistance in 2012, according to Census Bureau data released in 2014. The report revealed 6.6 percent of households received government assistance that year.
5. Vermont: $1.73 billion
Vermont is the second-least-populated state in the U.S. Even though total public spending is relatively low, Vermont was one of the states with the highest percentage of welfare recipients in 2012. Nearly 5 percent of households received public assistance, over 50 percent more than the national average of 2.9 percent that year.
4. Montana: $1.57 billion
Montana’s low public welfare spending might be related to the state’s population. It’s the seventh-least-populated state, with the 2016 population estimated at 1,042,520.
The cost of living in Montana is just slightly above average. GOBankingRates ranked the state the 22nd most expensive place to live in the U.S., with a cost of living that is 0.8 percent higher than the national average.
3. North Dakota: $1.40 billion
North Dakota has the third-lowest public welfare spending. The state’s low overall spending is likely due to its low population — it’s the fourth-least-populated state. And, it had a low percentage (1.5 percent) of households who received public assistance in 2012.
North Dakota also boasts the lowest unemployment rate in the nation — just 2.3 percent — and a median household income of $57,181, which is higher than the national median.
2. South Dakota: $1.05 billion
Because it’s the fifth-least-populated state in the country, it’s no surprise that South Dakota is one of the lowest welfare states in terms of spending. In 2012, 2.9 percent households received public assistance, which was on par with the national average at the time.
1. Wyoming: $813.26 million
Wyoming spends the least amount of money of all 50 states on public welfare. It’s also the least populated state in the U.S., with a 2016 Census Bureau population estimate of 585,501. And, only 1.7 percent of its households received public assistance in 2012.
States That Spend the Most on Welfare
While the least populated states tend to have lower welfare spending, the states that have the highest populations also tend to have the highest welfare spending. The following 10 states that spend more on welfare also tend to have higher living costs — particularly when it comes to housing costs.
10. Michigan: $16.37 billion
Michigan ranks No. 10 in public welfare spending. However, Michigan also has the 10th-highest population.
The state had an above-average percentage of households receiving public assistance in 2012 at 3.9 percent. While Michigan has the third-lowest cost of living in the U.S., it also has a below average median household income.
9. New Jersey: $17.38 billion
New Jersey’s public welfare expenditure amount is more than $17 billion. That might be because New Jersey ranks highly for living costs. For example, it has the highest property tax rate in the country.
8. Massachusetts: $18.58 billion
The percentage of Massachusetts households that received public assistance in 2012 was above the national average at 3.2 percent. This could be due to the high cost of living in the state. Massachusetts is the fifth-most-expensive state to live in. And, the cost of housing is extremely high compared to the national average — a whopping 75 percent higher.
7. Ohio: $20.07 billion
Like Michigan, Ohio’s rank for welfare spending matches its population ranking. The state is the seventh-most-populated in the nation. And, more Ohio households received public assistance than the national average, with 3.3 percent receiving assistance in 2012.
The high public welfare spending might be due to the increase in children entering the welfare system as a result of the opioid crisis. The Northern Ohio News-Herald reports that an estimated half of all children in foster care are there because one or both parents are drug addicts. There are nearly 3,000 more children in the child welfare system today than when the opioid crisis began seven years ago, according to the paper.
6. Illinois: $20.97 billion
Illinois is the fifth-most-populated state, with an estimated 12.8 million residents. Interestingly, the percentage of households receiving public assistance in 2012 was below the national average. And, Illinois has a lower overall cost of living compared to the national average.
5. Pennsylvania: $26.79 billion
Pennsylvania ranks fifth for public welfare spending. This is likely tied to its high population — it’s the sixth-most-populous state.
Meanwhile, the cost of living in the Keystone State is only 2.8 percent above the national average. And its percentage of households that received public assistance in 2012 was just above the average at 3.7 percent.
4. Florida: $27.15 billion
Florida has a higher GDP than all but 15 countries. But it also has a higher public welfare expenditure amount than most states. Once again, the higher spending seems to correlate with the state’s population size — Florida is the third-most-populated state.
State lawmakers are currently pushing for more welfare restrictions and higher penalties for those who don’t comply with the qualifications, reports the Miami Herald. The HB 23 bill would enact tougher penalties for welfare recipients who fail to meet work requirements, but it also sets up pilot programs to help welfare recipients find higher-paying jobs.
3. Texas: $35.37 billion
Texas rounds out the top three states that spend on the most public welfare.
Living expenses in the second-most-populated state can really add up. Texas has relatively high insurance premiums and a lower employer healthcare contribution level than other states, as well as a high property tax rate and relatively high median home list price. So, residents might depend on government assistance to help with those costs.
2. New York: $61.41 billion
Considering the fact that residents need to make nearly $90,000 to live comfortably in one of the biggest cities in New York, it’s no surprise this state’s public welfare expenditure is so high.
New York has the third-highest cost of living in the country — following Hawaii and Washington, D.C. — with an average cost that’s 35.2 percent higher than the national average.
1. California: $102.84 billion
California is one of the states where you’re most likely to live paycheck to paycheck. So, it’s no surprise it’s also the state with the most public welfare spending — higher than the No. 2 and No. 3 states combined at over $100 billion.
The Golden State is the most populated state, with 39.2 million residents. And, it has a high cost of living. California also had one of the highest percentages of households receiving public assistance in 2012, with 4.1 percent receiving aid.
Full Rankings: Lowest and Highest Welfare States
Looking at the data, it’s apparent that a state’s welfare spending correlates with its population size, with the more populated states spending more on public welfare.
Furthermore, a high percentage of households receiving public assistance in a state doesn’t necessarily mean the state will rank for high welfare spending. Alaska and Vermont, for example, had two of the highest percentages of households receiving aid — yet they both ranked among the states spending the least overall on welfare.
Here’s a look at public welfare expenditures in every state. Please note that dollar amounts are in the thousands.
Public Welfare Expenditures
Public Welfare Expenditures
27. South Carolina
2. New York
33. New Mexico
34. West Virginia
9. New Jersey
37. Washington, D.C.
12. North Carolina
41. Rhode Island
45. New Hampshire
49. North Dakota
50. South Dakota
Source: U.S. Census Bureau, 2015 Annual Surveys of State and Local Government Finances 2014-15. The 2015 State Government Finances methodology contains information on data collected for fiscal year 2013. The 2015 Annual Survey of Local Government Finances methodology contains information on data collected for fiscal year 2015. All figures include the state and local government amounts. Dollar amounts are in the thousands.