Galette v. NJ Transit Corp.

(Slip Opinion) OCTOBER TERM, 2025 1

 Syllabus

 NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
 being done in connection with this case, at the time the opinion is issued.
 The syllabus constitutes no part of the opinion of the Court but has been
 prepared by the Reporter of Decisions for the convenience of the reader.
 See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337 .

SUPREME COURT OF THE UNITED STATES

 Syllabus

 GALETTE v. NEW JERSEY TRANSIT CORPORATION

 CERTIORARI TO THE SUPREME COURT OF PENNSYLVANIA,
 EASTERN DISTRICT

 No. 24–1021. Argued January 14, 2026—Decided March 4, 2026*
In 1979, the New Jersey Legislature created the New Jersey Transit Cor-
 poration (NJ Transit) as a “body corporate and politic with corporate
 succession” and constituted it as an “instrumentality of the State ex-
 ercising public and essential governmental functions” but “independ-
 ent of any supervision or control” by the New Jersey Department of
 Transportation. N. J. Stat. §27:25–4(a). The State gave NJ Transit
 significant authority, including the power to make bylaws, sue and be
 sued, make contracts, acquire property, raise funds, own corporate en-
 tities, adopt regulations, and exercise eminent domain powers.
 §§27:25–5, 27:25–13. NJ Transit’s organic statute provides that “[n]o
 debt or liability of the corporation shall . . . constitute a debt [or] liabil-
 ity of the State,” and that “[a]ll expenses . . . shall be payable from
 funds available to the corporation.” §27:25–17. NJ Transit is governed
 by a board of directors (Board). §27:25–4(b). The Governor may re-
 move Board members and may veto Board actions; the Legislature
 may veto some eminent domain actions. §§27:25–4(b), (f); §27:25–
 13(h). NJ Transit is now the third largest provider of bus, rail, and
 light rail transit, operating within an area that includes New Jersey,
 New York City, and Philadelphia.
 In 2017, Jeffrey Colt was struck by an NJ Transit bus in Midtown
 Manhattan; a year later, Cedric Galette was injured when an NJ
 Transit bus crashed into a car in which he was a passenger in Phila-
 delphia. Both sued NJ Transit for negligence in their respective home
 state courts. NJ Transit moved to dismiss both lawsuits, arguing that
 it is an arm of New Jersey entitled to sovereign immunity. The New
——————
 *Together with No. 24–1113, New Jersey Transit Corporation et al. v.
Colt et al., on certiorari to the Court of Appeals of New York.
2 GALETTE v. NEW JERSEY TRANSIT CORP.

 Syllabus

 York Court of Appeals held that NJ Transit is not an arm of New Jer-
 sey; the Pennsylvania Supreme Court held the opposite, concluding NJ
 Transit is an arm of New Jersey. This Court consolidated the cases
 and granted certiorari to resolve the conflict.
Held: NJ Transit Corporation is not an arm of New Jersey and thus is
 not entitled to share in New Jersey’s interstate sovereign immunity.
 Pp. 5–23.
 (a) Sovereign immunity is “ ‘personal’ ” to the State and extends only
 to arms of the State itself, College Savings Bank v. Florida Prepaid
 Postsecondary Ed. Expense Bd., 527 U. S. 666, 675 , not to legally inde-
 pendent entities that the State creates. Whether an entity is “an arm
 of the State . . . is a question of federal law” answered by considering
 the “provisions of state law that define the agency’s character.” Re-
 gents of Univ. of Cal. v. Doe, 519 U. S. 425, 429, n. 5 . Pp. 5–10.
 (1) The Court’s early cases focused on whether an entity was a sep-
 arate legal person from the State, with the corporate form serving as
 a key marker of separate legal personhood. A “corporation” was un-
 derstood as “an artificial person” that could “sue and be sued by its
 own members” and “contract with them . . . as with any strangers.”
 Trustees of Dartmouth College v. Woodward, 4 Wheat. 518 , 667–668.
 In Bank of United States v. Planters’ Bank of Ga., 9 Wheat. 904 , the
 Court held that a state-chartered bank was not an arm of Georgia be-
 cause it was a “corporation” and judgments would be satisfied by the
 corporation’s property, not the State’s. Subsequent cases reaffirmed
 this holding even when the State exerted significant control over the
 bank. See, e.g., Bank of Kentucky v. Wister, 2 Pet. 318 , 323–324. The
 Court also applied the same reasoning to cities and counties created as
 municipal corporations. See Lincoln County v. Luning, 133 U. S. 529 ,
 530–530. Pp. 6–7.
 (2) Beginning in the mid-20th century, the Court began taking a
 more holistic view of an entity’s relationship with the State, but re-
 mained focused on whether the State structured the entity to be legally
 separate, with corporate status remaining central. In Moor v. County
 of Alameda, 411 U. S. 693 , 719–721, the Court held that a county was
 not an arm of the State because it was created as a “body corporate
 and politic” with “ ‘corporate powers’ ” and the county alone would be
 “liable for all judgments against it.” In Mt. Healthy City Bd. of Ed. v.
 Doyle, 429 U. S. 274, 280 , the Court framed the inquiry as asking
 whether an entity is “more like a county or city” than “like an arm of
 the State,” and concluded a local school board was not an arm of the
 State. In Lake Country Estates, Inc. v. Tahoe Regional Planning
 Agency, 440 U. S. 391 , and Hess v. Port Authority Trans-Hudson Cor-
 poration, 513 U. S. 30 , the Court found that two bistate entities were
 not arms of the State where they were created as separate legal
 Cite as: 607 U. S. ___ (2026) 3

 Syllabus

entities, judgments against the entities were not binding on the States,
and the entities generated their own revenues and paid their own
debts. Pp. 8–10.
 (b) The Court’s precedents have consistently and predominantly ex-
amined whether the State structured the entity as a legally separate
entity liable for its own judgments. The clearest evidence of legal sep-
arateness is when the State created a corporation with traditional cor-
porate powers to sue and be sued, hold property, make contracts, and
incur debt. A State might create a corporation precisely because of its
independent legal status, allowing the State to distance itself from bur-
dens the corporate entity may incur. When a State makes such a de-
cision, courts should presume the corporation enjoys all the ad-
vantages and disadvantages of separate legal status, including that it
is no longer part of the State itself. Other aspects of state law may
also indicate legal separateness, such as defining the entity as a “sep-
arate legal entity” or excluding it from the definition of “State” for
other purposes.
 The Court’s precedents also focus on whether the entity is liable for
its own judgments or whether the State is formally liable. One central
rationale for sovereign immunity is protecting States’ “ability to make
[their] own decisions about ‘the allocation of scarce resources.’ ” Lewis
v. Clarke, 581 U. S. 155, 167 . If the State is formally liable for judg-
ments against an entity, that entity is more likely an arm of the State.
An entity’s practical financial relationship with the State, such as an
expectation that the State would cover its judgments if needed, or the
State’s history of subsidizing the entity, has less relevance.
 Finally, courts may consider the degree of control the State exerts
over the entity, but should do so with caution because “ultimate control
of every state-created entity resides with the State,” even those that
are not arms of the State. Hess, 513 U. S., at 47 . “Gauging actual
control” can be a “ ‘perilous’ ” and “ ‘unreliable’ ” inquiry. Ibid. The
Court has never found a corporation liable for its own judgments to be
an arm of the State, even when the State had significant control, in-
cluding cases where the State was sole shareholder, possessed appoint-
ment and removal powers, and managed the entity’s affairs. See
Wister, 2 Pet., at 323–324. Pp. 10–13.
 (c) Even if an entity is not an arm of the State, a particular suit or
remedy may require dismissal due to sovereign immunity if the State
is nevertheless the real party in interest. See, e.g., Hopkins v. Clem-
son, 221 U. S. 636 . Because NJ Transit never argued that New Jersey
is the real party in interest in either of these cases, dismissal on this
ground is not implicated here. Pp. 13–15.
 (d) Applying these principles, NJ Transit is not an arm of New Jer-
sey. To start, New Jersey structured NJ Transit as a legally separate
4 GALETTE v. NEW JERSEY TRANSIT CORP.

