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Terms in this set (40)

The national government's patterns of spending, taxation, and providing grants to influence state and local governments is
known today as fiscal federalism. The national government uses fiscal policy to influence the states through granting or
withholding money to pay for programs.
♦ grants-in-aid programs - money and resources provided by the federal government to the state and local
governments to be used for specific projects or programs. The earliest grants often covered public works projects such
as building canals, roads, and railroads, and land grants for state colleges.
♦ categorical grants - grants that have a specific purpose defined by law, such as sewage treatment facilities or school
lunch programs; may even require "matching funds" from the state or local governments; categorical grants may be in
the form of project grants (awarded on the basis of a competitive application, such as university research grants) or
formula grants (awarded on the basis of an established formula, such as Medicaid).
♦ block grants - general grants that can be used for a variety of purposes within a broad category, such as education,
health care, or public services; fewer strings attached so state and local governments have greater freedom in how the
money is spent; preferred by states over categorical grants.
♦ revenue sharing - proposed under the Johnson administration and popular under the Nixon administration, a "no
strings attached" form of aid to state and local governments; could be used for virtually any project but never exceeded
more than two percent of revenues; eliminated during the Reagan administration.
♦ mandates - requirements that are imposed by the national government on the state and local governments; for
example, the Americans with Disabilities Act (1990) mandates that all public buildings be accessible to persons with
disabilities. Mandates often require state or local governments to meet the requirement at their own expense (unfunded
mandates). After the mid-term elections of 1994, the Republican-controlled Congress passed the Unfunded Mandate
Reform Act, which imposed limitations on Congress's ability to pass unfunded mandate legislation.