The federal-state relationship is in the spotlight because of enormous fiscal challenges facing all levels of government. Tight budgets and a weak recovery in the wake of the Great Recession are leading to discussions about appropriate amounts of public spending and how costs should be allocated among local, state, and national government. Federal and state policy makers require solid data and analysis to engage in a meaningful debate and truly understand how their tax and spending policies affect other levels of government.
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Although total federal dollars to states increased by $22.9 billion, or 4.5 percent, the federal share didnot increase markedly because states’ tax collections increased enough to keep the proportion relatively stable. Read More
States receive federal grants to help fund programs in areas ranging from education to transportation to healthcare. Federal grants accounted for an average of 31 percent of total state revenue in 2014, but states’ reliance onthis revenue source varies widely. At nearly 41 percent, Mississippi had the largest share of revenue from federalgrants, while North Dakota had the smallest at 17... Read More
The American tradition of arguing about taxes is as old as the republic. This helps explain why leaders of both parties propose changes to the federal tax code on a nearly continuous basis. These changes are almost always characterized as reforms and are scrutinized for their impact on taxpayers and the federal budget. What often goes unnoticed is how tax reform on the federal level can cascade... Read More