 Syllabus

 entity: It was created as a “body corporate and politic with corporate
 succession” possessing typical corporate powers, such as the power to
 “[s]ue and be sued,” “enter into contracts,” and “acquire . . . property.”
 §§27:25–4(a), 27:25–5(a), (j), (r). NJ Transit’s corporate status serves
 as strong evidence it is not an arm of the State. Although NJ Transit’s
 organic statute labels it an “instrumentality of the State,” §27:25–4(a),
 that term lacks the historical weight of the corporate form and says
 little about arm-of-the-State status. Other aspects of New Jersey law
 undercut any inference from the term “instrumentality”: The New Jer-
 sey Tort Claims Act and Contractual Liability Act exclude entities with
 sue-and-be-sued authority from the definition of “State.” §§59:1, 59:3,
 59:13–2.
 Second, as NJ Transit concedes, the State is not formally liable for any
 of NJ Transit’s debts or liabilities under New Jersey law. §27:25–17.
 Finally, the control New Jersey exerts over NJ Transit does not
 change the conclusion. Although the State exerts substantial control—
 e.g., Governor’s appointment and removal powers, §27:25–4(b); cabinet
 member chairing the Board, §27:25–4(d); gubernatorial veto power,
 §27:25–4(f); legislative veto over some eminent domain actions,
 §27:25–13(h)—New Jersey law also states NJ Transit “shall be inde-
 pendent of any supervision or control by the [transportation] depart-
 ment” and requires it to “exercise independent judgment.” §§27:25–
 4(a), 27:25–4.1(b)(2)(d). This level of control does not meaningfully af-
 fect NJ Transit’s status with respect to the arm-of-the-State analysis
 given that it is a legally separate corporation responsible for its own
 judgments. Pp. 15–17.
 (e) NJ Transit’s and its amici’s counterarguments are unavailing.
 NJ Transit contends corporate status is not dispositive, but NJ Transit
 is a corporation with all the hallmarks of separate legal personhood,
 and the Court has not previously found a similarly structured corpora-
 tion to be an arm of the State. NJ Transit’s reliance on State Highway
 Comm’n of Wyo. v. Utah Constr. Co., 278 U. S. 194 , is misplaced be-
 cause that case concerned whether the State was the real party in in-
 terest in a particular contract dispute, not whether the entity was in
 the abstract an arm of the State.
 NJ Transit argues its description as serving “public and essential
 governmental functions,” §27:25–4(a), and its delegation of substantial
 public powers demonstrate an intent by New Jersey to create it as an
 arm of the State. The arm-of-the-State analysis, however, focuses not
 on whether the entity serves public functions but on whether the State
 chose to serve those functions through its own apparatus or through a
 legally separate entity. Cities and counties serve public functions and
 exercise police powers but are not arms of the State. Assessing what
 qualifies as an essential governmental function can also be “unsound
 Cite as: 607 U. S. ___ (2026) 5

 Syllabus

 in principle and unworkable in practice.” Garcia v. San Antonio Met-
 ropolitan Transit Authority, 469 U. S. 528, 546 .
 NJ Transit also contends that the Court should consider its practical
 financial relationship with the State, including the degree of state
 funding and the likelihood the State would pay its judgments. Neither
 Lake Country nor Hess supports this position: Lake Country’s discus-
 sion of practical consequences relied on real-party-in-interest cases,
 while its arm-of-the-State analysis discussed only whether the Com-
 pact expressly provided that obligations would not bind the States.
 440 U. S., at 402 . Hess focused on whether the Compact or state laws
 required the States to bear judgments, concentrating on formal liabil-
 ity rather than the entity’s practical financial relationship with the
 State. 513 U. S., at 46 . Hinging arm-of-the-State status to practical
 realities of state funding also risks arbitrary distinctions and incon-
 sistent treatment, as illustrated by New Jersey’s funding of NJ
 Transit’s operating budget oscillating from 15% to 46% over 35 years.
 Finally, NJ Transit points to cases outside the sovereign immunity
 context to argue that the Court should place more weight on the State’s
 control over, and practical financial relationship with, the entity.
 Those cases, however, warned that an entity can count as part of the
 State for some but not other purposes, and thus have little bearing on
 the arm-of-the-State analysis.
 Amici States urge the Court to adopt a rule that a State’s own char-
 acterization of an entity should be dispositive. This position focuses
 on the label the State places on an entity, rather than on whether the
 State structured the entity as legally separate. It also prioritizes one
 characterization (“instrumentality”) over another (“body corporate”),
 and there is no good reason to believe the State intended NJ Transit
 to be part of the State itself by using “instrumentality” when it simul-
 taneously used “body corporate,” a term traditionally understood to
 create a “[s]eparate legal personality,” First Nat. City Bank v. Banco
 Para el Comercio Exterior de Cuba, 462 U. S. 611, 625 . The States’
 preferred test does not promote predictability because it still requires
 courts to decide which state-law pronouncement is dispositive. Con-
 sistency is promoted by adhering to the long line of cases finding state-
 created corporations formally liable for their own judgments not to be
 arms of the States that created them. States maintain the power to
 structure themselves as they wish and are free to amend their laws if
 they intend corporate entities to remain part of the State and for the
 State to assume their liabilities. Pp. 17–23.
No. 24–1021, 332 A. 3d 776 , reversed; No. 24–1113, 43 N. Y. 3d 463, 264
 N. E. 3d 774 , affirmed; and both cases remanded.

 SOTOMAYOR, J., delivered the opinion for a unanimous Court.
 Cite as: 607 U. S. ____ (2026) 1

 Opinion of the Court

 NOTICE: This opinion is subject to formal revision before publication in the
 United States Reports. Readers are requested to notify the Reporter of
 Decisions, Supreme Court of the United States, Washington, D. C. 20543,
 pio@supremecourt.gov, of any typographical or other formal errors.

