The American federal system has been shaken by the impact of recent traumatic events, especially the threats to homeland security and the states’ fiscal crises. These developments have produced deep seated tensions across a wide range of intergovernmental relationships. Recent trends toward coercive relations may be ameliorated by strategies fostering contingent collaboration.

The distribution of federal funds affects a wide array of organizations, individuals and activities throughout the United States economy. Data abound on the size of the overall federal government budget and on spending by federal departments and agencies. However, only one primary source shows not only the agency and program detail, but also the geographic distribution of these funds: the U.S. Bureau of the Census’ Consolidated Federal Funds Report. This article provides details and insights into the make-up and significance of these huge flows of federal funds on state and local areas.

The states’ current fiscal crisis is due not only to the country’s economic downturn but also to changes in fiscal federalism that have exposed state fiscal systems to the impacts of federal policymaking, economic developments and demographic changes to greater degrees than in the past. Essentially, the states face growing long-term contradictions between escalating spending pressures and eroding tax bases over which states have only limited control. Short-term crisis-management actions, such as cutting spending, increasing taxes, accelerating tax collections, delaying bill payments, expanding gambling and using up reserves, are damaging, stopgap tactics. Long-term solutions will require more fundamental remedial fiscal reform by both the federal government and the states.

Congressional preemption of state governments’ regulatory powers dates to 1790, but it generally did not have a major impact until 1965, when the number of preemptive statutes increased sharply. Most congressional preemptions involve commerce, the environment, finance and health. Technological developments and interest group lobbying will result in the enactment of new preemption statutes — particularly in the areas of banking, communications, finance services, insurance and taxation — unless states initiate actions producing harmonious interstate regulatory policies.

An assessment of political parties in the legislature shows an imbalance in their performance of the overlapping functions of representation on the one hand and governance on the other. In every respect but mobilizing and educating voters, legislative parties are doing an excellent job representing their constituencies. But the performance of the governance function, and especially the tasks of consensus building and institutional maintenance, is more problematic.

Many of the state constitutional developments described in recent editions of The Book of the States have continued into the 21st century. Probably the most important of these is the absence of constitutional conventions and new constitutions. Instead, constitutional change is dominated by amendments and is piecemeal rather than comprehensive. Concerns about terrorism and the threat of war will most likely make it difficult to reverse this trend. Also important is the trend away from adoption of amendments designed to limit state governments’ capacity to govern and toward reforms that are arguably designed to make government more representative and efficient.

Chapter 5 of the 2003 Book of the States contains the following articles and tables:

Chapter 1 of the 2003 Book of the States contains the following articles and tables:

This article synthesizes research findings on organizations registered to lobby state legislatures in the last 20 years. According to data collected and analyzed by the authors, the rapid growth in numbers of registered interests in the 1980s slowed by the end of the 1990s, and institutions became more dominant as a form of organizational representation.

Most states have initiated various cutback-management strategies in the past two years to deal with budget shortfalls and projected deficits. However, restructuring state agencies has emerged as the most popular approach to the current financial crisis. State agencies are likely to continue to privatize some of their programs and services as a cost-saving tool, although the rate of savings has been moderate. A growing number of states are using performance measures in their budgeting, although they are not widely used as an efficiency tool in state agencies.

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