(The Center Square) – The Bluegrass State needs a lot of outside help to prosper. That’s the key finding of a study released recently ranking states on their self-reliance.
WalletHub ranked Kentucky 49th in its report on the Most and Least Independent States. That was one spot lower than the state placed in the personal finance site’s review last year.
The study measured each state based on 39 statistics that determined scores in five categories. Kentucky ranked in the bottom 10 in four: financial dependency (45th), support from the government (44th), job-market variety and growth (43rd) and international trade dependency (50th).
Kentucky earned the lowest score in foreign trade because 5.7% of the state’s jobs are supported by exported goods, 7.7% of its private-sector jobs are based at foreign-owned companies, and 17.9% of the state’s gross domestic product is contingent on exports. The state ranked 43rd, 50th and 48th, respectively, in those metrics.
While WalletHub calls that reliance, others may see the amount of foreign investment and spending in the state as a positive. In April, Gov. Andy Beshear led a delegation from the state to visit Germany and Switzerland. That trip included stops at companies already with operations in the state and to other businesses considering future developments to consider Kentucky for those projects.
“As we continue to build on our record economic momentum of the past few years, it is critical that we continue to nurture partnerships with our existing employers and also develop new relationships with successful companies around the globe,” Beshear said in a statement prior to the trip.
Beshear has also touted record job growth in the state during his tenure in office. However, the data WalletHub found indicated Kentucky had the third-worst job growth rate nationally. The state’s unemployment rate of 4.8% was also the 10th-worst in the U.S.
Kentucky also ranked among the bottom 10 nationally in poverty rate (16.1%, 45th), the percentage of low-income households with no adults employed (27.1%, 46th) and the share of mortgages determined to be seriously underwater (6.3%, 47th). In addition, 21.1% of Kentuckians spend more than they earn. That’s the seventh-worst percentage in the country.
While the state ranked 24th in the percentage of households getting public assistance and SNAP benefits, it still ranked as the third-most dependent state on the federal government, according to WalletHub.
A recent report by MoneyGeek found that Kentucky receives $1.68 for each $1 it sends to Washington, the seventh-highest return rate in the country. With 30.1% of the state’s revenues originating from the federal government, Kentucky had the fourth highest rate.
Dewey Clayton, a political science professor at the University of Louisville, said that it’s appropriate for the federal government to give some states a disproportionate share.
“This allows the federal government to assist states in providing poorer states with the necessary funding for goods and services for their citizens,” he explained. “So, I think it is fair, given that the national government has the responsibility of ensuring the well-being of all its citizens, irrespective of their income.”
Somewhat surprisingly, Kentucky’s best ranking came in vice dependency. The state known for horse racing and bourbon placed 29th nationally.
According to the WalletHub report, only Louisiana was a more dependent state overall than Kentucky. Utah was the most independent state, followed by Colorado, Florida, Wisconsin and Vermont.
Of Kentucky’s neighboring states, Virginia was the least dependent, finishing seventh in the study. No other neighboring state finished in the top half, as Ohio came in 32nd, Illinois 38th, Tennessee 40th, Indiana 43rdand West Virginia 46th.