SUPREME COURT OF THE UNITED STATES
 _________________

 Nos. 24–1021 and 24–1113
 _________________

 CEDRIC GALETTE, PETITIONER
24–1021 v.
 NEW JERSEY TRANSIT CORPORATION
 ON WRIT OF CERTIORARI TO THE SUPREME COURT OF
 PENNSYLVANIA, EASTERN DISTRICT

 NEW JERSEY TRANSIT CORPORATION, ET AL.,
 PETITIONERS
24–1113 v.
 JEFFREY COLT, ET AL.
 ON WRIT OF CERTIORARI TO THE COURT OF APPEALS OF
 NEW YORK
 [March 4, 2026]

 JUSTICE SOTOMAYOR delivered the opinion of the Court.
 States are generally entitled to immunity from being
sued in another State’s courts without their consent. That
sovereign immunity is personal to the State and thus ex-
tends only to arms of the State itself, not to legally inde-
pendent entities that the State creates.
 This pair of cases arises out of two accidents, one in New
York City and one in Philadelphia, in which New Jersey
Transit buses struck and injured people. Both victims sued
New Jersey Transit, a corporation created by the New Jer-
sey Legislature, in their respective home courts in New
York and Pennsylvania. The highest courts in those States
diverged as to whether New Jersey Transit is an arm of
2 GALETTE v. NEW JERSEY TRANSIT CORP.

 Opinion of the Court

New Jersey. The Court granted certiorari to resolve
whether New Jersey Transit is an arm of New Jersey and
thus entitled to the State’s sovereign immunity. It is not.
Accordingly, the judgment of the New York Court of Ap-
peals is affirmed and the judgment of the Pennsylvania Su-
preme Court is reversed.
 I
 A
 Starting in the 1960s and 1970s, New Jerseyans increas-
ingly drove to work. This shift led railroads to curtail com-
muter-rail services connecting the New Jersey suburbs to
New York City and caused significant highway congestion.
The New Jersey Legislature responded by providing heavy
subsidies and operational assistance to the major private
rail and bus companies that served the region, but service
remained severely fragmented.
 In search of a new solution, the Legislature in 1979 cre-
ated the New Jersey Transit Corporation (NJ Transit). See
N. J. Public Transportation Act of 1979, N. J. Stat. §27:25–
1 et seq. (2026). The State structured the entity as a “body
corporate and politic with corporate succession.” §27:25–
4(a). The “corporation” was “constituted as an instrumen-
tality of the State exercising public and essential govern-
mental functions.” Ibid. It was “allocated within the De-
partment of Transportation,” but “the corporation” was
“independent of any supervision or control by the depart-
ment or by any body or officer thereof.” Ibid.
 The State gave NJ Transit significant authority. For in-
stance, it has the power to: make its own bylaws; sue and
be sued; enter into contracts; acquire or deal in and with
real or personal property; raise funds from fares, gifts,
grants, or loans; own and control any corporate entity ac-
quired or formed to carry out its objectives; adopt rules and
regulations as necessary; and exercise eminent domain
powers. §§27:25–5, 27:25–13. Moreover, NJ Transit’s
 Cite as: 607 U. S. ____ (2026) 3

 Opinion of the Court

organic statute provides that “[n]o debt or liability of the
corporation shall be deemed or construed to create or con-
stitute a debt, liability, or a loan or pledge of the credit of
the State.” §27:25–17. It also states that “[a]ll expenses
incurred by the corporation . . . shall be payable from funds
available to the corporation” and that “no liability or obli-
gation shall be incurred by the corporation beyond the ex-
tent to which moneys are available.” Ibid.
 The corporation is governed by a board of directors
(Board). §27:25–4(b). The Board has 13 members, 11 of
whom are voting members. Ibid. The voting members con-
sist of three ex officio members from the Governor’s cabinet,
six members appointed with the advice and consent of the
Senate, and two members appointed on the recommenda-
tion of the President of the Senate and Speaker of the Gen-
eral Assembly. Ibid. The Governor may remove any Board
member (eight of whom only for cause) and may veto any
action the Board takes. §§27:25–4(b), (f ). The Legislature
may also veto some eminent domain actions. §27:25–13(h).
 Once created, the Board adopted its own bylaws and
hired a President and CEO to manage day-to-day opera-
tions. It then acquired and consolidated the assets of sev-
eral major rail and bus services operating in and around
New Jersey. In the last several decades, the Legislature
has appropriated funding for NJ Transit’s operational
budget each year, covering anywhere from 15% to 46% of
that budget. Brief for NJ Transit 35. NJ Transit also re-
ceives funding from the State and the Federal Government
for its capital projects.1 NJ Transit’s revenues have fluctu-
ated over time; in 2024, it generated $832 million in oper-
ating revenues.2

——————
 1 See NJ Transit Corp., New Jersey Transit Corporation Annual Finan-

cial Report (Year Ended June 30, 2024), p. 11, https://perma.cc/Z2H5-
ZJ48.
 2 Id., at 4.
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 Opinion of the Court

 Today, NJ Transit is the Nation’s third largest provider
of bus, rail, and light rail transit, operating within a 5,300-
square-mile area that includes New Jersey, New York City,
and Philadelphia.
 B
 In 2017, Jeffrey Colt was crossing 40th Street in Midtown
Manhattan when an NJ Transit bus struck him and
knocked him to the ground. A year later, Cedric Galette
was a passenger in a car driving down Market Street in
Philadelphia when an NJ Transit bus crashed into the car.
Both were seriously injured.
 Colt and Galette sued NJ Transit for negligence in their
respective home state courts: Colt in New York and Galette
in Pennsylvania. NJ Transit moved to dismiss both law-
suits, arguing that it is an arm of New Jersey and thus en-
titled to New Jersey’s sovereign immunity.
 The New York Court of Appeals held that NJ Transit is
not an arm of New Jersey. 43 N. Y. 3d 463, 466, 264 N. E.
3d 774 , 776 (2024). The court first observed that the Fed-
eral Courts of Appeals have analyzed whether an entity is
an arm of the State using “an array of multifactor and mul-
tistep tests.” Id., at 472, 264 N. E. 3d, at 780.3 It then dis-
tilled from those cases a three-factor inquiry: “(1) how the
State defines the entity and its functions, (2) the State’s
power to direct the entity’s conduct, and (3) the effect on the
State of a judgment against the entity.” Id., at 473, 264
N. E. 3d, at 781. Applying those factors, the court held that

——————
 3 See, e.g., Fresenius Medical Care Cardiovascular Resources, Inc. v.

Puerto Rico and Caribbean Cardiovascular Center Corp., 322 F. 3d 56,
68 (CA1 2003); Mancuso v. New York State Thruway Auth., 86 F. 3d 289 ,
293 (CA2 1996); Karns v. Shanahan, 879 F. 3d 504, 513 (CA3 2018);
Springboards to Education, Inc. v. McAllen Independent School Dist., 62
F. 4th 174 , 178–179 (CA5 2023); Kohn v. State Bar of Cal., 87 F. 4th 1021 ,
1027–1030 (CA9 2023) (en banc); Puerto Rico Ports Auth. v. Federal Mar-
itime Comm’n, 531 F. 3d 868, 874 (CADC 2008) (Kavanaugh, J.).
 Cite as: 607 U. S. ____ (2026) 5

