Fiscal Federalism
The national Gov.’s patterns of spending, taxation, and providing
grants to influence State and local Gov.’s
-The national Gov. uses fiscal policy to
influence the states through granting
or withholding money to pay for
programs.
(kind of like being whipped)
Fiscal Federalism
Grant-in-aid
-Money and resources provided by the Gov.
to fund specific programs or projects.
EX: building canals, public works, roads, railroads,
and land grants for colleges
Fiscal Federalism
Categorical Grants
-Grants that have a specific purpose, such as
sewage treatment facilities or school lunch programs
- May require “Matching Funds” from state or local Gov.’s
-May be in the form of project grants
(awarded on the basis of a competitive application,
such as university research grants)
- Formula Grants (such as Medicaid)
Fiscal Federalism
Block Grants
-Grants which can be used for a variety of
purposes within a broad category, such as
education, health care, or public services
-Preferred over categorical grants because there's
fewer strings attached so state and local Gov. have
more freedom in how money is spent
Fiscal Federalism
Revenue Sharing
-A “No Strings Attached” form of aid to state and
local Governments
-Proposed by the Johnson administration and
popular during the Nixon Administration
-Could be used for virtually any project but never
exceeded more than two percent of revenues
- Eliminated during the Reagan administration
Fiscal Federalism
Mandates
-Requirements which are imposed by the
National Government on the state and local Gov.
-The Americans with Disabilities Act (1990) mandates
that all public buildings be accessible to persons with disabilities.
-After the mid-term elections of 1994, the Republican-controlled
Congress passed the Unfunded Mandate Reform Act, which
imposed limitations on Congress’s ability to pass unfunded
mandate legislation