The Trump presidency generated concern about democratic backsliding and renewed interest in measuring the national democratic performance of the United States. However, the U.S. has a decentralized form of federalism that administers democratic institutions at the state level. Using 51 indicators of democratic performance from 2000 to 2018, we develop a measure of subnational democratic performance, the State Democracy Index. We use this measure to test theories of democratic expansion and backsliding based in party competition, polarization, demographic change, and the group interests of national party coalitions. Difference-in-differences results suggest a minimal role for all factors except Republican control of state government, which dramatically reduces states’ democratic performance during this period. This result calls into question theories focused on changes within states. The racial, geographic, and economic incentives of groups in national party coalitions may instead determine the health of democracy in the states.