General revenue sharing
Enacted in 1972, general revenue sharing added a new dimension to the intergovernmental grant system in the United States of America. Unlike traditional categorical grant programs predicated on an externality or some other efficiency-based rationale, revenue sharing addressed issues of vertical and horizontal fiscal imbalances as well as political concerns about the growing influence of the federal bureaucracy in the fiscal affairs of states and localities. Scheduled to terminate at the end of fiscal year 1986, revenue sharing nevertheless remains a viable concept in reckoning the makeup of a well-ordered intergovernmental grant system. It is with an eye toward future deliberations about such a program that this paper is written. The findings from six years of research at the Brookings Institution are drawn upon, and a review is given of the lessons learned about the role of such a program and how the design of any future revenue sharing program might be enhanced, with specific emphasis on greater equity and more effective integration of federal and state roles in addressing the causes and consequences of local-area fiscal disparities.
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