Federal money and its strings
Washington often shapes state policy not by command but by money.
Categorical grants
Categorical grants fund specific purposes and come with detailed conditions. For example, highway funds have been tied to states setting the drinking age at 21; in South Dakota v. Dole (1987) the Supreme Court allowed this, as long as the conditions were related and not coercive.
Unfunded mandates
An unfunded mandate is a federal requirement that states must meet without receiving money to pay for it, such as some environmental or disability-access rules. States often object that these mandates strain their budgets. Congress passed a law in 1995 to make it harder to impose them.
Advantages and disadvantages
Federalism lets states act as 'laboratories of democracy', testing policies that others may copy, and allows policies to fit local preferences. It also brings more points of access for citizens. On the downside, it can produce unequal services from state to state, race-to-the-bottom competition, and confusion over who is responsible.
Flashcard
Federal funding for a specific purpose with strict conditions
Check your understanding
A state tries a new healthcare programme that other states later copy. This reflects which advantage of federalism?