The organizational structure of state and local government varies heavily across the country. Public education, law enforcement, emergency services, public hospitals, and road maintenance are all largely funded by state tax dollars, and some state and local governments have much greater economic output than others.
The gross domestic product per capita of state and local government ranges from $3,870 in Indiana to $8,563 in Alaska. There are several major factors that account for the differences in government size among states. The income of residents, personal income and corporate taxes, and population density are some of the biggest factors that correlate with state and local government GDP. Additionally, states with the highest government GDP per capita often have major mining industries that generate government revenue through royalties and corporate taxes.
To determine the states with the biggest (and smallest) governments, 24/7 Wall St. ranked states based on GDP per capita of state and local governments in 2016, with data from the Bureau of Economic Analysis.