State Aids for Public Schools and Metropolitan Finance.

State payments to local governments in the United States amounted to $21.9 billion in fiscal 1968. This sum was up $5.1 billion, or 50.4 per cent above the 1966 total and $10.1 billion,, or 83.9 per cent above the 1963 total. The 1968 state payments to local governments in the aggregate constituted 36.3 per cent of the states' general expenditures. Of the total payments, transfers for educational purposes comprised by far the largest item, accounting for 60.5 per cent in that year. The educational transfers have increased steadily in recent years, from $8.4 billion in 1965 to $13 billion in 1968. Considering its magnitude and the rapid growth, the effect of state transfers on the fiscal structures of local governments has not received adequate attention by researchers. This paper analyzes the manner in which state's educational transfers affect the fiscal balance of municipalities in a metropolitan area. Its study is thus specific with regard to function (education) and area (metropolitan). An in-depth study requires a specific area as the object of analysis. Milwaukee metropolitan area, in Wisconsin, has been chosen for this article, taking into account the availability of excellent sources of information.