Michigan Government Ranks Top Ten for Federal Money Dependency

As Michigan’s tax revenues have fallen, the state has taken on more federal dollars to fill in the gaps, according to a study done by the Mercatus Center.

Michigan was No. 9 in the nation in 2009 in terms of federal funds as a share of total spending, according to Matthew Mitchell, a research fellow at the Mercatus Center. Michigan is projected to move up to No. 8 in 2010 based on estimates, Mitchell said.

Michigan’s total budget was $45.7 billion in 2009, of which $16.5 billion came from the federal government, or about 36 percent. By comparison, in 1996 federal funding accounted for $6.2 billion, or 22.6 percent of the $27.4 billion total budget.

State generated revenue has remained generally flat the past six years, going from $29.5 billion in 2003 to $29.0 billion in 2009. During that same time, federal dollars have increased from $9.5 billion to $16.5 billion.

Mitchell said Medicaid and the federal stimulus program both were reasons for a big jump in federal spending.

“For most states, Medicaid is the fastest growing component of spending,” he said.