The Role of Federal Budget and Trust Fund Institutions in Measuring the Effect of Federal Highway Grants on State and Local Government Highway Expenditure

Federal highway financing institutions affect the response of state and local government spending to federal highway aid. Most previous studies of the spending effects of federal highway grants consider federal highway expenditure as the highway grant variable, disregarding the reimbursement nature of this expenditure and the multiyear availability of highway aid. This article argues that obligations of federal highway aid to states rather than actual federal expenditure should be used in models assessing the spending effects of federal highway grants. Considering federal obligations rather than expenditure results in a greater effect of highway grants on spending than reported in previous studies.     

Political Economy of Grant Allocations: The Case of Federal Highway Demonstration Grants

This article examines the political economy of U.S. federalhighway demonstration grant allocations. Demonstration grantsare a rapidly growing segment of federal highway grants directlyearmarked for a congressional district by Congress, unlike themajority of highway grants where Congress determines a formulaand allocates funds accordingly to states. Our empirical analysis,considering the period 1983–2003, suggests that a state'sability to attract demonstration project grants is positivelyinfluenced by its contributions to the highway trust fund andpolitical variables, and it is not affected by the formula highwayaid and vehicle miles traveled in a state.     

Federal Highway Assistance Funds in the State Infrastructure Bank Programs: Mechanisms,Merits, and Modifications

In response to the declining financial resources for state transportation infrastructures, the National Highway System Designation Act of 1995 (P. L. 104–159) authorized the establishment of the State Infrastructure Bank (SIB) Pilot Programs. This paper shows how the federal assistance funds deposited into the SIB equity fund can maximize state highway resources through a simulation. From 1998 to 2003, one dollar of the federal funds augmented state highway expenditures by 5.24 dollars in a specific year in contrast to the original intention of perpetuating state highway spending. This study further suggests ways to modify and improve the current SIB mechanism.     

Mini-Symposium: The Federal Executive Budget

James Edwin Kee, Introduction
Bernard Pitsvada, The Executive Budget: An Idea Whose Time Has Passed
Naomi Caiden, Comments
Louise Fisher, Comments
Lance T. LeLoup, Comments     

Targeting Federal Grants: The Community Development Experience, 1950-1986

This article examines the degree to which federal communityand economic development programs target federal assistanceto the nation's neediest communities. Grant allocations to citieswith populations of 50,000 or more were examined for six majorfederal urban programs during 1950–1986. Federal programsthat include both needs-based eligibility and allocational featureswere found to achieve the highest levels of targeting. The analysisfurther shows that while urban conditions in the nation's mostdistressed cities continued to deteriorate during the 1980sin both relative and absolute terms, grant allocations underthe major federal urban program, Community Development BlockGrants, have not responded to the changing incidence of urbanhardship.     

Intergovernmental Management: Federal Changes, State Responses, and New State Initiatives

This article surveys state responses and new state initiativesin 1983 to three sets of successive federal changes in domesticpolicy. Collectively referred to as the New Federalism, thesechanges include the block grants and accompanying regulatoryreforms of 1981, the changes in Medicaid reimbursement policyof 1982, and the job training and development programs of late1982 and early 1983. Following a brief overview of these changesin intergovernmental management perspective, state responsesin 1983 are examined in three areas—policy development,policy and program management, and service delivery management.     

Federal Grants and Local Capital Improvements: The Impact of Reagan Budgets

Changes in intergovernmental grants for local capital improvements during the Reagan Administration are explored from a national perspective and from the experiences of two mid-sized communities, Tulsa, Oklahoma and Toledo, Ohio. Nationally, a roller coaster pattern was identified with a strong down-turn in the most recent data and a notable shift from redevelopment to expansion/development grants such as highway and airport construction. Locally, the first dilemma is that the change in the mix of grants available is having a greater impact on the older Toledo than the newer Tulsa because their capital needs vary. Yet as federal grants declined, both cities responded affirmatively by raising new local revenues for capital improvements. The second dilemma is that the differences in their wealth and needs make revenue enhancement more difficult for Toledo than Tulsa.     

