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Federal Funds and State Fiscal Independence

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Publication Date: May 2008

Publisher(s): Heritage Foundation (Washington, D.C.)

Author(s): Sven R. Larson

Series: Backgrounder

Topic: Government (Internal security)
Government (State or regional government)

Keywords: Budget; SCHIP; state spending; separation of powers

Type: Report

Coverage: United States


If the present trend in federal aid to states continues, federally sponsored programs will soon eclipse state budgets and turn the federal government into the single largest revenue source for states. Federal aid to states blurs lines of government accountability to voters and erodes state fiscal independence, limiting states' ability to implement innovative fiscal policies and meet state priorities effectively.