We live in a post-welfare reform world.
In the 1990s, President Bill Clinton and House Speaker Newt Gingrich worked together to reform welfare in the United States. A large part of the bargain struck by these two figures on opposite sides of the political aisle was to devolve the system of care for the poor and the national safety net to the states. Decisions on parameters around work requirements, time limits, and other elements of cash assistance that began under the Johnson Administration were devolved to the states, creating a patchwork of safety nets across the country rather than the “Great Society” envisioned during the War on Poverty waged thirty years prior.
As we look back on that era thirty years hence, we see a safety net has developed that is based on state policy.
So how much are states providing in social welfare for their vulnerable residents?
To answer this question, I referred to the Survey of State and Local Government Finances, a survey of state and local governments conducted by the United States Census Bureau. This survey asks a series of questions about revenues and expenditures by state and local government entities across the country and is the best centralized source of information on spending at the state and local level in the United States.
One question the Survey of State and Local Government Finances poses is around public welfare expenditures. The surveyors ask state and local governments how much they spend on support and assistance to “needy persons.” They ask for operating expenses and capital outlay for nursing homes, veterans' homes, homes for the elderly, and “indigent care institutions” as well as cash assistance, housing assistance, medical care at private facilities, and other elements of public welfare like administration, foster care, and community action programs. The most recent survey was released in July of 2025, which was for data collected in 2023.
The American Community Survey makes annual estimates of state population, which allows us to estimate the per-capita state and local public welfare spending by state. We use American Community Survey one-year 2023 data so our spending year matches with our population year.
So, without further ado, this is the per-capita spending for U.S. states on public welfare in 2023.
You can see some trends here. The top states are not particularly surprising: California, New York, and Massachusetts are widely known as high-tax states and a good portion of those taxes are spent on supporting needy residents. Oregon, Vermont, and Minnesota are other states in the top 10 that also fit that profile, with Minnesota being notably the only Midwest state in the top 10 for per-capita public welfare spending.
New Mexico and Kentucky are a little bit different from these other states. These are both relatively low-population states that have high poverty rates. Much of public welfare spending is ultimately financed by the federal government through programs like Medicaid, so states like this are likely spending a lot of money as a pass-through because of their high-poverty population.
Other anomalies in the top 10 are Alaska and Maine. Alaska tends to benefit from a lot of federal programs due to its small population and unique strategic importance. Alaska is also one of the states with the most federal employment, which means more federal workers could be benefiting from public programs. Maine is a relatively low-poverty state so you could lump it in with the high-tax states listed above, but it has had more mixed governance in the past that makes it a little different from the six solid blue states.
The bottom ten states are a different story altogether. All ten have had Republican governments for decades with one exception. More restrictive social welfare policy and lower tax rates have likely put these states at the bottom of the list. Many of these states also have lower cost of living than the national average, which could help contribute to less need for public welfare.
The one exception is an interesting one, though: solid blue Connecticut. Connecticut may be benefiting from a low poverty rate and less of an appetite for taxes from people who commute into the New York City metropolitan area for work.
As long as states are in the driver’s seat for safety net policy in the United States, state tax policy and state willingness to use federal funds to support their needy residents will determine the level of support the states will provide. I will be interested to see what this chart looks like in another 30 years.