Performance Funding in Federal Agencies: A Case Study of a Federal Job Training Program

Our case study highlights important details that enter into developing performance contingent budgeting schemes—details that do not emerge in more general discussions of the subject—and shows how the handling of these details can be crucial to these schemes' success. We study a federal job training program that gives state and local decision makers discretion over the program's operation, but through performance funding holds them accountable for achieving specific objectives. We find that states' modifications to the scheme's construction produced over time highly individualized performance funding schemes that likely varied in their effectiveness.     

Federal Agency Budget Officers: Who Needs Them?

This article examines the role of federal agency budget officers and their responsibilities from the author's own perspective and experience. The article suggests that it is inadequate to standardize the role of an agency budget oficer other than that used by the agency head to determine if he or she is satisfied with the budget processes in the agency.     

Goal Conflict and Fund Diversion in Federal Grants to the States

Researchers using fiscal choice models have had limited success predicting fund diversion in federal grant programs. The application of a principal-agent framework to questions of fiscal federalism offered a potentially valuable alternative approach, but the traditional model employed by Chubb (1985) neglected potential variability in the degree of goal conflict between principals and agents. This article proposes an expanded framework, which incorporates the possibility of variation in goal conflict between participants in intergovernmental aid programs. The theory suggests that the level of policy congruence between recipient jurisdictions and the national government will determine the amount of grant funding diverted away from targeted policy areas. Findings from analyses of grant programs in two distinct policy areas support the hypothesis that grant effectiveness is partially a function of goal congruence. The relationship between intergovernmental partners is interactive, with the degree of policy agreement determining fund diversion in subnational jurisdictions, as well as the effectiveness of federal oversight activities. The findings have important theoretical implications for understanding both fiscal federalism and principal-agent relationships more generally.     

Voters AS A Hard Budget Constraint: On the Determination of Intergovernmental Grants

Recent empirical literature has shown that the determination of intergovernmental grants is highly influenced by the political bargaining power of the recipient states. In these models federal politicians are assumed to buy the support of state voters, state politicians and state interest groups by providing grants. In this paper we provide evidence that the fiscal referendum reduces the reliance of states on matching grants received from the central government and thus the possibility of interest groups and state bureaucrats to obtain more grants. If referendums are available, voters serve as a hard budget constraint.     

Perceptions on Federal Budget Reforms: Public Budgeting Researchers' View

This study examines budget experts' perceptions on suggested federal budget reforms. Based on the response of a group of selected public budgeting professors (N = 46), the study identifies several specific reforms that are supported by the experts from both the viability and adoptability consideration. The study also reveals the fact that the respondents are less optimistic about the adoptability of the suggested reforms even though they generally agree with most of the reforms. Addressing the federal deficit problem, the authors further discuss the implication of the experts' perceptions on federal budget reforms.     

State Corporate and Federal Securities Law: Dual Regulation in a Federal System

Corporate law in the United States involves dual regulation.Although state and federal corporate law typically functionwithout mutual interference, the last thirty years have revealedpotential conflicts, chiefly in two situations. One involvescivil remedies for investors under federal securities statutes;the other is state anti-takeover regulation and its relationshipto the federal Williams Act. The postwar years until 1975 sawperhaps too much reliance on the federal component of corporateregulation. Since 1975, there has been a renaissance of statelaw. Recently, however, appreciation for state regulatory authoritymay have degenerated into hostility to the will of Congress.The authors argue that the core interpretive task in federalsecurities law is preservation of both regimes to maximum effect,because the Congress has expressly declared that state authorityshould continue adjacent to federal regulation.     

U.S. State Budget Directors: Characteristics, Experience, and Attitudes

Much literature exists on state government budgeting, but until now, none existed on state budget directors. This article reports on a survey of these individuals. Their ages, genders, race, education, and work experience are reported. Their work week is discussed in terms of number of hours worked and interactions with their staff, the governor, and the legislature. Attitudes about the job and about their personal lives as related to their jobs are discussed. Their plans for when they leave office are considered. The characteristics and attitudes of the directors are compared with data about their respective states in search of possible linkages.