 Opinion of the Court

NJ Transit is not an arm of New Jersey and that Colt’s suit
could thus proceed.
 The Pennsylvania Supreme Court, however, held the op-
posite, concluding that NJ Transit is an arm of New Jersey.
 332 A. 3d 776 , 779 (2025). It applied its own six-factor test,
which considers: “ ‘(1) the legal classification and descrip-
tion of the entity within the governmental structure of the
State, both statutorily and under its caselaw; (2) the degree
of control the State exercises over the entity, both through
the power of appointment, and the power to subsequently
veto its actions; (3) the power of the entity’s board to inde-
pendently raise revenue on its own; (4) the degree of fund-
ing provided by the State to the entity relative to other
funding sources; (5) whether any monetary obligation in-
curred by the entity is binding upon the State; and (6)
whether the core function of the entity . . . can be catego-
rized as a function which is normally performed by local
government or State government.’ ” Id., at 785–786 (brack-
ets omitted). Under that test, the Pennsylvania Supreme
Court concluded that NJ Transit is an arm of New Jersey
and thus dismissed Galette’s suit.
 This Court granted certiorari to resolve the conflict and
consolidated the cases. 606 U. S. 959 (2025).4
 II
 A State’s immunity from suit is a “fundamental aspect of
the sovereignty which the States enjoyed before the ratifi-
cation of the Constitution, and which they retain today.”
Alden v. Maine, 527 U. S. 706, 713 (1999). State sovereign
immunity bars private parties from suing a nonconsenting
State in that State’s own courts or in the courts of another
State. See Franchise Tax Bd. of Cal. v. Hyatt, 587 U. S. 230 ,
——————
 4 After this Court granted certiorari, NJ Transit filed an application for

stay of Colt’s pending damages trial in the Supreme Court of the State
of New York. This Court stayed the trial pending issuance of the man-
date in these cases. 606 U. S. 1051 (2025).
6 GALETTE v. NEW JERSEY TRANSIT CORP.

 Opinion of the Court

249 (2019). In so doing, it prevents “the indignity of sub-
jecting a State to the coercive process of judicial tribunals
at the instance of private parties.” In re Ayers, 123 U. S.
443, 505 (1887). It also protects the State from “being
thrust . . . against its will, into the disfavored status of a
debtor, subject to the power of private citizens to levy on its
treasury.” Alden, 527 U. S., at 749 .
 Sovereign immunity, however, is “ ‘personal’ ” to the State
itself. College Savings Bank v. Florida Prepaid Postsecond-
ary Ed. Expense Bd., 527 U. S. 666, 675 (1999). It does not
extend to “lesser entities,” such as “municipal corpora-
tion[s] or other governmental entit[ies]” that are not
“arm[s] of the State.” Alden, 527 U. S., at 756 . Whether an
entity is “an arm of the State . . . is a question of federal
law” that “can be answered only after considering the pro-
visions of state law that define the agency’s character.” Re-
gents of Univ. of Cal. v. Doe, 519 U. S. 425, 429, n. 5 (1997).
Before addressing whether NJ Transit is an arm of New
Jersey, the Court first sets forth the principles that have
guided the arm-of-the-State inquiry in its precedents.
 A
 1
 When examining the relationship between the State and
an entity it created, this Court’s early cases focused on
whether the entity was a separate legal person from the
State. One key marker of separate legal personhood was
the corporate form. At common law, a “corporation” was
“an artificial person, existing in contemplation of law, and
endowed with” “certain immunities, privileges, and capaci-
ties in its collective character, which do not belong to the
natural persons composing it.” Trustees of Dartmouth Col-
lege v. Woodward, 4 Wheat. 518, 667 (1819). As a result of
its separate legal personhood, a corporation could “sue and
be sued by its own members” and “contract with them in the
same manner as with any strangers.” Id., at 667–668.
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 Opinion of the Court

 This Court first applied this idea of corporate personhood
to the arm-of-the-State inquiry in Bank of United States v.
Planters’ Bank of Ga., 9 Wheat. 904 (1824). It held that a
state-chartered bank was not an arm of Georgia because it
was a “corporation” and “the judgment” would “be satisfied
by the property of the corporation, not by that of the indi-
vidual corporators.” Id., at 907 . Chief Justice Marshall ex-
plained that the “State of Georgia, by giving to the Bank the
capacity to sue and be sued, voluntarily strips itself of its
sovereign character, so far as respects the transactions of
the Bank, and waives all the privileges of that character.”
 Id., at 907–908. Subsequent cases reaffirmed Planters’
Bank’s holding, relying on the corporate status of other
state-chartered banks to deny them sovereign immunity.
That was true even when the State exerted significant con-
trol over the bank, such as by being its sole shareholder or
possessing appointment and removal power over its offic-
ers. See, e.g., Bank of Kentucky v. Wister, 2 Pet. 318 , 323–
324 (1829); Briscoe v. Bank of Kentucky, 11 Pet. 257 , 326–
327 (1837); Curran v. Arkansas, 15 How. 304, 309 (1853).
 The Court applied the same reasoning to cities and coun-
ties that were created as municipal corporations. The Court
explained that the corporate form of such entities, which
included the power to “sue and be sued,” likewise made
them legal persons separate from the sovereign and thus
not entitled to share in the State’s sovereign immunity. See
Lincoln County v. Luning, 133 U. S. 529 , 530–531 (1890).
 Employing similar logic, the Court also held that entities
created by the Federal Government were not its “arms”
when they possessed the separate personhood of a corpora-
tion. See, e.g., Metropolitan R. Co. v. District of Columbia,
 132 U. S. 1 , 7–8 (1889); Sloan Shipyards Corp. v. United
States Shipping Bd. Emergency Fleet Corporation, 258 U. S.
549 , 566–568 (1922); Federal Land Bank of St. Louis v.
Priddy, 295 U. S. 229 , 235–237 (1935); Keifer & Keifer v.
8 GALETTE v. NEW JERSEY TRANSIT CORP.

 Opinion of the Court

Reconstruction Finance Corporation, 306 U. S. 381 , 393–
394 (1939).
 2
 Beginning in the mid-20th century, the Court began to
consider additional features of an entity’s relationship with
the State in the arm-of-the-State inquiry. Even so, the
analysis remained focused on discerning whether the State
had structured the entity to be legally separate, and corpo-
rate status remained central to that analysis.
 For example, in Moor v. County of Alameda, 411 U. S. 693
(1973), the Court addressed whether a county was an arm
of the State, and therefore not a “citizen,” for purposes of
diversity jurisdiction. Id., at 717–718 (explaining that a
State is not a “citizen” for diversity purposes). The county
at issue argued that its designation, by the California Con-
stitution, as a “ ‘legal subdivisio[n] of the State’ ” established
its status as an arm of the State. Id., at 718–719. The
Court, however, disagreed. It explained that the county
was also created as a “ ‘body corporate and politic,’ ” which
meant, “[m]ost notably,” that the county was given “ ‘corpo-
rate powers,’ ” such as the ability to “sue and be sued,” to
“deal in property,” and to make “contract[s].” Id., at 719 .
Financially, moreover, the county alone would be “liable for
all judgments against it” and could issue bonds without cre-
ating an “obligation on the part of the State.” Id., at 719–
720. Finally, the Court observed that, given the county’s
corporate status, the California Supreme Court had held
that counties could be sued by the State. Id., at 720–721.
The Court thus concluded that the county was not an arm
of the State because the county had a “sufficiently inde-
pendent corporate character.” Id., at 721 .
 Resting on the firmly established rule that municipal cor-
porations and counties are not arms of the State, the Court
in Mt. Healthy City Bd. of Ed. v. Doyle, 429 U. S. 274 (1977),
framed the arm-of-the-State inquiry as asking whether an
 Cite as: 607 U. S. ____ (2026) 9

