Monday, January 12, 2026

Federal Grants to States 1-12-26

While exact final figures for Fiscal Year (FY) 2025 aren't fully settled in early 2026, the federal government redistributed roughly $1.1 trillion to states and localities in 2024, covering essential services like Medicaid, education, and transportation, with similar levels expected for 2025, funded by federal revenue from sources like income and payroll taxes. Specific breakdowns for 2025 will appear as Treasury data updates, showing federal spending categories that flow back to states and individuals. 

Key Takeaways & Data (from ~2024/2025 context):

Total Redistribution (2024): Around $1.1 trillion went from the federal government to state and local governments.

Major Funding Areas: This money supports vital programs such as:

Medicaid & CHIP (Children's Health Insurance Program)

Food assistance (SNAP/Food Stamps)

Transportation projects (roads, bridges)

Education

Social Security & Veterans' benefits

Federal Revenue: This money comes from federal taxes (income, payroll, business) collected across all states, with California, for example, contributing a significant portion of individual taxes.

Where to Find Official Data: U.S. Treasury Fiscal Data and federal spending page provide official breakdowns as they become available. 

In essence, while states send taxes to the federal government, the federal government then sends large sums back to the states to fund shared responsibilities. 

In fiscal year (FY) 2025, the total amount of federal aid (grants) provided to state and local governments was an estimated $1.1 trillion. This figure covers a wide range of programs and services, with the majority directed toward healthcare programs like Medicaid. 

Overview of Federal Aid

Federal aid is a key component of state and local government funding, helping to finance services such as education, health care, and transportation. The estimated $1.1 trillion for FY 2025 represents about 3.7% of the U.S. Gross Domestic Product (GDP). 

Key Program Allocations

In 2025, a significant portion of federal grants was allocated to specific major programs: 

Medicaid: Over $615 billion

Child Nutrition programs: $32 billion

Children's Health Insurance Program: $18 billion

Temporary Assistance for Needy Families (TANF): $16 billion 

Detailed state-by-state data for all programs in 2025 is available through the USAspending website. 

https://www.google.com/search?q=how+much+in+federal+taxes+were+sent+to+the+states+in+2025

Comments

I expect reductions in federal funding to States as Fraud and Abuse are uncovered. I expect removing 501C status will reduce Fraud and Abuse.

Norb Leahy, Dunwoody GA Tea Party Leader

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