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It's the latter. From the article:

"Other states are high or low for various reasons: the outliers Maryland and Virginia, for example, both have dramatically higher Federal spending per capita than the average state, as they are near the physical headquarters for most of the Federal government and have significantly disproportionate Federal spending for procurement and Federal wages."

So, while Virginia is a relatively high-income state and contributes a lot of Federal income tax, they also have a lot of Federal employees, grants, contracts, etc.

(I was surprised at first too)




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