Revenue Sharing and American Cities: Analysis of the Federal Experiment in Local Assistance

Abstract

Abstract General revenue sharing has been advocated in the -United States since the early 1960s as a means of assisting local governments to overcome increasingly crucial financial problems. The political environment in which the proposal was finally enacted in the State and Local Fiscal Assistance Act of 1972 enabled many groups to ascribe a wide variety of expectations and objectives to revenue sharing. The program that emerged sought to attain goals beyond those of solving local fiscal problems. Initial evaluations of general revenue sharing, however, indicate that few of the broadly stated objectives have been attained. Substantial changes in the program are needed when revenue sharing legislation comes before Congress for renewal in 1976. The following analysis of the effects of revenue sharing on American cities leads to recommendations for establishing a three-pronged system of federal aid that can more effectively create the conditions for a “new federalism.”