The Impact of Revenue Sharing on Local Government

• Date: 01 January 1974
• DOI: 10.1177/027507407400800109
• Published date: 01 January 1974
• Author: J. Neil Nielsen
• Subject Matter: Articles

67

Another

national

policy

which

revenue

sharing

may

implement

in-

volves

employee

political

activity,

since

the

Hatch

Act

could

apply

to

any

local

unit

receiving

revenue

sharing.

The

issue

is

whether

monies

are

grants

or

&dquo;entitlements&dquo;.

If

they

are

grants,

as

the

Civil

Service

Commission

argues,

they

apply.

This

would

certainly

set

a

national

standard

across

the

nation.

Finally,

revenue

sharing

must

be

enacted

by

Congress

periodically.

It

is

not

unlikely

that

these

will

be

annual

appropriations,

and

cities

and

states

will

wait,

hat

in

hand,

as

every

federal

agency

waits,

for

Congres-

sional

action.

Budgetary

decisions

will

await

national

action,

perhaps

well

into

the

fiscal

year.

This

is

neither

a

cheerful

thought

nor

a

decentralizing

tendency.

Revenue

sharing

may

replace

specific

federal

restrictions,

(through

categorical

aids

to

larger

cities),

with

restrictions

based

on

generalized

national

policy

(discrimination,

Hatch

Act)

which

apply

to

all

state

and

local

units.

These

national

policies

may

be

highly

desirable

(I

think

so)

>

but

that

does

not

make

revenue

sharing

a

&dquo;decentralizing

force&dquo;.

It

must

be

justified

on

other

grounds.

The

Impact

of

Revenue

Sharing

on

Local

Government

J.

NEIL

NIELSEN

City

Manager,

Mexico,

Missouri

During

the

months

prior

to

passage

of

the

State

and

Local

Fiscal

Assistance

Act

of

1972,

many

objectives

were

subscribed

to

General

Reve-

nue

Sharing.

These

objectives

ranged

from

more

efficient,

responsive

government

to

revitalization

of

the

Federal

System.

The

objectives

of

the

Act

that

continued

to

be

heard

during

the

legislative

consideration

revolved

around

the

following:

(a)

Financial

relief

for

state

and

local

governments

to

help

pay

for

public

services.

The

idea

was

sharing

the

growing

revenue

of

the

Federal

Government

with

the

states

and

cities;

(b)

Increase

the

revenue

efforts

of

states

and

localities.

The

formula

should

reward

states

and

local

governments

who

were

making

effective

tax

efforts;

(c)

Assist-

ance

to

financially

troubled

cities;

and

(d)

Greater

flexibility

for

solving

state

and

local

problems.

Underlying

these

objectives

has

been

the

premise,

and

I

believe

correctly

so,

that

states

and

localities

have

not

had

the

fiscal

capacity

to

meet

the

growing

needs

of

their

governments

without

direct

Federal

assist-

ance

and

incentives

for

needed

changes.