Federal Spending

The largest primary economic industry in Alaska is the federal government. While not a business, spending by the federal government brings more money into Alaska than any other industry. In 2010, the federal government spent nearly $18,000 per person in Alaska. This made Alaska the No. 1 state in per capita federal spending, 70% above the national average. There are several reasons for the large federal spending in Alaska: 

• Large federal ownership of Alaska's lands. The federal government owns 60% of Alaska's land.

• A large military presence. Alaska's highly strategic location makes it very important to the U.S. military. In 2022, Alaska received $4 billion in defense spending, 6% of the state's GDP.

• Building basic infrastructure in much of Alaska. Alaska's infrastructure is very undeveloped compared to the lower 48. The federal government has a long history of spending to modernize the state's transportation and communication infrastructure.

• Support of the Alaskan Native population. Close to 20% of Alaska's population is Alaskan Native. Alaskan Natives are eligible for special health care and other programs. 

• Alaska also receives money from the federal government for Social Security payments, Medicare and Medicaid, federal retirement benefits and pensions, and grants to local governments and non-profits.

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