STATE RESPONSES TO DECLINING FEDERAL SUPPORT: BEHAVIOR IN THE POST-1978 ERA.

The 1970's mark a significant transition in American national-state fiscal relations. By 1978, federal aid for state governments and direct and indirect aid for local governments started to decline. By the mid 1980's, federal aid had declined even further. This has clear consequences for the relative role of the states as sources of tax revenue within the state-local mix. Since 1979, states have become somewhat more significant as revenue raisers among subnational governments.