Fiscal Federalism The national Gov.’s patterns of spending, taxation, and providing grants to influence State and local Gov.’s grants to influence State and local Gov.’s -The national Gov. uses fiscal policy to influence the states through granting influence the states through granting or withholding money to pay for or withholding money to pay for programs. programs. (kind of like being whipped)

Fiscal Federalism Grant-in-aid -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, and land grants for colleges and land grants for colleges

Fiscal Federalism Categorical Grants -Grants that have a specific purpose, such as sewage treatment facilities or school lunch programs 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, (awarded on the basis of a competitive application, such as university research grants) 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 purposes within a broad category, such as education, health care, or public services education, health care, or public services -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 spent more freedom in how money is spent

Fiscal Federalism Revenue Sharing -A “No Strings Attached” form of aid to state and local Governments local Governments -Proposed by the Johnson administration and popular during the Nixon Administration popular during the Nixon Administration -Could be used for virtually any project but never exceeded more than two percent of revenues 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. 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. 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 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 legislation mandate legislation