Federal Grants Fail to Consider Population Shift

The federal government annually awards hundreds of billions of dollars in grants to states. In this report, I examine funding for the largest federal grant programs for 2020–22, focusing on grants-in-aid that do not fully adjust for population change. For states losing population, I calculate “avoided reductions,” the difference between the grants a state received in 2022 and what it would have received had grant funding been reduced proportionate to population loss. I find that the sums of avoided reductions differ greatly among states, with California, Illinois, and New York spared the most.