This article reviews and assesses the changing roles and relations between the federal, state, and local governments. Specifically, we focus on intergovernmental aid, the flow of funds from the federal government to states and localities and from states to local governments. The article highlights major trends in intergovernmental finances and relationships in the past thirty years and concludes with views on prospects for the future.
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References
1.
1. U.S. Advisory Commission on Intergovernmental Relations, Significant Features of Fiscal Federalism, 1989 ed. (Washington, DC: Advisory Commission on Intergovernmental Relations, 1989), 2:3.
2.
2. Various agencies compile and analyze public finance data. For Figure 1, we use national income product account data from the Bureau of Economic Analysis because we can easily compute own-source expenditures from this source and because the agency publishes these data on a calendar-year basis.
3.
3. Deil S. Wright, “Intergovernmental Relations: An Analytical Overview,”The Annals of the American Academy of Political and Social Science, 416:10 (Nov. 1974).
4.
4. David B. Walker, “The States and the System: Changes and Choices,”Intergovernmental Perspective, 6:6 (Fall 1980).
5.
5. G. Ross Stephens, “State Centralization and the Erosion of Local Autonomy,”Journal of Politics, 36:44-76 (Feb. 1974).
6.
See also Martha Derthick, “American Federalism: Madison's Middle Ground in the 1980s,”Public Administration Review, 7:72 (Jan.-Feb. 1987).
7.
7. Carl W. Stenberg, “Federalism in Transition: 1959-79,”Intergovernmental Perspective, 6:6 (Winter 1980).
8.
For another recent history of grants, see U.S. Congress, House, Committee on the District of Columbia, Changing the Course: Federal Grants-in-Aid Funding, 1964-83, 99th Cong., 2d sess., committee print (Washington, DC: Government Printing Office, 1986), chaps. 1-6.
9.
9. Stenberg, “Federalism in Transition,” p. 6.
10.
10. Ibid., p. 4.
11.
11. John Shannon, “The Return of Fend-for-Your-self Federalism: The Reagan Mark,”Intergovernmental Perspective, 13:36 (Summer-Fall, 1987).
12.
12. Albert O. Hirschman, Shifting Involvements: Private Interests and Public Action (Princeton, NJ: Princeton University Press, 1982).
13.
See also Joseph F. Zimmerman, “Federal Preemption of States and Local Government Activities,”Seton Hall Legislative Journal, 13:25-51 (1989).
14.
14. The CETA public service employment program had become very unpopular and probably would have been cut anyway. For an account of the cuts under the 1981 federal budget act, see John W. Ellwood, ed., Reductions in U.S. Domestic Spending: How They Affect State and Local Governments (New Brunswick, NJ: Transaction Books, 1982).
15.
15. John C. Weicher, “The Domestic Budget after Gramm-Rudman—and after Reagan,” in Deficits, Taxes, and Economic Adjustments, ed. Phillip Cagan (Washington, DC: American Enterprise Institute, 1987), pp. 243-273.
16.
See also Lillian Rymarowicz and Dennis Zimmerman, “Federal Aid to Local Governments: 1980 Retrenchment,”Congressional Research Service Review, 9:17-19 (Nov.-Dec. 1988).
17.
For a discussion on other problems with interpreting aggregate state aid figures, see Gold'sState and Local Fiscal Relations in the Early 1980s (Washington, DC: Urban Institute Press, 1983), pp. 5-7.
18.
18. Gold, State and Local Fiscal Relations, pp. 2-3.
19.
19. Steven D. Gold, “Developments in State Finances, 1983 to 1986,”Public Budgeting and Finance, 7:8 (Spring 1987).
20.
20. Steven D. Gold, “State Finances in the New Era of Fiscal Federalism,” in The Changing Face of Fiscal Federalism, ed. Thomas Swartz (Armonk, NY: M. E. Sharpe, forthcoming).
21.
21. Advisory Commission on Intergovernmental Relations, Significant Features of Fiscal Federalism, 1989 ed., 2:14.
22.
22. “States at Risk as Expenditures Rise, Reserves Decline,”Governors'Weekly Bulletin, 7 Apr. 1989, pp. 1-2.
