Fiscal Federalism Initiative

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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.

Our Work

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  • Two-Thirds of Federal Grants to States Are for Medicaid

    Medicaid is by far the largest federal grant to states, accounting for 67 percent of total grant funding in 2017. The next-largest funding area is income security (temporary cash assistance, employment services, school-provided meals, and similar programs), which at 13 percent is one-fifth the size of Medicaid. Medicaid was the main driver of the 40 percent increase in total federal grants to... Read More

  • Federal Grants to States Rose About 40% Over the Last 10 Years

    Federal grants to states are about 40 percent higher overall, after adjusting for inflation, than they were in 2008,when the recession began, but that growth has not been steady. Federal stimulus aid to states resulted in a spikeduring and immediately after the recession, with total grants increasing by 56 percent in the first year after theAmerican Recovery and Reinvestment Act of 2009. By 2013,... Read More

  • Federal Spending Priorities Shifted Toward Health Over Past Decade

    States get roughly one-third of their revenue from the federal government—funding that pays for health care,schools, roads, public safety, and a range of other programs. Federal grants to states are about 40 percent higher,after adjusting for inflation, than they were in 2008 when the recession began. But federal support for this rangeof programs has varied significantly, with grants for... Read More

Media Contact

Jeremy Ratner

Director, Communications

202.540.6507