Oct 7 – Gov – Fiscal Federalism

Agenda:• Quick-Write• Fiscal Federalism• The Morrill Act

Homework:• Chapter 8.1 and 8.2• Chapter 8 Study Guide

• Take out:• Pen/Pencil• Notebook• Case Studies (and handout)

How is this image analogous to Fiscal Federalism? Explain each part

Theories of Federalism

• Dual Federalism• Up to approx 1937• State and national gov’ts

reigned supreme in their own spheres

• Layered—like a cake—each were distinct

• Cooperative (Marble Cake) Federalism• Post 1937• Mingling of responsibilities• Sharing power • Suggests that fed power needs

to broadly interpreted

• Which do Centralists favor? Decentralists?

Rise of Cooperative Federalism

Emphasis on C. F. – 1933-1968• National expansion • More control of business • Liberal application of interstate commerce clause

Grants-in-aid • Explosion in national funds to states and cities (rebuilding

America)• First New Deal • Second New Deal

The “General Welfare”• What do Cases B (Dole), C (Great Society) and G (Social

Security) have in common?

• The power to tax and spend for the “common defense and the general welfare.”

• How can the Federal Government use this power?

Grants-in-aid• Why would the government give a grant to a state? What

in it for them?

• Fiscal policy can be used to directly and indirectly influence state and local government laws and programs

• Grants: Money and resources provided to the states for specific programs and projects

Categorical Grants• Grants have a specific purpose• May require “matching funds”

• Project Grants: Awarded based on competitive applications for specific needs (projects)

• Formula Grants: Specifically distributed according to a formula, based on need• Medicaid, public housing, sewage treatment, etc.

Block Grants• MUCH more popular than Categorical

• Resources can be used for a variety of purposes within a broad category• Education, health care, public services

• Fewer strings attached (but still some)

Johnson’s Great Society

Consider the content of the “Great Society” laws:• Medicare and Medicaid• The Elementary and Secondary Education Act • An Omnibus Housing Act • The National Endowment for the Arts and Humanities • The Voting Rights Act • Air and Water Quality Acts • Heightened safety standards

• What sort of grants-in-aid would the Johnson administration prefer to provide?

Revenue Sharing• AKA: General Purpose Grants

• Proposed by Johnson administration, passed by Nixon… eliminated by Reagan

• “No strings attached” form of aid

• Could be used for virtually any project

• Could not exceed 2% of state revenues (only limit)

Mandates• Which of those laws passed under Johnson could be considered

mandates? What are other mandates that you know of?

• Medicare and Medicaid, Clean Air Act, Clean Water Act. The Elementary and Secondary Education Act, Omnibus Housing Act, The Voting Rights Act

• Americans with Disabilities Act, National Healthcare Act (Obamacare)

• A federal order imposed on states with the purpose of meeting goals of the federal government.

• These started becoming unfunded mandates… when did this trend end?

The Americans with Disabilities Act of 1990 (ADA)

• (a) General rule

• No covered entity (an employer, employment agency, labor organization, or joint labor-management committee) shall discriminate against a qualified individual with a disability because of the disability of such individual in regard to job application procedures, the hiring, advancement, or discharge of employees, employee compensation, job training, and other terms, conditions, and privileges of employment.

Breaking Down Grants• Your parents give you $100 and say…

• “Have Fun!!”• General Purpose Grant (Revenue Sharing)

• “Buy School Supplies” (Anything therein)• Block Grant

• “Buy a TI-83 Calculator”• Categorical Grant

As you read the Morrill Act…• What do the STATES gain?• What does the FEDERAL GOVERNMENT gain?• What do the state HAVE TO DO?• How is it beneficial for both parties (state and fed)? • What TYPE of grant is it?