 Opinion of the Court

entity is “more like a county or city” than “like an arm of
the State.” Id., at 280. In answering that question for the
entity at issue, a local school board, the Court examined the
characteristics of the board under state law. It observed
that the board was created as a “ ‘political subdivisio[n]’ ”
distinct from the “ ‘State,’ ” that it had powers to issue bonds
and levy taxes, and that it received money and guidance
from the State. Ibid. Those characteristics led the Court to
conclude that the board was “more like a county or city” and
thus not entitled to immunity. Id., at 280–281.
 The Court again asked whether an entity was “compara-
ble to a county or municipality” or rather an arm of the
State in Lake Country Estates, Inc. v. Tahoe Regional Plan-
ning Agency, 440 U. S. 391, 401 (1979). There, the entity at
issue was the Tahoe Regional Planning Agency, a bistate
entity created by California and Nevada alongside the Fed-
eral Government under the Compact Clause. Id., at 394 .
The Court explained that the interstate compact created
the agency as a “ ‘separate legal entity’ ” and a “ ‘political
subdivision’ ” and that judgments against the agency were
not binding on either State. Id., at 401–402. The Court also
observed that most of the agency’s governing members were
not appointed by the States; that its rulemaking authority
was not subject to any state-level veto; that the agency’s
function (land-use regulation) was a traditional local gov-
ernment function; and that California had previously sued
it. Ibid. The agency, the Court concluded, was therefore
not an arm of either State. Id., at 402 .
 Finally, in Hess v. Port Authority Trans-Hudson Corpo-
ration, 513 U. S. 30 (1994), the Court again found that a bi-
state entity created under the Compact Clause was not an
arm of the State. It explained that the Authority was de-
scribed in the compact and state laws as a “ ‘joint or common
agency,’ ” a “ ‘body corporate and politic,’ ” and a “ ‘municipal
corporate instrumentality’ ” of New York and New Jersey.
 Id., at 44–45. Financially, the States were not liable for the
10 GALETTE v. NEW JERSEY TRANSIT CORP.

 Opinion of the Court

Authority’s debts or judgments; the Authority was barred
from pledging the credit of either State or from borrowing
money in any name but its own; and the entity generated
its own revenue. Id., at 46 . The Court acknowledged that
the States exerted significant control over the Authority—
they had appointment and removal power over the commis-
sioners, the Governors could veto the Authority’s actions,
and the States’ legislatures could determine what projects
the Authority would pursue—but rejected control as a “dis-
positive” factor in its overall analysis. Id., at 47–48. In the
end, after considering the above facts and the underlying
purposes of sovereign immunity, the Court concluded that
the Authority’s status as a “discrete entity” that “generates
its own revenues” and “pays its own debts” ultimately ren-
dered it not an arm of the State. Id., at 52 .
 B
 Although the Court’s arm-of-the-State cases have ac-
counted for various considerations over time, those prece-
dents have consistently, and predominantly, examined
whether the State structured the entity as a legally sepa-
rate entity liable for its own judgments.
 The clearest evidence that a State has created a legally
separate entity is that it created a corporation with the tra-
ditional corporate powers to sue and be sued, hold property,
make contracts, and incur debt. See Planters’ Bank, 9
Wheat., at 907–908; Lincoln County, 133 U. S., at 530–531;
Hess, 513 U. S., at 44–45. The corporate form is particu-
larly salient because it has “long [been] settled as a matter
of American corporate law that separately incorporated or-
ganizations are separate legal units with distinct legal
rights and obligations.” Agency for Int’l Development v. Al-
liance for Open Society Int’l, Inc., 591 U. S. 430 , 435 (2020).
Indeed, “[s]eparate legal personality has been described as
‘an almost indispensable aspect of the public corporation.’ ”
 Cite as: 607 U. S. ____ (2026) 11

 Opinion of the Court

First Nat. City Bank v. Banco Para el Comercio Exterior de
Cuba, 462 U. S. 611, 625 (1983).
 In fact, a State might choose to create a corporation, ra-
ther than an unincorporated government agency, precisely
because of its independent legal status. This move allows
the State to distance the entity from burdens that apply to
the State itself or to distance the State from the burdens
that the corporate entity may incur. For instance, States
initially created banks as corporations in part because
States themselves are not permitted to “emit Bills of Credit”
under the Constitution. Art. I, §10; see Briscoe, 36 U. S., at
326–327. States have also created corporations to circum-
vent state constitutional debt limitations placed on state
agencies. See, e.g., Schulz v. State, 84 N. Y. 2d 231, 243–
244, 639 N. E. 2d 1140 , 1145–1146 (1994). When it comes
to facilitating certain projects, such as high-risk, long-term
capital investments, States may establish corporations in
order to shield themselves from the responsibility and,
more importantly, the liability that the corporation’s pro-
jects may incur. When a State makes such a decision,
courts should presume that the corporation enjoys all the
advantages and disadvantages of separate legal status, in-
cluding the fact that the corporate entity is no longer part
of the State itself.
 The corporate form, however, is not the only structure
that signals the State has created a legally separate entity.
Other aspects of state law may indicate legal separateness
as well. Most obviously, the entity could be described as a
“ ‘separate legal entity.’ ” Lake Country, 440 U. S., at 401 .
State law also might define the entity as not part of the
State for other purposes. See Moor, 411 U. S., at 719 (state
law defined county as a “ ‘local public entity’ ” instead of the
“State” for purposes of suits against public entities). The
ultimate question remains whether the State structured
the entity as part of itself or as legally independent.
12 GALETTE v. NEW JERSEY TRANSIT CORP.

 Opinion of the Court

 The Court’s precedents also focus on whether the entity
is liable for its own judgments or whether the State is for-
mally liable, i.e., whether “any judgment” against the entity
“must be satisfied out of the state treasury.” Hess, 513
U. S., at 51 ; Planters’ Bank, 9 Wheat., at 907 , see also Re-
gents, 519 U. S., at 430 . One of the central “underlying ra-
tionales for state sovereign immunity” is protecting States’
“ability to make [their] own decisions about ‘the allocation
of scarce resources.’ ” Lewis v. Clarke, 581 U. S. 155, 167
(2017) (quoting Alden, 527 U. S., at 751 ). If the State is for-
mally liable for judgments against an entity, that entity is
more likely to be an arm of the State because its liabilities
necessarily undermine the State’s ability to make choices
about how to allocate the State fisc.
 In contrast to formal legal liability, an entity’s practical
financial relationship with the State, such as its expecta-
tion that the State would cover its judgments if needed, has
less relevance. Just as a State cannot lose its sovereign im-
munity by “requir[ing] a third party to reimburse it” (such
as by buying insurance), Regents, 519 U. S., at 431 , a State
cannot imbue an entity with its immunity simply by agree-
ing to “pick up the tab” (such as by choosing to indemnify
the entity), Lewis, 581 U. S., at 165 . Similarly, a State’s
history of subsidizing an entity carries little weight. State
governments routinely fund nonprofits, private corpora-
tions, and municipalities, but the receipt of those state
funds does not mean that those entities become part of the
State itself, even when the funding is a “significant
amount,” Mt. Healthy, 429 U. S., at 280 .
 Finally, the Court’s cases also suggest that courts may
consider the degree of control the State exerts over the en-
tity, but courts should do so with caution. Control is not
especially probative because “ultimate control of every
state-created entity resides with the State,” even those that
are not arms of the State. Hess, 513 U. S., at 47 . Cities,
counties, school boards, and state-created banks have all
 Cite as: 607 U. S. ____ (2026) 13

