Federal Grants-In-Aid
- Categorical Grant
- Federal dollars are tied to particular programs, or categories, of spending.
- The federal government places specific conditions on how the state is to spend the money.
- Impact: Preferred by many national policymakers, because it gives them the ability to control where and how money is spent in the states.
- Block Grant
- Federal money is given to the state for a broad policy purpose, (i.e. environmental protection, crime control). It is left up to the state to define their specific need within that policy area.
- Impact: Good for state policymakers because it gives them flexibility to determine where/how money should be spent, but may be bad for state program administrators who will need to compete with other agencies and may not receive the money they feel their programs need.
- Revenue Sharing
- Federal money given to a state based on its size and need, with very few strings attached.
- Impact: Ultimate flexibility to state policymakers to determine own needs/priorities.
- Experiment in the 1970s, eventually abandoned in 1980s due to heavy budget deficits.