Learn more about the data featured in this report at SavingFederalism.org
Missouri’s government grows larger every year, significantly outpacing inflation, and the federal government is the primary reason. Today Missouri is more reliant on federal aid than ever before, with more than 40 cents of each dollar spent coming from federal coffers.
The federal government primarily exercises its power over state policy through what are called grants-in-aid. These grants are transfers of money from the federal government to state or local governments to fund specific projects or programs. Upon accepting the federal funds, which are not loans and do not have to be repaid, state or local governments agree to spend the funds according to guidelines established by the federal government.
For most of American history, federal grants-in-aid were rarely used, but over the past 60 years, their influence on state budgets has skyrocketed. What were once seen as state prerogatives, such as maintaining roads, educating children, and caring for the needy, are now areas where the federal government holds enormous power. It is important to note that this loss of state control comes at a real cost to state taxpayers, emphasizing the point that these federal grants are in no way “free” for Missouri.
This report analyzes the various ways Missouri’s state government receives and spends federal aid, considers the strings attached to those dollars, and discusses how those policies have shaped the spending of state tax dollars. Finally, this report discusses the broader implications of increased state reliance on the federal government and proposes reforms for righting Missouri’s financial ship for generations to come.
Click here to read the full report.