 Opinion of the Court

been recognized as legally separate entities from the States,
even though “the State may destroy or reshape any” of these
entities that “it create[d].” Ibid. Further, “[g]auging actual
control . . . can be a ‘perilous inquiry’ ” and “ ‘an uncertain
and unreliable exercise.’” Ibid. (quoting Note, 92 Colum.
L. Rev. 1243 , 1284 (1992)). That is because the State might
exercise control through various formal and informal lev-
ers, from appointing and removing officers, to directing pro-
jects or vetoing actions, to monitoring day-to-day opera-
tions, all of which are difficult to weigh against one another
individually, let alone when assessing them in different
combinations.
 In fact, this Court has never once found a corporation
that was liable for its own judgments to be an arm of the
State, even when the State had significant control over the
entity. That includes cases in which the State was the sole
shareholder, possessed appointment and removal powers
over the entity’s officers, and “ ‘manage[d]’ ” the entity’s “ ‘af-
fairs.’ ” Wister, 2 Pet., at 323–324 (Bank of Commonwealth
of Kentucky); see Briscoe, 36 U. S., at 344 (Story, J., dis-
senting) (describing Kentucky’s appointment and removal
powers over the Bank of Commonwealth of Kentucky). It
also includes a case in which the State possessed appoint-
ment and removal powers over the entity’s officers, veto
power over its actions, and “determine[d] the projects [it]
undert[ook].” Hess, 513 U. S., at 44–47.5

——————
 5 This discussion is not intended to exhaust all considerations that may

be relevant to the arm-of-the-State analysis, and instead focuses on the
considerations most pertinent to these cases. Additional considerations
may apply, for example, in cases involving bistate entities or unincorpo-
rated entities. See Hess, 513 U. S., at 40 (describing that “[b]istate enti-
ties occupy a significantly different position in our federal system than
do the States themselves”); Auer v. Robbins, 519 U. S. 452, 456, n. 1
(1997) (cursorily conducting analysis to conclude that an unincorporated
Board of Police Commissioners, Mo. Rev. Stat. §§84.210 , 84.030 (1994),
was not an arm of Missouri).
14 GALETTE v. NEW JERSEY TRANSIT CORP.

 Opinion of the Court

 C
 Even if an entity is not an arm of the State, the Court has
long recognized that a State’s sovereign immunity may still
require dismissal of the action if the State is the real party
in interest in that particular case. Although the arm-of-the-
State and the real-party-in-interest doctrines are related,
they can provide separate bases for dismissal.
 When a State is not named as a defendant in a lawsuit,
it may still be the real party in interest. For instance, a
damages claim against a state or federal officer in their of-
ficial capacity is barred by sovereign immunity because
“[t]he real party in interest is the government entity, not
the named official.” Lewis, 581 U. S., at 162 ; see Edelman
v. Jordan, 415 U. S. 651 , 663–665 (1974) (suit for retroac-
tive damages against state official in his official capacity
required dismissal because it ran against the state treas-
ury). Similarly, a particular remedy may be barred by sov-
ereign immunity if it runs directly against the State. See
Ayers, 123 U. S., at 502–503 (injunction to compel a State’s
attorney general to perform contract required dismissal be-
cause it was “in substance, though not in form, a suit
against the state”); Governor of Georgia v. Madrazo, 1 Pet.
110 , 123–124 (1828) (equitable relief in suit against a Gov-
ernor required dismissal because “the state itself may be
considered as a party on the record”). In these instances,
the case or remedy requires dismissal because the State is
the real party in interest, not because the named defendant
is an arm of the State.
 This Court’s decision in Hopkins v. Clemson, 221 U. S.
636 (1911), helps illustrate the difference between these
two related paths of analysis. In Hopkins, a plaintiff sued
a state college for building an embankment on the side of a
river, which redirected the river’s flow and “ruined” his
downstream property. Id., at 641–642. He sought both
damages and an order to remove the embankment. The
Court held that the damages claim could proceed because
 Cite as: 607 U. S. ____ (2026) 15

 Opinion of the Court

the college was not an arm of the State, explaining that the
college was instead a corporation that “might sue and be
sued, plead and be impleaded, in its corporate name.” Id.,
at 646. Nevertheless, the Court explained that, because the
State owned the title to the land on which the embankment
sat, the State might be a “necessary party.” Id., at 648–649.
If so, any order to remove the embankment would run di-
rectly against the State and would require the State’s con-
sent to be sued. Ibid. The Court therefore remanded for
the lower court to determine whether the State was a nec-
essary party and to “stri[ke]” that part of the suit if it was.
Id., at 649. In other words, the injunctive remedy would
have required dismissal if the State were the real party in
interest, but not because the college was an arm of the
State.6
 III
 A
 Under the principles articulated above, NJ Transit is not
an arm of New Jersey.
 To start, New Jersey structured NJ Transit as a legally
separate entity. NJ Transit was created as a “body corpo-
rate and politic with corporate succession.” N. J. Stat.
§27:25–4(a). Consistent with that label, NJ Transit pos-
sesses typical corporate powers, such as the power to “[s]ue
and be sued,” “enter into contracts,” and “[p]urchase, . . . or
otherwise acquire, . . . real or personal property,” among
others. §§27:25–5(a), (j), (r). It also has the power to
“[m]ake and alter bylaws,” “[s]et and collect fares,” raise
funds from “gifts, grants, or loans,” “[e]stablish” its own “op-
erating divisions, “[a]dopt and maintain” its own “employee
benefit programs,” and even “[o]wn” and “control” any “cor-
porate entity” that it “acquired” or “formed” to carry out its
——————
 6 NJ Transit has never argued that New Jersey is the real party in in-

terest in either of these two cases. These cases therefore do not implicate
whether dismissal is required on this ground.
16 GALETTE v. NEW JERSEY TRANSIT CORP.

