SALT LAKE CITY — States and the federal government share a vital fiscal relationship. This data summary, the third in a series on state and federal economic linkages from the Kem C. Gardner Policy Institute, presents data on federal funds in Utah’s state budget.
“Federal funds comprise a significant portion of Utah’s state budget,” said Phil Dean, chief economist at the Gardner Institute. “These funds vary over the business cycle, generally increasing during economic downturns as spending on cyclical programs like Medicaid and SNAP (food stamps) increases, then decreasing as economic conditions strengthen.”
Key findings from the summary include the following:
Size and Composition - In FY 2024, federal funds comprised 27% of the state’s spending, totaling just over $7 billion of the $26 billion total. Since FY 2006, the federal fund share of the state budget averaged nearly 28%. Almost three-fourths of these funds support various social services, housing, and community development programs, including Medicaid at 50% of the state-federal spending.
Ranking Among States - Utah’s state budget remains less reliant on federal funds than most states, ranking 39th in share of federal funds in the state budget in FY 2024 and 38th in a ten-year average from FY 2015 to FY 2024. State agencies annually submit plans for what they will do in the event federal funding drops.
Spending Per Capita - In an inflation-adjusted average over the past decade (from FY 2015 to FY 2024), Utah spent approximately $1,844 in federal funds per capita, ranking 48th in the U.S. In FY 2024, Utah ranked 41st, spending $2,393 per capita.
Additional Funds – In the last 20 years, the federal government significantly increased transfers to states during two periods: the Great Recession, during which the federal government passed the American Recovery and Reinvestment Act, which resulted in approximately $2.7 billion in additional federal funds appropriations in Utah; and the COVID-19 pandemic, during which the federal government, through various COVID relief bills and programs, sent an additional $6.9 billion to Utah’s state coffers.