Skip to main content

May 1977

The Growing Link Between the Federal Government and State and Local Government Financing

by Nancy Jianakoplos

The growth of the state and local government sector and its increasing reliance on Federal revenues warrant consideration in discussions of stabilization policy. State and local government expenditures and taxes have been growing rapidly in recent decades, both absolutely and relative to that at the Federal level. In addition, grants-in-aid from the Federal Government have become an increasingly important source of funds for state and local governments.