By Scott D. Pattison, National Association of State Budget Officers

With nearly one-third of total state funds coming from the federal government, states are extremely dependent on the federal government for money. This is a significant portion of state budgets and makes for some fairly major challenges for state officials. Just as important is the fact that the federal government is extremely dependent on the states to carry out federal programs and mandates. Overcoming current challenges in federalism, therefore, will help both levels ensure the goals they set for programs are being met.

Despite political gridlock and partisanship in Washington, D.C., Congress and the president recognize intellectual property as a driver of economic growth in America. Unfortunately, cybercrime is on the rise, and intellectual property is oftentimes the primary target of cyber criminals. To protect intellectual property, the White House, Congress, and state governments all are working diligently to enhance cybersecurity.

Same-sex marriage and an Affordable Care Act case heard in one Supreme Court term.  Does it get any bigger than this?  

The Court will decide whether it is constitutional for states to prohibit same-sex marriage and whether states may refuse to recognize same-sex marriages lawfully performed out of state.

While the Court refused to hear a number of cases presenting the same issues earlier in the term, these grants came as little surprise.  Between then and now the Sixth Circuit ruled that same-sex marriage bans are...

The federal government spends a lot of money in the states; it infused $3.1 trillion into states in the 2013 fiscal year. Programs include such things as Social Security and Medicaid, and salaries and wages for federal employees living and working in those states. In the 2013 fiscal year, federal spending in the states was the equivalent of about one-fifth of states’ economic activity, according to a report released in December by The Pew Charitable Trusts, “Federal Spending in the States 2004–2013.”

Andy Karellas, CSG's Director of Federal Affairs, outlines the top five issues in federal affairs policy for 2015, including unfunded mandates, pre-emption, international trade agreements, intergovernmental coordination, and the discontinuation by the U.S. Census Bureau of the Consolidated Federal Funds Report. 

As state leaders outline their strategies and goals for 2015, they are keeping a close watch on the actions of the federal government and how such policies will impact their respective state. Such federal actions – whether in the form of federal funds, congressional legislation, executive orders, and regulations – can dramatically influence the direction and overall strategy of the state. With nearly one third of state funds appropriated from the federal government, many state programs are dependent on a consistent source of funds. This close relationship between the federal government and states has grown more complex in recent years, leaving less certainty about the roles and responsibilities of each respective government.

Econ Piggy

Recently, Inc. surveyed entrepreneurs and executives from 300 fast growing companies about which issues they consider the biggest impediments to U.S. growth. The top answer? Political gridlock in Washington. Fifty-nine percent of survey respondents said political gridlock on Capitol Hill is hampering the economy’s performance. Government regulations came in second at 54 percent and health care costs were third at 50 percent (irrespective of health care reform, which was a separate category and came in at 44 percent of respondents).

Arizona’s Prop 122 – allowing the state to refuse funding for federal regulations – passed on Tuesday by the slimmest of margins, garnering 51.4 percent of the vote. The broadly defined amendment now gives the state authority to essentially nullify federal regulations and mandates by declining to dedicate state resources for enforcement.

Party polarization continues to sustain gridlock in Washington and produce state-federal tensions. States could reduce Washington’s polarized gridlock by eliminating partisan gerrymandering and reforming primary elections, but states also are more polarized along red and blue lines. Polarization contributes to coercive federalism, and states are on the defensive in their relations with the federal government. State-federal conflicts over the Affordable Care Act, the Common Core State Standards Initiative, REAL ID and other issues marked 2013–14. Many observers tout state innovation as a counterbalance to Washington’s gridlock, but many innovations are polarizing because they are produced by one-party states and thus lack bipartisan traction. The federal government also pre-empts some state innovations and nationalizes others. The U.S. Supreme Court decided eight federalism-relevant cases during its 2012–13 term and four in early 2014, with 10 to be decided as of April 2014.

This year’s Supreme Court docket includes many cases of interest to the states on controversial subjects like affirmative action and legislative prayer and more esoteric subjects like abandoned railroad rights-of-way and federal court abstention.

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