In this article, we look at the 20 states where the US military spends the most money. You can skip our detailed analysis on the breakdown of the Department of Defense (DoD)’s spending by state and head over directly to the Top 5 States Where the US Military Spends the Most Money.
Figures released by the Stockholm International Peace Research Institute (SIPRI) last month revealed that global military spending reached an all-time high of $2.44 trillion in 2023, increasing 6.8% in real terms compared to 2022. This is the steepest year-on-year rise in defense expenditure since 2009. The report also highlighted that world military expenditure has now been increasing for the last consecutive nine years.
Defense spending in the United States grew 2.3% to total $916 billion in 2023, which amounted to 37.5% of the global military expenditure, and represented 68% of all NATO military spending. On the other hand, Russia’s defense bills also witnessed a 24% increase in 2023 amid the war in Ukraine. Israel’s military expenditure rose 24% as well compared to 2022, driven by its large-scale offensive against Hamas in Gaza. India and Saudi Arabia also continued to spend heavily on defense during the year.
The surge in spending has a created a boom in the global defense industry, especially for aerospace and armaments manufacturers in the United States – a country that accounts for nearly two-fifths of all global military spending, and is home to several top defense contractors countries across the world looks toward to procure their military supplies from.
Lockheed Martin Corporation (NYSE:LMT) generated $67.6 billion in revenues in 2023, reporting an increase of 2.4% in comparison to 2022. The aerospace company’s net earnings were also $1.2 billion higher compared to last year. RTX Corporation (NYSE:RTX)’s numbers soared as well, with sales reaching a whopping $68.9 billion in 2023, having grown 3% year-on-year. On the other hand, General Dynamics Corporation (NYSE:GD) posted its highest revenue in history, totaling $42.3 billion last year – which was 7.3% higher than in 2022.
As a result, the United States continues to retain its military superiority over its rivals, and given the advanced research and development ongoing in the country’s defense industry, this trend is likely to stay for the foreseeable future. The country is already looking ahead to the future, and working on building weapons tailored to address the rapidly evolving dynamics of modern warfare.
An example of that is the Next Generation Air Dominance (NGAD) Program launched by the United States Air Force (USAF) in 2014 to develop the sixth-generation fighter jet to replace Lockheed Martin Corporation (NYSE:LMT)’s F-22 Raptor. The USAF requested $1.7 billion in its FY24 budget for the project which is likely to cost $16 billion between 2023 and 2028. Five companies – Lockheed Martin Corporation (NYSE:LMT), Northrop Grumman Corporation (NYSE:NOC), The Boeing Company (NYSE:BA), General Electric Company (NYSE:GE), and Pratt & Whitney, a subsidiary of RTX Corporation (NYSE:RTX) – are working on the NGAD Program, with each being awarded contracts worth $975 million in 2022 for a period of ten years.
The enormous sums of money that go into the American defense industry for the procurement of new military equipment by the US government and foreign buyers, and the research and development to develop improved weaponry, heavily influences the US economy in many ways. However, the spending is not evenly distributed across all states. Understandably so, states that are home to major defense companies and host a larger number of military installations receive a greater share of this money.
The Department of Defense (DoD) in September 2023 released a report on its contract obligations and spending across various states of the United States in 2022. Of the $558.7 billion spent that year, 70% went into contracts for products and services, while 28% were used to pay salaries of DoD’s personnel. 2% of the total amount was awarded as grants. Let’s now take a look at top states where the US military spends the most money.
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Methodology
The top 20 states where the US military spends the most money are ranked in ascending order of the DoD spending by state in billions of dollars. 2022 is the latest year for which data is available, and was released by the Department of Defense in September 2023. In cases where the estimated, rounded figure of defense spending was similar for two or more states, we outranked one over the other on the basis of defense spending per resident, with the state having the greater value ranking higher in the list.
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Top 20 States Where the US Military Spends the Most Money:
20. Ohio
Total Defense Spending in State: $8.9 billion
Share of Overall DoD Spending: 1.59%
We begin our list with Ohio, where $5.1 billion of the total $8.9 billion amount was spent on DoD contracts in the state, with the rest being divided between grants and payroll spending. The DoD defense spending per resident in Ohio is $759.
19. Missouri
Total Defense Spending in State: $8.9 billion
Share of Overall DoD Spending: 1.59%
Next up is Missouri, which is home to 12 military installations, according to the Department of Defense. The DoD spent $8.9 billion on military expenditure in the state in 2022.
