How much money does the federal government provide Indiana state and local government?
Data updated October 10, 2024
About $23.0B in fiscal year (FY) 2021. This total includes money transferred to Indiana’s state government as well as funds sent directly to local entities within the state, such as cities and school districts. Federal funding helps state and local governments pay for things like infrastructure, education, and health care for low-income people.
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In FY 2021,
$23.0B
was the amount Indiana governments received from the federal government
In FY 2021,
25.7%
of Indiana governments’ revenue came from federal transfers
Federal transfers to state and local governments may be awarded through a competitive application process, or given based on formulas that consider things like the size of a population, number of highway miles, or income of an area. Sometimes the money goes directly to local governments. Other times, the federal government gives “pass-through” grants to states, which then decide how to distribute the funds to local governments within their state.
Federal transfers to Indiana governments increased 11.9% in FY 2021.
Federal transfers to Indiana's state and local governments, FY 2021 dollars
In FY 2021, Indiana received a total of $23.0B from federal transfers, up 11.9% from the year before. Money sent to Indiana governments made up 2.1% of all federal government transfers to states that year.
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Federal transfers to state and local governments can vary for many reasons, including the characteristics of the population (e.g., age and income levels), the strength of the local economy, and policy choices made by the recipient governments. This means funding varies across states, so one useful way to measure state reliance on federal money is to look at the share of total revenues coming from the federal government.
More of Indiana's revenues came from federal transfers than the average state in FY 2021.
Share of state and local government revenues from federal transfers
In FY 2021, 25.7% of Indiana government revenues came from federal transfers. This was 6.1 percentage points higher than the average across all states.
Federal transfers finance a broad range of programs and services, including education, nutritional assistance programs, infrastructure, and Medicaid. Because every state has different populations and needs, the purpose of federal transfers also differs.
Public welfare support made up 65% of transfers to Indiana governments in FY 2021.
Share of state and local government revenues from federal transfers, FY 2021
In FY 2021, 65% of transfers Indiana governments received from the federal government were for the purpose of supporting public welfare. Public welfare includes cash assistance to individuals through programs like Temporary Assistance for Needy Families (TANF) and Medicaid payments to health care providers. Funding for health and hospitals was the next largest category of federal transfers Indiana governments received at 14%.
