In fiscal 1994, Texans received 97 cents back for every tax dollar paid to the federal government. Texas and California tied to rank 33rd among states in return on federal taxes paid. Yet Texas' need for federal support is among the nation's highest. A recent State Policy Reports study compared actual state rankings for federal spending against a hypothetical ranking based on the amounts needed to match national patterns in categories such as per-pupil spending. Texas ranked fourth behind Mississippi, Louisiana, and New Mexico in terms of need.
Many factors affect the amount of federal dollars each state receives.
Some cannot be changed, such as the location of federal offices or installations. Natural catastrophes like the 1995 Midwest flood also have an impact, as do the amount of federal lands within a state. For Texas, the major factor in its declining ranking seems to be its rapidly growing population. Many federal funding formulas use population figures from the 1990 Census, rather than more recent population estimates, to determine states' share of federal funds. States with declining populations, such as those in the Northeast, fight changes to these formulas because they would reduce their share of federal funds.