National-State-Local Systems of Government and Intergovernmental Aid

The American governmental system can no longer be, and probably never should have been, described or explained as one of separate governmental levels. The interdependence of the total system can be illustrated through the intergovernmental flow of funds. The flow is primarily from the larger to the smaller jurisdictions—from national to state to local parts of the system. Within the state-local parts of the national system, each state has its own state-local sys tem of government and the nature of each system is an impor tant determinant of fiscal levels of the total system. The role of aid varies in each system and serves as a financial bridge between the assignment of fiscal and administrative responsi bility in each state-local system. All national aid and most state aid is programmatic rather than general. The result is that individual jurisdictions profit from aid to the extent that the basket of services they provide contains aided ones. This characteristic of aid, plus the political composition of the state legislatures, determines the degree to which aid performs an equalizing role among jurisdictions possessing very different fiscal strength. Over-all aid binds the total governmental sys tem of the country together and its role is likely to expand as fiscal pressures on the state-local parts of the system increase. The evidence indicates that it is on the state-local parts of the system that fiscal pressures will be greatest over the next decade.