How much federal money goes toward state and local government?

Updated May. 12, 2026Refreshed annually
The federal government provided $21.3 billion to Kentucky in fiscal year (FY) 2023. This total includes money transferred to Kentucky'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.
In FY 2023

$21.3B

was the amount Kentucky governments received from the federal government
In FY 2023

34.9%

of Kentucky 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 Kentucky governments decreased 8.3% in FY 2023.

Federal transfers to Kentucky's state and local governments, FY 2023 dollars

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In FY 2023, Kentucky received a total of $21.3 billion from federal transfers, down 8.3% from the year before. Money sent to Kentucky governments made up 1.7% of all federal government transfers to states that year.

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What percent of Kentucky's revenue comes from the federal government? How does this compare to other states?

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 Kentucky's revenues came from federal transfers than the average state in FY 2023.

Share of state and local government revenues from federal transfers, FY 2017–FY 2023

In FY 2023, 34.9% of Kentucky government revenues came from federal transfers. This was 9.0 percentage points higher than the average across all states.

What are federal dollars transferred to Kentucky spent on?

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 69% of transfers to Kentucky governments in FY 2023.

Share of state and local government revenues from federal transfers, FY 2023

In FY 2023, 69.4% of transfers Kentucky 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 education was the next largest category of federal transfers Kentucky governments received at 11.9%.

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Methodology

USAFacts standardizes data, in areas such as time and demographics, to make it easier to understand and compare.

The analysis was generated with the help of AI and reviewed by USAFacts for accuracy.

Page sources

USAFacts endeavors to share the most up-to-date information available. We sourced the data on this page directly from government agencies; however, the intervals at which agencies publish updated data vary.