We’re number 1! That’s the finding of a new WalletHub report on the most federally-dependent states. New Mexico is the single most federally-dependent state in the nation.
Specifically, New Mexico gets more federal contracts and more grants than does any other state in the union as seen below. Our friends on the left love to tell us how great Medicaid (the fastest-growing and most generous grant program) is an “economic stimulus.” But, the reality is that being reliant on the federal government is hardly a path to prosperity for US states.
The dependence bred by those federal programs is not helpful, but we at the Rio Grande Foundation would argue that the greatest single harm of relying on the feds for so much money comes in the form of policies (like the Gross Receipts Tax) which remain in place as a means of bringing in federal dollars while killing other businesses.
What’s it mean? The Legislature and other policymakers spend a lot of time and energy pursuing federal dollars. That’s unwise. Instead of worrying about how much money is coming to New Mexico from Washington, they should worry about the impact on businesses and economic growth.