Fiscal FederalismFiscal FederalismThe national Gov.’s patterns of spending, taxation, and providing The national Gov.’s patterns of spending, taxation, and providing grants to influence State and local Gov.’sgrants to influence State and local Gov.’s

-The national Gov. uses fiscal policy toThe national Gov. uses fiscal policy to influence the states through grantinginfluence the states through granting or withholding money to pay for or withholding money to pay for programs. programs.

(kind of like being whipped)(kind of like being whipped)

Fiscal FederalismFiscal Federalism

Grant-in-aidGrant-in-aid

-Money and resources provided by the Gov. Money and resources provided by the Gov. to fund specific programs or projects.to fund specific programs or projects.

EX: building canals, public works, roads, railroads, EX: building canals, public works, roads, railroads, and land grants for collegesand land grants for colleges

Fiscal FederalismFiscal Federalism

Categorical GrantsCategorical Grants

-Grants that have a specific purpose, such as Grants that have a specific purpose, such as sewage treatment facilities or school lunch programssewage treatment facilities or school lunch programs

- May require “Matching Funds” from state or local Gov.’s- May require “Matching Funds” from state or local Gov.’s

-May be in the form of project grantsMay be in the form of project grants (awarded on the basis of a competitive application, (awarded on the basis of a competitive application, such as university research grants)such as university research grants)

- Formula Grants (such as Medicaid)- Formula Grants (such as Medicaid)

Fiscal FederalismFiscal Federalism

Block GrantsBlock Grants

-Grants which can be used for a variety of Grants which can be used for a variety of purposes within a broad category, such as purposes within a broad category, such as education, health care, or public serviceseducation, health care, or public services

-Preferred over categorical grants because there's Preferred over categorical grants because there's fewer strings attached so state and local Gov. have fewer strings attached so state and local Gov. have more freedom in how money is spentmore freedom in how money is spent

Fiscal FederalismFiscal Federalism

Revenue SharingRevenue Sharing

-A “No Strings Attached” form of aid to state and A “No Strings Attached” form of aid to state and local Governmentslocal Governments

-Proposed by the Johnson administration and Proposed by the Johnson administration and popular during the Nixon Administrationpopular during the Nixon Administration

-Could be used for virtually any project but never Could be used for virtually any project but never exceeded more than two percent of revenuesexceeded more than two percent of revenues

- Eliminated during the Reagan administration- Eliminated during the Reagan administration

Fiscal FederalismFiscal Federalism

MandatesMandates

-Requirements which are imposed by the Requirements which are imposed by the National Government on the state and local Gov.National Government on the state and local Gov.

-The Americans with Disabilities Act (1990) mandates The Americans with Disabilities Act (1990) mandates that all public buildings be accessible to persons with disabilities.that all public buildings be accessible to persons with disabilities.

-After the mid-term elections of 1994, the Republican-controlled After the mid-term elections of 1994, the Republican-controlled Congress passed the Unfunded Mandate Reform Act, which Congress passed the Unfunded Mandate Reform Act, which imposed limitations on Congress’s ability to pass unfunded imposed limitations on Congress’s ability to pass unfunded mandate legislationmandate legislation