 Opinion of the Court

statutory objectives. §§27:25–5(c), (g), (m), (n), (t), (u). NJ
Transit’s corporate status serves as strong evidence that it
is not an arm of the State. See, e.g., Planters’ Bank, 9
Wheat., at 907–908; Hess, 513 U. S., at 44–46.
 True, NJ Transit’s organic statute also labels it an “in-
strumentality of the State.” §27:25–4(a). The term “instru-
mentality,” however, lacks the historical weight the corpo-
rate form does and says little about whether an entity is an
arm of the State. See, e.g., Regents, 519 U. S., at 429 (ask-
ing “whether a state instrumentality may invoke the State’s
immunity,” making clear that not all state instrumentali-
ties are immune). Moreover, other aspects of New Jersey
law undercut any inference that the term “instrumentality”
favors NJ Transit’s position. The New Jersey Tort Claims
Act, for instance, excludes entities with sue-and-be-sued
authority, like NJ Transit, from its definition of the “State.”
§§59:1–1, 59:1–3 (2026). The New Jersey Contractual Lia-
bility Act also specifies that entities with sue-and-be-sued
authority are not part of the State. §59:13–2. All told, NJ
Transit is therefore structured as a legally separate entity
under state law.
 Second, the State is not formally liable for any of NJ
Transit’s debts or liabilities. New Jersey law provides that
“[n]o debt or liability of the corporation shall be deemed or
construed to create or constitute a debt, liability, or a loan
or pledge of the credit of the State.” §27:25–17. Before this
Court, NJ Transit concedes that “New Jersey is not for-
mally liable for NJ Transit’s debts.” Brief for NJ Transit
34.
 Finally, the control that New Jersey exerts over NJ
Transit does not change the overall conclusion here. Un-
doubtedly, the State exerts a substantial amount of control
over NJ Transit. The Governor has appointment and re-
moval powers over the Board, §27:25–4(b); a state cabinet
member (the Commissioner of Transportation) chairs the
Board, §27:25–4(d); the Governor may veto any of the
 Cite as: 607 U. S. ____ (2026) 17

 Opinion of the Court

Board’s actions, §27:25–4(f ); and the Legislature may veto
some eminent-domain actions, §27:25–13(h). On the other
hand, New Jersey law states that NJ Transit “shall be in-
dependent of any supervision or control by the [transporta-
tion] department or by any body or officer thereof,” and re-
quires that it “exercise independent judgment.” §§27:25–
4(a), 27:25–4.1(b)(2)(d). In addition, the Governor’s re-
moval authority for 8 of the 13 board members is limited to
for-cause removal. §27:25–4(b). This level of control does
not meaningfully affect NJ Transit’s status, given the fact
that it is a legally separate corporation and is responsible
for its own judgments.
 B
 NJ Transit’s and its amici’s counterarguments are una-
vailing. To start, NJ Transit contends that formal corpo-
rate status, which ordinarily includes a sue-and-be-sued
power, is not dispositive in the arm-of-the-State analysis.
True: As described above, the “corporation” label itself is
not dispositive. See supra, at 10–11. NJ Transit, however,
is a corporation that has all the hallmarks of separate legal
personhood, such as the power to sue and be sued, make
contracts, and hold property in its own name, which all in-
dicate that it is not an arm of the State and does not share
in its immunity from suit. This Court has not previously
found a similarly structured corporation to be an arm of the
State.
 NJ Transit also contends that this Court’s precedents
have placed little weight on the formal aspects of corporate
separateness, such as sue-and-be-sued clauses, citing State
Highway Comm’n of Wyo. v. Utah Constr. Co., 278 U. S. 194
(1929), for support. First, that case does not help its posi-
tion. There, the Court held that a suit against the State
Highway Commission of Wyoming had to be dismissed (for
lack of diversity jurisdiction) because the contract at issue
was between a construction company and the “State [of
18 GALETTE v. NEW JERSEY TRANSIT CORP.

 Opinion of the Court

Wyoming], acting through the highway commission,” and
thus the “real part[y] in interest” was the State itself. Id.,
at 199–200. Given that the suit, “in effect, [wa]s against
the State and must be so treated,” it was “unnecessary for
[the Court] to consider” other formal aspects of legal sepa-
rateness like the Highway Commission’s “grant of power to
sue or be sued.” Id., at 199 . The important fact was not
that the commission was, in the abstract, an arm of the
State; it was rather that this particular “suit” was against
the State as the “real part[y] in interest.” Id., at 199–200.
Second, and more importantly, many of this Court’s cases
throughout history have emphasized that the corporate
form, which typically includes the power to sue and be sued,
weighs strongly against arm-of-the-State status. See su-
pra, at 6–10.7
 Next, NJ Transit argues that New Jersey demonstrated
its intent to create NJ Transit as an arm of the State by
describing it as serving “public and essential governmental
functions,” §27:25–4(a), and delegating to it “substantial
plenary public powers,” such as the power to operate a
——————
 7 NJ Transit also relies on several cases that did not squarely confront

the arm-of-the-State inquiry. Two cases addressed whether, and to what
extent, a “sue and be sued” clause waives sovereign immunity. See
Thacker v. TVA, 587 U. S. 218, 221 (2019); College Savings Bank v. Flor-
ida Prepaid Postsecondary Ed. Expense Bd., 527 U. S. 666, 676 (1999).
Neither case addressed the relevance of the clause with respect to the
arm-of-the-State inquiry, however, because the Court assumed in both
cases that the entities at issue were entitled to sovereign immunity to
begin with. Thacker, 587 U. S., at 221 ; College Savings Bank, 527 U. S.,
at 671, 676 . Another two cases held that a plaintiff State could sue an-
other State for actions taken by a state-created corporate agency at the
defendant State’s direction. See Missouri v. Illinois, 180 U. S. 208, 242
(1901); New York v. New Jersey, 256 U. S. 296, 302 (1921). Those cases
did not address whether the corporate entities were arms of the State
(such that every suit against them should be considered a suit against
the State itself ), but rather held that the State was the proper defendant
in those particular cases because the State directed the agency to conduct
the activities over which the plaintiffs sued.
 Cite as: 607 U. S. ____ (2026) 19

 Opinion of the Court

police force, exercise eminent domain power, and promul-
gate regulations, Brief for NJ Transit 22. The arm-of-the-
State analysis, however, focuses not on whether the entity
serves public functions, but rather on whether the State has
chosen to serve those public functions through its own ap-
paratus or through that of a legally separate entity. That
is why the Court has long recognized that cities and coun-
ties are not arms of the State despite serving public func-
tions and exercising police powers. See Lincoln County, 133
U. S., at 530–531 (municipal corporations); Mt. Healthy,
 429 U. S., at 281 (school board). It is also why a “charitable
organization may undertake rescue or other good work
which, in its absence, we would expect the State to shoul-
der[, b]ut none would conclude . . . that in times of flood or
famine the American Red Cross, to the extent it works for
the public, acquires the States’ . . . immunity” as a result.
Hess, 513 U. S., at 51 .
 Moreover, assessing what qualifies as an essential gov-
ernmental function can be “unsound in principle and un-
workable in practice.” Garcia v. San Antonio Metropolitan
Transit Authority, 469 U. S. 528, 546 (1985). It has the ten-
dency to produce “inconsistent results” and hamper States’
abilities to experiment by forcing them to “pay an added
price when they meet the changing needs of their citizenry
by taking up functions that an earlier day and a different
society left in private hands.” Id., at 546–547. Here, for
example, transportation services and infrastructure are
“not readily classified as typically state or unquestionably
local” given that “States and municipalities alike own and
operate bridges, tunnels, ferries, marine terminals, air-
ports, bus terminals, industrial parks, [and] also commuter
railroads.” Hess, 513 U. S., at 45 . What is more, as shown
by the history of NJ Transit itself, these services and func-
tions used to be fulfilled primarily by private railroad and
bus companies. See supra, at 3 (describing NJ Transit’s ac-
quisition of major private rail and bus companies). Instead
20 GALETTE v. NEW JERSEY TRANSIT CORP.

