Intergovernmental fiscal relations in the 1980s

This article examines changes in fiscal federalism during the 1980s, with an eye toward how subnational governments coped with those changes. President Reagan sought to reorder federal and state relations through massive tax and spending cuts, grant program restructuring, and an exchange of select federal and state programs. As federal aid to subnational governments leveled off, localities were particularly affected and forged their own fiscal independence. State responses varied widely, depending on the economic vitality and political culture of particular states, although a common element was an attempt to target aid to financially distressed jurisdictions. By the end of the decade, self-reliance characterized federal-state-local relations.