Determining which U.S. state has the most money is not straightforward. There are various ways to measure and compare the economic resources of states. In this article, we will look at key economic indicators like gross domestic product (GDP), median household income, state budget surplus/deficit, and more to provide an overview of which states have the strongest and weakest economies.
Gross Domestic Product by State
One common metric used to compare state economies is gross domestic product (GDP). GDP measures the market value of all final goods and services produced within a state in a given period of time. Essentially, it measures a state’s economic output.
According to 2021 GDP data from the Bureau of Economic Analysis, California has the largest state economy in terms of GDP. Here are the top 10 states by GDP:
| State | 2021 GDP (billions) |
|---|---|
| California | $3,690 |
| Texas | $2,060 |
| New York | $1,880 |
| Florida | $1,180 |
| Illinois | $960 |
| Pennsylvania | $860 |
| Ohio | $726 |
| New Jersey | $682 |
| Georgia | $676 |
| Washington | $660 |
With a GDP of over $3.6 trillion, California’s economy is much larger than any other state. Texas and New York are distant second and third with GDPs around $2 trillion. The next several states have GDPs between $600 billion and $1.2 trillion.
However, it’s important to note that GDP doesn’t account for cost of living differences between states. So while California has the largest total economic output by far, that doesn’t necessarily mean it has the “most money” in real terms for its residents.
Median Household Income by State
A better way to compare the financial resources available to a typical resident in different states is to look at median household income data.
According to 2021 estimates from the U.S. Census Bureau, here are the states with the highest median household incomes:
| State | Median Household Income |
|---|---|
| Maryland | $94,384 |
| New Jersey | $89,296 |
| Hawaii | $88,767 |
| Massachusetts | $87,574 |
| California | $82,271 |
| Washington | $81,238 |
| Alaska | $80,465 |
| Colorado | $79,986 |
| Virginia | $78,961 |
| New Hampshire | $78,333 |
Maryland tops the list with a median household income of over $94,000 annually. New Jersey, Hawaii, Massachusetts and California round out the top five. While California has the largest GDP, it falls to 5th for median household income.
Comparing GDP to median incomes shows that having a large total economy does not always translate into more financial resources for individuals. Wealth is not distributed equally across states.
State Budget Surpluses and Deficits
Another useful indicator is to look at state government budgets. Do states take in more tax revenue than they spend, resulting in budget surpluses? Or do they spend more than they take in, running deficits?
According to 2022 data compiled by Pew Charitable Trusts, the following 10 states had the largest budget surpluses relative to the state’s spending:
| State | Budget Surplus as % of Spending |
|---|---|
| Wyoming | 53% |
| North Dakota | 40% |
| Utah | 39% |
| Idaho | 33% |
| West Virginia | 25% |
| South Dakota | 23% |
| Nebraska | 22% |
| Tennessee | 18% |
| Maine | 17% |
| Oklahoma | 16% |
Wyoming leads the way with an enormous budget surplus equal to 53% of its annual spending. Several midwestern states like North Dakota and Nebraska also have large surpluses.
On the flip side, Illinois had the largest budget deficit at 16% of its annual expenditures. Other states like Kentucky, Massachusetts, New Jersey and Louisiana also operated sizable deficits in 2022.
In general, states with natural resource economies like Wyoming and North Dakota benefited from rising oil and commodity prices in 2022. Meanwhile, states that rely more on income and sales taxes faced budget shortfalls due to inflation and volatile stock markets impacting capital gains revenue.
Tax Collections Per Capita
We can also look at total state tax collections adjusted for population size. This measures the average tax revenue each state collects from its residents.
The states with the highest tax collections per capita in 2021 were:
| State | Tax Collections Per Capita |
|---|---|
| North Dakota | $9,745 |
| Alaska | $8,590 |
| Wyoming | $7,640 |
| New York | $7,132 |
| Minnesota | $6,337 |
| Massachusetts | $6,330 |
| California | $6,290 |
| Hawaii | $6,116 |
| Delaware | $6,074 |
| Illinois | $5,965 |
North Dakota collected over $9,700 per resident in taxes, the highest of any state. Alaska, Wyoming, New York and Minnesota round out the top 5. This indicates these states have strong tax bases and the ability to collect substantial revenue from residents and businesses if needed.
Key Takeaways
Looking across these economic indicators paints a nuanced picture of state financial resources:
- California has the largest state GDP by far, but a relatively average median income and tax collections per capita.
- Small states like Wyoming, North Dakota and Alaska fare very well across budget surplus, tax collections and income metrics thanks to natural resource wealth.
- Northeast states like New York, Massachusetts and Maryland boast very high incomes and tax collections, but weaker budget situations currently.
- Midwestern states tend to have average incomes and tax bases, but some are running large budget surpluses (South Dakota, Nebraska).
While no state is a clear standout across the board, a few small states seem to have the “most money” relative to their populations based on income, tax collections and budget strength. California has an enormous economic engine but high costs and stark income inequality. Other states show strengths and weaknesses across different financial indicators.
Conclusion
Determining which U.S. state has the “most money” depends heavily on which economic indicators you look at. GDP favors California, median income points to Maryland or New Jersey, budget surpluses show Wyoming and North Dakota booming, and per capita tax collections highlight North Dakota and Alaska.
No single state stands out as strongest across the board. The economies of U.S. states have different structures and strengths. Location, natural resources, tax policies, costs of living and demographics all influence the financial status of state residents and governments. Comparing multiple metrics allows us to analyze the complex question of which state economies are currently faring best and have the most resources available relative to their populations.