Federal Revenue Sharing History

by Publius Huldah

 

In 1972 I was a staffer for Kentucky governor Wendell H. Ford.  It was during this time when “Federal Revenue Sharing” came into being.  The idea was promoted prior to Nixon but was not implemented until his administration.  Federal dollars were distributed to the states and local governments (county and city) on a per capita basis.  Governor Ford (one of the last “southern democrats”) was convinced that federal revenue sharing would further undermine what was left of federalism.  I was one of a small group on the governor’s staff sent out to warn mayors and county judges (the chief executive at the county level in KY) not to spend federal revenue sharing dollars on continuing expense items, but to use it for capital project only because Gov. Ford anticipated in future years there would be strings attached and the FedGov would have a strangle hold.  Later, Federal Revenue Sharing gave way to block grants.

 

Federal bureaucrats have tremendous leverage over state and local government office holders with a relatively small amount of federal dollars.  In the twentieth century American voters began to measure the value of their elected officials on the basis of the amount of money / projects / programs they could deliver to their constituencies. While that had always been true to some extent, the New Deal took pork to a whole new level. 

 

At the state and local levels there is very little discretionary money.  Essentially, state and local budgets are rolled over year to year.  So, if a governor, mayor or county chair wants to have a “see what I’ve done for you” initiative, their options are few, and of those most have a visible pain component (such as a new or higher taxes).  So, federal bucks are like heroin; addictive and deadly in the long run.

 

Consider the recent budget passed by the GA legislature.  In round numbers, the legislature produced a “balanced” budget of $20 BN

 

On top of that Georgia receives approximately $12BN in federal dollars.  Since $.46 of every federal dollar is borrowed or printed out of thin air, can we really say Georgia has a balanced budget?  You see how the governor and legislators hide their complicity in driving up the national debt under the federal umbrella? 

 

Going back to the Nixon era, not only was the USA divided into administrative regions, the states were also divided into (sub) regions.  In Kentucky we had sixteen, now fourteen sub regions. 

 

Source: Publius Huldah