Lecture 3-3

Fiscal Relationships

• Categorical grants are transfers of cash from the national government to state or local governments for some specific purpose

• Block grants are transfers of cash from the national to state and local governments that allow the recipients grater discretion in their use

Fiscal Relationships

• Revenue sharing, which expired in 1986, consisted of transfers of cash from the national to state and local governments which in turn could use the money for almost any purpose

Conditions of Aid - etc

• “Mandates”

• Matching Funds

Political Relationships

• Interactions by officials at all levels

• Regional competition for national resources

• Intergovernmental Lobbying

Problems and Implications of federalism

• “States Rights” often used as an excuse for discriminatory practices

• Multiple points of access allow citizens more opportunities to influence governmental policy

Tensions in the Federal System

• Current tensions in the federal system arise over the effort by the national government to transfer the financial responsibility for many function back to the states

• Changing Purpose of Federal Grants to state and local governments

• Changing preferences of citizens as the who provides services

Balance of Power

• 1930’s – 1960’s Growth of Federal Power

• 1980’s Regan's “New Federalism”

• Comparative – UK “Devolution”