18. New Jersey
Total Defense Spending in State: $9.4 billion
Share of Overall DoD Spending: 1.68%
In 2022, the DoD spent $7 billion on contracts, $2 billion on payrolls, and a little over $400 million on grants in New Jersey. It is among states where the US military spends the most money.
17. Illinois
Total Defense Spending in State: $10.2 billion
Share of Overall DoD Spending: 1.83%
More than $10 billion was spent on defense in the state of Illinois in 2022. Nearly three-fourths of the amount was spent on DoD contracts. Defense spending per resident in Illinois is $811.
16. Colorado
Total Defense Spending in State: $12.9 billion
Share of Overall DoD Spending: 2.31%
Colorado has a high defense spending per resident of $2,215. The DoD spent $8.8 billion on defense contracts in the state in 2022, while $3.9 billion were incurred on payrolls, with the rest being accounted for by grants.
15. Georgia
Total Defense Spending in State: $13.4 billion
Share of Overall DoD Spending: 2.40%
Georgia represented 2.4% of the DoD’s overall defense spending in 2022. The state is home to Lockheed Martin Corporation (NYSE:LMT)’s site in Marietta that works on the engine modernization and avionics programs for the P-3 Orion program operations and C-5 Galaxy strategic transport.
14. North Carolina
Total Defense Spending in State: $13.4 billion
Share of Overall DoD Spending: 2.40%
North Carolina is home to 15 military installations, including seven key military bases. The state also has numerous universities that have industrial partnerships with the DoD and intelligence agencies. With more than $13 billion spent on defense in the state in 2022, North Carolina is among the top 20 states where the US military spends the most money.
13. Kentucky
Total Defense Spending in State: $13.9 billion
Share of Overall DoD Spending: 2.49%
Next on our list of states where the US military spends the most money is Kentucky, where the DoD incurred a whopping $13.9 billion in defense expenditure in 2022, of which $10.6 billion comprised contract spending. The military spending per resident in the state is $3,084.
12. Alabama
Total Defense Spending in State: $14 billion
Share of Overall DoD Spending: 2.51%
There are ten military installations in the state of Alabama, according to the DoD. In 2022, $14 billion were spent by the US military in the state of which $10.3 billion went into DoD contracts, while $3.5 billion was expensed on payroll.
11. Washington
Total Defense Spending in State: $14.6 billion
Share of Overall DoD Spending: 2.61%
Next up is Washington, where the military spending per resident in 2022 was $1,874, with $14.6 billion spent across the state in defense expenditure during the year. About 51% of the amount was expensed on payrolls.
10. Arizona
Total Defense Spending in State: $15 billion
Share of Overall DoD Spending: 2.68%
According to the DoD, 2.68% of their entire defense expenditure in 2022 was incurred in Arizona. The state is home to around 18 key military installations, and also hosts regional offices of several defense manufacturers, including RTX Corporation (NYSE:RTX) which employs over 12,000 workers in the city of Tucson.
9. Massachusetts
Total Defense Spending in State: $15.2 billion
Share of Overall DoD Spending: 2.72%
Massachusetts is in ninth spot, with $15.2 billion spent on defense in the state during 2022, which represented 2.72% of DoD’s overall spending. There are 10 key military installations across the state.
8. Pennsylvania
Total Defense Spending in State: $17.9 billion
Share of Overall DoD Spending: 3.20%
There are 16 military installations in the state of Pennsylvania. The DoD in 2022 spent close to $18 billion in the state, of which $14.3 billion were accounted for contractual spending.
7. Connecticut
Total Defense Spending in State: $22.3 billion
Share of Overall DoD Spending: 3.99%
With $22.3 billion spent on defense in 2022, Connecticut is seventh on our list. The state hosts the General Dynamics Electric Boat (GDEB), a subsidiary of the General Dynamics Corporation (NYSE:GD) that has been the primary manufacturer of submarines for the US Navy for over a century.
6. Maryland
Total Defense Spending in State: $26.4 billion
Share of Overall DoD Spending: 4.73%
The state of Maryland is in sixth spot, with over $26 billion expensed on defense during 2022, with two-thirds of the amount being represented by the DoD contracts. An estimated $626 million went into grants, while $8.4 billion were incurred on payrolls.
Click to continue reading and see the Top 5 States Where the US Military Spends the Most Money.
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Disclosure: None. Top 20 States Where the US Military Spends the Most Money is originally published on Insider Monkey.
