Texas is the second largest state, but the largest in the land when it came to defense spending for Fiscal Year 2023 (FY23), according to a recently released Department of Defense (DoD) report. It moved into the top spot thanks to an $8.9 billion increase from Fiscal Year 2022 (FY22).
The Defense Spending by State for 2023 study – conducted between March and September 2024 – looked at prime and sub-award contract data, grant prime and sub-grant awards, and defense personnel and payroll figures.
The Lone Star State topped the list of 10 states – with $71.6 billion, followed by Virginia at $68.5 billion, California at $60.8 billion, Florida at $32.3 billion, and Maryland rounding out the top five at $27.8 billion. The remaining top 10 included: Connecticut $25.3 billion, Pennsylvania $21.8 billion, Arizona $17.0 billion, Massachusetts $16.8 billion, and Washington $15.5 billion.
Total defense spending for all 50 states and the District of Columbia was $609.2 billion, and nearly 59% of that spending went to those top 10 states – or $357.2 billion.
“This report is an enabler for the Department’s state and local partners to better understand and develop civilian innovation and modernization initiatives for the continued responsiveness of the defense industrial base and supply chains to our national security needs while also ensuring local infrastructure and services can sustain our local installations and the communities that host them and our military families,” said Patrick O’Brien, director of the Office of Local Defense Community Cooperation.
While Texas, Virginia, and California were the top three recipients for overall defense spending in FY23, Virginia, Hawaii, and Connecticut ranked as the three highest when considering defense spending impacts on their respective state Gross Domestic Products (GDPs).
The DoD’s budget authority also increased from $795.7 billion in FY 2022 to $874.3 billion in FY 2023, and this included all DoD contract obligations, grant obligations, and payroll spending. The Pentagon reported that most contract funds went to supplies and equipment – including aircraft, ships, weapons, and parts (51%) – and services (36%), with research and development (10%), and construction (3%) comprising the remainder. The report also stated that the “largest portion of personnel pay was for active duty military (46%), followed by civilians (41%), the National Guard (8%), and the Reserves (5%).”
The Pentagon’s fiscal year runs from October 1 to September 30 of the following calendar year.
Top Defense Firms By Defense Spending
The Pentagon also announced the top 10 recipients of defense contracts for FY23, with Lockheed Martin topping the list at $61.4 billion, followed by RTX Corporation at $24.1 billion, General Dynamics at $22.9 billion, Boeing at $20.1 billion, and Northrop Grumman at $16.3 billion. Huntington Ingalls $10.5 billion, Humana $7.8 billion, L3Harris Technologies $7.5 billion, BAE Systems $7 billion, and Cencora $4.4 billion rounded out the top ten.
Nine of those companies had been on the FY22 list, with Cencora (formerly known as AmerisourceBergen) breaking into the top 10. RTX Corporation was also previously Raytheon Technologies.
“Our National Defense Industrial Strategy makes clear that a robust and resilient industrial base provides the enduring foundation for military advantage,” said Dr. William LaPlante, undersecretary of defense for acquisition and sustainment. “Businesses small and large across America are the heart of our industrial might, and this report is a tremendous resource that our state and local partners can use to better understand defense spending in their areas and strengthen supply chains.”
