Key takeaways
- California's Department of Health Care Services is the largest state agency, with a $226.3 billion budget for 2026-27.
- Twelve of the 16 agencies on the list run Medicaid or broader health and human services programs.
- Texas has three agencies on the list: health and human services, education and transportation.
- Because federal money flows through state agencies, all-funds budgets are often several times larger than the state's own general fund share.
State governments spend more than $3 trillion a year in all funds, and a handful of agencies control a large share of it. This list ranks the biggest single state agencies by their annual budget for fiscal 2027.
The largest US state agencies by budget
Ranked by annual all-funds budget, including federal money, for fiscal 2027 (the 2026-27 budget year). For states with two-year budgets, the figure is about half the biennial total. Each row shows the budget stage and basis.
| # | Agency | Annual budget | State | Notes |
|---|---|---|---|---|
| 1 | California Department of Health Care ServicesMedi-Cal and behavioral health | $226.3BEnacted 2026-27, all funds | CA | The largest state agency in the country; $45.7 billion of the total is state General Fund. |
| 2 | New York State Department of HealthMedicaid and public health | $111.9BProposed FY2027, all funds | NY | Medicaid spending from all sources across state agencies is about $124 billion. |
| 3 | Pennsylvania Department of Human ServicesMedical Assistance, long-term care and human services | $67.2BProposed 2026-27, all funds | PA | $21.9 billion of the total is state General Fund. |
| 4 | Ohio Department of MedicaidMedicaid | About $48BFY2027, Medicaid all funds | OH | Ohio passes a two-year budget; the figure covers Medicaid spending across state agencies, most of it through the department. |
| 5 | Illinois Department of Healthcare and Family ServicesMedicaid and child support | More than $47BFY2027 appropriation | IL | Appropriation authority; the department spent $39.0 billion in FY2025. |
| 6 | Texas Health and Human Services CommissionMedicaid, CHIP, benefits and state hospitals | About $47BPer year; $94.0B for 2026-27 biennium | TX | The largest agency in Texas's Article II health and human services budget, which totals $107.6 billion for the biennium. |
| 7 | Texas Education AgencyK-12 school funding | About $44BPer year; $88.8B for 2026-27 biennium (recommended) | TX | Most of the budget is Foundation School Program aid to school districts and charter schools. |
| 8 | North Carolina DHHS, Division of Health BenefitsNC Medicaid | $41.6B2026-27 revised, total requirements | NC | The Medicaid division alone; the rest of the Department of Health and Human Services adds several billion more. |
| 9 | Michigan Department of Health and Human ServicesMedicaid, public health and human services | About $40.5BFY2027, all funds | MI | By far the state's largest agency; the Department of Transportation is next, at about $8.4 billion. Published totals vary by source. |
| 10 | Florida Agency for Health Care AdministrationMedicaid and health facility licensing | $38.0BEnacted 2026-27, all funds | FL | Medicaid accounts for $36.5 billion of the total. |
| 11 | Arizona Health Care Cost Containment SystemAHCCCS, Arizona's Medicaid program | $23.3BApproved FY2027, all sources | AZ | About $2.9 billion is state General Fund; the agency is larger than Arizona's entire $18.3 billion general fund budget. |
| 12 | MassHealthExecutive Office of Health and Human Services | About $22.7BFY2027, gross | MA | The single largest area of spending in the $63.4 billion state budget; about $9.3 billion net of federal reimbursement in the governor's proposal. |
| 13 | Texas Department of TransportationHighways, aviation, rail and ports | About $20BPer year; $39.9B for 2026-27 biennium | TX | The largest state transportation budget in the country. |
| 14 | Washington State Health Care AuthorityApple Health, PEBB and SEBB | About $19.3BPer year; $38.7B for 2025-27 biennium (maintenance level) | WA | Runs Medicaid and health benefits for public and school employees; about $8.9 billion of the biennial total is state general fund. |
| 15 | California Department of TransportationCaltrans | $16.6B2026-27 | CA | Funded mostly by fuel taxes, vehicle fees and federal highway money. |
| 16 | Florida Department of TransportationState Transportation Work Program | $14.4B2026-27 work program | FL | The department's five-year tentative work program totals $62.2 billion. |
Sources: state budget offices and enacted appropriations acts; agency budget documents and legislative testimony; California Legislative Analyst's Office; Texas Legislative Budget Board; Arizona Joint Legislative Budget Committee; Washington Office of Financial Management; Massachusetts Taxpayers Foundation; Florida Legislature's Fiscal Analysis in Brief. Some states, including New Jersey and Georgia, publish department budgets in state funds only, so they aren't directly comparable and aren't ranked. Figures are rounded, and close rankings are approximate.
Why Medicaid agencies top the list
Medicaid is the largest single item in most state budgets once federal money is counted. The federal government pays at least half of each state's Medicaid costs, and more for the expansion population, and all of that money is budgeted through the state agency. That is why Medicaid agencies in California, New York and Pennsylvania outspend every other department, and why Arizona's Medicaid agency is larger than the state's entire general fund budget.
Federal changes are a big theme in fiscal 2027 budgets. New Medicaid eligibility and work requirement rules under H.R. 1 are requiring states to fund new systems, eligibility staff and reporting, even as enrollment is expected to fall.
How to read state budget numbers
- All funds versus general fund. All-funds totals include federal money, fees and trust funds. The general fund is the state's own tax money, and it is usually what lawmakers argue about.
- Annual versus biennial. About 20 states, including Texas, Ohio and Washington, pass two-year budgets. Halving the biennial total gives a rough annual figure.
- Proposed versus enacted. Governor's proposals and agency testimony can differ from what the legislature passes. See our governor budget proposals tracker for where each state stands.
- Appropriations versus spending. Appropriations set the maximum an agency may spend; actual spending is often lower.
What the largest state agencies buy
- Health and human services: Medicaid managed care, eligibility and enrollment systems, claims processing, pharmacy benefits, call centers, fraud detection, data analytics and consulting.
- Transportation: highway and bridge construction, engineering and design, maintenance, traffic management technology, fleet and equipment.
- Education: student assessments, data and reporting systems, grants management, school improvement services and professional development.
- Across agencies: cloud and cybersecurity, case management software, IT modernization, staffing and facilities services.
How state agencies buy
Large state purchases usually go through competitive RFPs run by the agency or by a central procurement office, and many goods and services are bought off statewide contracts. Medicaid IT and managed care contracts often need federal approval and run for five years or more. Many agencies also use cooperative contracts; see our cooperative purchasing directory.
- Follow the budget cycle. New money in an enacted budget becomes procurements over the following months.
- Watch contract end dates. Big Medicaid, eligibility and IT contracts are rebid on long cycles, and planning starts years ahead.
- Read agency requests and legislative testimony. They show the systems and services an agency plans to fund.
- Register as a vendor. Each state runs its own supplier portal; see our state procurement portals.
- Reach the right people. Agency CIOs, program directors, Medicaid directors, chief financial officers and procurement officers are the usual buyers.
How KSG helps
Kensington Sales Group's SDRs book meetings with public agencies across Federal, SLED, K-12 & Higher Ed, Healthcare, Tribal, Special Districts and Utilities, including state health, human services, transportation and education agencies. We find the program, IT and procurement leaders at each agency and time outreach to budget cycles and contract renewals. Book a call to talk about your state targets.