The high cost of federal dependency
In the Wall Street Journal, Tony Woodlief of the Center for Practical Federalism highlights a troubling trend: in 2023, states relied on federal funds for an average of 37% of their revenue. This is twice as high as 1990.
Federal funds increasingly come with ideological strings, bureaucratic bloat, and mandates that citizens never vote on. From overnight camp policies dictated by the USDA to the growing burden of “maintenance of effort” clauses, states are entangling themselves in a financial relationship that erodes their independence and locks them into permanent spending growth. In Washington, baseline budgeting has become the norm, allowing every so-called ‘crisis’ to justify another spending binge, while states scramble to snatch up the flood of federal money.
Woodlief rightly warns: states are not only budgeting with someone else’s credit card, they have “tied their fiscal hopes to a sugar daddy who is $37 trillion in debt.”
Thankfully, there’s some good news: some states are pushing back, taking concrete steps to better police their reliance on federal dollars. Transparency laws, cost-accounting requirements, and contingency planning for the loss of federal funds are small but essential moves toward restoring self-governance and a healthier balance of power.
That kind of proactive approach signals that not only do we trust the people we live with more than Washington, but we also believe they deserve a government that lives within its means. Pausing and thinking deeply about the consequences of joining the rush towards bankruptcy is an essential first step for state governments to better serve their constituents.
— The Federalism Beat