Introduction
Donor states are the states that pay more money to the federal government in taxes by residents than what they receive for funding; this amount is called the balance of payments. In other words, donor states are states where the balance of payments is negative. The higher the negative number, the more the state paid compared to what it received.
States can attain donor status by either shrinking the portion of their budget that depends on federal aid or increasing the state’s economic output. Because of this dichotomy, states, where larger portions of their budget rely on federal aid, are less likely to be donor states. For this reason, states are best equipped to change their donor status by relying more heavily on federal funds for their programs rather than money raised through direct taxation.
Learn for yourself how states differ in the balance of payments and which are considered donor states by checking the data in the charts.
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