Federal Grants-in-Aid: A Bulwark of State Governments

T HE grant-in-aid is probably one of the most widely used and least understood activities or devices of government today. In the past 10 or 15 years, many studies have been undertaken and many volumes have been written about grants-inaid, and yet the nature of the grant, its place in our system of government, its purpose, and its effect are little understood-and are often seriously misunderstood. Since grants have become such an important element in our governmental structure and are involved in so many important activities of government, it seems essential to develop a clearer understanding of what the grant-in-aid is and how it works. The grant-in-aid may best be regarded as a device through which the costs of government are distributed among the various “levels” of government-local, State, and nationalsomewhat differently from the way in which functions are allocated. This device has been used to some extent from the beginning of our historyin education and public roads, for example-but only in recent years has it become really important at the national level. Twenty years ago only 1W percent of State and local expenditures were covered by grants from the Federal Government. Today Federal grants cover about 9 percent of State and local expenditures. And the end is not yet. Recent legislation, together with other proposals before Congress, if enacted, would add hundreds of millions of dollars annually to the grant expenditures. In short, the grants involve so much money, and so many essential services to the people, that they are bound to be a matter of major interest, quite aside from their potential effect on our Federal system of government.