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.