 Opinion of the Court

of deciding whether the operation of commuter rail and
buses is a governmental function, the arm-of-the-State
analysis concentrates on the fact that New Jersey chose to
pursue those functions through the creation of a legally sep-
arate corporation.
 NJ Transit also contends that the Court should consider
not only formal liability, but also the practical reality of its
financial relationship with the State. According to NJ
Transit, this includes whether and to what degree the State
funds the entity and whether the State is likely to voluntar-
ily pay the entity’s judgments. Brief for NJ Transit 34–37.
In support of this position, NJ Transit relies on Lake Coun-
try and Hess. Neither case bears the weight NJ Transit
places on it.
 It is true, as Lake Country explained, that this Court has
allowed entities to invoke sovereign immunity “in order to
protect the state treasury from liability that would have
had essentially the same practical consequences as a judg-
ment against the State itself.” 440 U. S., at 401 . That
statement, however, relied on cases concerning whether a
State was the real party in interest in a particular lawsuit.
Ibid., and n. 18 (citing Edelman, 415 U. S. 651 ; and Ford
Motor Co. v. Department of Treasury of Ind., 323 U. S. 459
(1945)). As discussed above, that is a separate question
from whether an entity is the arm of the State. See supra,
at 14–15. On that question, Lake Country’s arm-of-the-
State analysis discussed only whether the Compact “ex-
pressly provide[d] that obligations of [the entity] shall not
be binding on either State.” 440 U. S., at 402 (emphasis
deleted).
 Turning to Hess, that case framed the inquiry as asking
whether the “State [was] in fact obligated to bear” the en-
tity’s judgments “both legally and practically,” and men-
tioned that the entity had generated its own revenue for
years. 513 U. S., at 45–46, 51. In answering that inquiry,
the Court focused on whether “the compact or the laws of
 Cite as: 607 U. S. ____ (2026) 21

 Opinion of the Court

either State” required them to do so, and the Court ulti-
mately concluded that the States’ lack of “legal liability for
Port Authority debts” and formal “responsib[ility] for the
payment of judgments” cut against arm-of-the-State status.
Id., at 46. Hess’s concentration on formal liability, rather
than an overall evaluation of the entity’s financial relation-
ship with the State, is confirmed by this Court’s other prec-
edents as well. See, e.g., Planters’ Bank, 9 Wheat., at 907
(“judgment[s]” against state-created bank would “be satis-
fied by the property of the corporation, not by that of the
individual corporators”); Moor, 411 U. S., at 719 (the
“county alone” would be “liable for all judgments”).8
 Hinging an entity’s arm-of-the-State status to the practi-
cal realities of state funding also risks arbitrary distinc-
tions and inconsistent treatment of the same entity. These
cases illustrate the problem: In the last 35 years, New Jer-
sey’s funding of NJ Transit’s annual operating budget has
oscillated anywhere from 15% to 46% of the budget. Brief
for NJ Transit 35. Although NJ Transit maintains that it
is and has always been an arm of New Jersey, it offers no
meaningful way to decide how much funding is enough to
prove it is “financially integrated with the State and finan-
cially dependent on it.” Id., at 34. The more apt question
instead is whether the State would be formally obligated to
pay the entity’s judgments. See, e.g., Planters’ Bank, 9
Wheat., at 907 ; Moor, 411 U. S., at 719 .
 More generally, NJ Transit advocates for an arm-of-the-
State inquiry that places more weight on the State’s control

——————
 8 Hess also discussed two Circuit cases involving “transit facilities that

place[d] heavy fiscal tolls on their founding States.” 513 U. S., at 49–50.
In those cases, even though the entities’ originating statutes did not
make the States liable for their judgments, the States operated the re-
spective entities under distinctive federal statutory obligations not pre-
sent here. See Alaska Cargo Transp., Inc. v. Alaska R. Corp., 5 F. 3d
378, 381 (CA9 1993); Morris v. WMATA, 781 F. 2d 218 , 225–227 (CADC
1986).
22 GALETTE v. NEW JERSEY TRANSIT CORP.

 Opinion of the Court

over, and practical financial relationship with, the entity.
For support, NJ Transit points to a series of cases outside
the sovereign immunity context. See Biden v. Nebraska,
 600 U. S. 477 (2023) (standing); Arkansas v. Texas, 346
U. S. 368 (1953) (standing); Lebron v. National Railroad
Passenger Corporation, 513 U. S. 374 (1995) (First Amend-
ment); Osborn v. Bank of United States, 9 Wheat. 738
(1824) (intergovernmental tax immunity). As those very
cases warned, however, an entity “can count as part of the
State for some but not ‘other purposes.’ ” Nebraska, 600
U. S., at 494, n. 3 ; see Lebron, 513 U. S., at 392, 400 (hold-
ing that Amtrak is “part of the Government for purposes of
the First Amendment” but lacks the Government’s “sover-
eign immunity”); see also Priddy, 295 U. S., at 235 (“Im-
munity of corporate government agencies from suit and ju-
dicial process . . . is less readily implied than immunity
from taxation”). Accordingly, the analysis in those cases
has little bearing on the arm-of-the-State analysis here.
 Finally, 23 States contend as amici curiae that the cur-
rent use of multifactor balancing tests in the lower courts
has created significant uncertainty. To address this prob-
lem, they urge this Court to adopt a rule that a State’s own
characterization of an entity, such as New Jersey’s labeling
of NJ Transit as an “instrumentality of the State,” should
be dispositive.
 One problem with the States’ position is that it focuses on
the label a State places on an entity, rather than assessing
whether the State structured the entity as legally separate.
See supra, at 12. Another problem is that the States’ posi-
tion prioritizes one of New Jersey’s characterizations, the
term “instrumentality,” over another, “body corporate.”
There is no good reason to believe that the State intended
for NJ Transit to be part of the State itself by using the
word “instrumentality,” when it simultaneously used the
word “body corporate,” a term traditionally understood to
create a “[s]eparate legal personality.” First Nat. City
 Cite as: 607 U. S. ____ (2026) 23

 Opinion of the Court

Bank, 462 U. S., at 625 ; see Moor, 693 U. S., at 719–720
(holding that designation as “ ‘body corporate’ ” showed lack
of arm-of-the-State status even though state law deemed
counties “ ‘subdivisions of the State’ ”). The States’ pre-
ferred test that any label a State chooses is dispositive
therefore does not promote predictability in the treatment
of state-created entities because it still requires courts to
decide which state-law pronouncement is dispositive. In-
stead, what promotes consistency is adhering to a long line
of cases in which this Court has found state-created corpo-
rations that are formally liable for their own judgments not
to be arms of the States that created them.
 Of course, all States maintain the power to “structure
themselves as they wish.” Berger v. North Carolina State
Conference of the NAACP, 597 U. S. 179, 183 (2022). To the
extent New Jersey, and other States, created such corpo-
rate entities intending that they would remain part of the
State and that the State would formally assume their lia-
bilities, the States are always free to amend their laws.
 IV
 NJ Transit is not an arm of New Jersey and thus is not
entitled to share in New Jersey’s interstate sovereign im-
munity. The judgment of the New York Court of Appeals is
affirmed, the judgment of the Pennsylvania Supreme Court
is reversed, and the cases are remanded for further proceed-
ings not inconsistent with this opinion.
 It is so ordered.