Should We Abandon Revenue Sharing?

Abstract

General revenue sharing was supported and initiated by a diverse group of advocates, each of whom expected it to accomplish a different goal or to meet a different need. After reviewing the specific reasons used to support the program, this article reviews revenue sharing in action. Several questionable results are then discussed, including the program's fiscal impact on state and local governments, its impact on state and local spending priorities, and its impact on governmental reform at the state and local level. The concluding section considers the possible future of general revenue sharing during the 1975 congressional session. Three congressional choices are outlined and fully discussed: (1) improving and expanding general revenue sharing; (2) abolishing it in favor of the federal government's assuming the costs and administration of various state and local expenses (welfare, for example); or (3) expanding block grants while reducing or eliminating general revenue sharing. Throughout the discussion, the importance of state and local governmental reform is stressed.