New Dimensions in Intergovernmental Fiscal Relations in the United States : Alternatives to the Current Federal Role and Strategy

Abstract

The year 1972 may mark the beginning of new era in intergovernmental relations with the establishment of general revenue sharing system. Funds made available for sharing Federal Revenue are still relatively limitied, for the State and Local Assistance Act of 1972(P.L. 92-512) allocates $5.3 billion is first year outlay of a $ 30.2 billion five year program. However, its implications are enormous. Some people already talk about the possibility of phasing out most the categorical grant programs, while others feel that they can be converted into either special revenue sharing or block grants. Within the new few years we shall, also, witness not only the expanded general revenue sharing system (in terms of money) but also its evolution as a permanent feature of "new" federalism. In any case, the Federal Government will manage directly only a limited number of categorical grant programs and the rest will be given to the States and localities in a form which they presumably will find most useful. On the other hand, the opposition has been building its case against the president's so-called "New Federalisms." It consists of many vocal critics in the 93rd Congress, interest groups which will be adversely affected by the President's programs, and those individuals-largely the poor-who feel that the Federal Governement is abandoning them and hence putting them into the hands of the States and local power structures that have not been responsive to their needs in the past.