AP U.S. Government & Politics - Fiscal Federalism

unfunded mandates definition

A newer type of control in which the national gov't tells the states what to do, period, by setting terms that they must meet, regardless of whether they accept federal grants. Often when Congress passes legislation without enough federal funding to support it, it's deemed an unfunded mandate.

revenue sharing examples

federal gov't giving money to state gov'ts; state gov't giving money to local gov'ts, partnerships, etc.

grants-in-aid examples

land-grant colleges, research grants, Medicaid, etc.

conditions of aid examples

requiring states to match a portion of the federal funding, federal highway dollars come with regulations on structure, signage, and driving restrictions, etc.

unfunded mandates examples

school desegregation, poverty programs, environmental issues, etc.

conditions of aid definition

A traditional type of federal control that tells the state gov'ts what they have to do in order to be given grant money (the so-called 'strings' attached). The costs and benefits of the federal rules imposed can become a matter of argument between the states and the federal government (intergovernmental lobbying)

revenue sharing definition

Revenue sharing is the distribution of a portion of federal tax revenues to state and local governments. The revenue-sharing program gave a pool of federal tax collections to the states as "shared" money with virtually no restrictions. These types of grants were partially responsible for the huge federal deficits in the 1970's and 1980's. The Reagan Administration ended the revenue-sharing program in 1987

block grants cons for states

~money may be used ineffectively ~amount of money available didn't grow as fast as many hoped it would ~the number of 'strings attached' steadily increased ~grew slower than categorical grants ~too broad; special interest groups have no specific stake in them

revenue sharing cons for federal gov't

~money went to all areas, regardless of need, and thus was wasteful ~spread money out so much that to individual receivers, the cash wasn't "a matter of life and death" like in categorical grants

unfunded mandates pros for states

~no discrimination in the operation of the programs based on who paid for it ~possibility of waivers ~local citizens can use federal courts to change local practices for the better

block grants pros for federal gov't

~not held accountable for failures b/c formula based

categorical grants cons for states

~often require states to put up some of their own money ~restrictive b/c the federal gov't has more control over where the money goes ~funds can't be diverted to other areas that may also need the money ~purposes too narrow, can't be adapted to local needs

revenue sharing pros for federal gov't

~public audits were required

categorical grants pros for federal gov't

~specificity of programs gives them more control over what federal money gets spent on/put towards ~ get to choose who gets federal funds based on merit, not a formula ~can prevent a state from defunding a certain program ~supervised by special Congress committees

grants-in-aid pros for states

~states can offer services that they may not have otherwise been able to afford ~states can run the programs while the federal gov't foots the bill ~politicians can denounce high federal taxes while taking credit for gov't funded projects ~can reject regulations (but then also reject the $$, so...)

block grant cons for federal gov't

~states now hold more power ~money gets spent w/o restriction ~grants are formula based, which can be ineffective ~does not provide much oversight into how the money is spent ~Congress prefers categorical grants to address national problems

revenue sharing pros for states

~these grants were well-received by the states ~one of the underlying principles the program was that local elected officials were more effective at determining local needs ~there were public hearings on how the money would be spent ~$85 billion reached America's communities during the 14 years of the program's operation ~requires no matching funds

revenue sharing cons for states

~this 'free money' that the states could supposedly do with as they pleased was not as 'strings-free' as they would've hoped ~public audits were required

unfunded mandates cons for states

~this type of legislation often places states in the difficult position of funding completely new programs in order to continue receiving national funds for existing programs. ~vague language gives federal administrative agencies more power ~Washington provides inadequate funding ~regulatory policies make it hard for states to raise revenues, borrow funds, etc.

block grants definition

A block grant is the consolidation of several categorical or project grants into a single grant devoted to a general purpose, with fewer restrictions placed on what the money can be used for allowing the state/local gov't to choose. This type of grant is formula-based.

grants-in-aid definition

A grant-in-aid is an amount of money coming from the central government that is given to a state government, local government or individual person for the purposes of funding a specific project. This kind of funding is usually used when the government has decided that the recipient should be publicly funded but operate with reasonable independence from the state.

categorical grants definition

Categorical grants are funds targeted for specific purposes defined by federal law--roads, schools, urban development, etc.--that come with stipulations and regulations, such as requiring that states put forth money to 'match' part of the grant. This type of grant is competitive.

categorical grants examples

build an airport or college dorm, welfare payments, funding for a school lunch program can't be spent on textbooks, etc.

block grants examples

community development, energy efficiency, programs for aid to the unemployed, etc.

categorical grants pros for states

~amount of matching funds is usually small (10% or less) ~have guidance when it comes to how the money is to be spent (increased effectiveness) ~increased funding for specific programs means the programs that really need it, get it ~competitive grants encourage well-planned, exemplary projects

grants-in-aid cons for states

~b/c every state would want federal funding, it would be hard for one state to get it for something w/o every other state also getting it for the same thing ~the fair-share formulas for gov't funding favor places w/ lower populations & just spread money around ~w/ federal funding comes federal regulation

grants-in-aid pros for federal gov't

~can 'force' states to adopt/support national goals ~spend money the way Congress wants to ~increased influence for federal gov't

unfunded mandates pros for federal gov't

~can help further national goals ~allows Congress to pass the bill to the states ~10th Amendment doesn't limit unfunded mandates ~vague language gives federal administrative agencies more power

conditions of aid pros for federal gov't

~can help further national goals ~most of the original 'strings' dealt with civil rights ~Congress feels it has an obligation to create uniform national policies to prevent the misspending of federal money and to further important matters ~in the 1960s, there was a shift in politics that led to Congress favoring Washington in regards to these conditions

categorical grants cons for federal gov't

~does not always have a good idea as to how money should be used in a particular community ~communities with fewer resources may not be able to field as compelling an application for the grants as wealthier communities

block grants pros for states

~give states & cities freedom to decide how they'd spend federal funding to relieve tax burdens (less restrictive) ~'devolution' (the scaling back of the size and activities of the national government) gave states more control ~governors and mayors like block grants

grants-in-aid cons for federal gov't

~if Washington wants to give federal funding to one state, they'll inevitably end up having to give it to many states ~state & local gov'ts can reject the regulations & the money

conditions of aid pros for states

~if the state doesn't want to meet the conditions they can refuse ~compromise is possible due to the different demands faced by state and federal gov'ts ~Congress originally favored local needs in regards to these conditions

conditions of aid cons for states

~if the state refuses the conditions, then they don't get the money they need (state gov'ts depend on fed grants for ¼ of their budgets; many citizens depend on them for their livelihood) ~often have to comply with less than satisfactory conditions in order to get the money they need ~states feel national rules don't take dierse local populations into account, create inefficiencies, and require the states to pay for things they didn't want in the first place ~feel too much power is given to the federal gov't

unfunded mandates cons for federal gov't

~may create animosity from the states

conditions of aid cons for federal gov't

~may create animosity from the states ~leads to passing of the bill from one level of gov't to the other, as nobody wants to pay up