prompt suggestions that State budget cycles be rephased to help overcome some of the difficulties.

In the 29 States which still budget on a biennial basis, the problem, of course, is further aggravated by the added 12-month delay. Legislators in these States cannot anticipate the new programs, nor forecast the amount of Federal funds that will be available during the second fiscal year.

Legislatures that meet only biennially then are usually faced with all the new Federal grant legislation enacted by two sessions of Congress. Major Federal and State executive actions may also require consideration. The accumulation of nearly two years' production of Federal programs seems to demand more than biennial attention by State legislatures, most of which are not staffed to keep track of developments between sessions.

Summary.--In a 1963 report, the Committee on Organization of Legislative Services of the National Legislative Conference had much to say about the legislature's budget review and fiscal analysis functions. The Committee's recommendations may be briefly summarized as follows:138/

Budget Review and Analysis

1.

Each State should provide adequate staff to make effective
the legislature's control over the appropriating process.

2. Legislative fiscal responsibility should be a continuing
function.

3.

4.

The legislature has an obligation to make its intent unmis-
takably clear with respect to the appropriation act.

Each bill which would affect income or appropriations should
be accompanied by an estimate of its fiscal impact. These
estimates should be reviewed by the legislative budget review
agency.

5. Legislative budget review staff should have access to State
departments for the purpose of ascertaining their budget
requirements.

Post Audit

1.

Post audit of State fiscal operations should be organized and
controlled so that the legislature will obtain information of
the kind and at the times that it or its audit committee spec-
ifies.

2. The post auditor should be made subject to legislative control
and supervision.

3. The legislature should establish a continuing joint audit com-
mittee to specify the scope and types of audits desired as
guides to the post auditor, and to receive and act upon the
post-audit reports.

The earlier analysis suggests that about half of the States now utilize at least a majority of these seven elements of good legislative fiscal control. Perhaps the most important element in the State legislative process, however, is the continuity of legislative attention to State affairs generally and grant-inaid matters specifically. The degree of continuity varies greatly among the States--as we have seen. Only eight have annual regular sessions of unlimited duration, in short, have the same authority as Congress in this area. Thirteen others have annual regular or budget sessions, but are restricted in length. The remaining 29 legislatures still meet biennially, with 20 having varying limitations.

As was noted earlier, State administrative heads are fully aware of the legislatures' ultimate control over their finances and program authority, but many resent it and this in itself indicates the need for more careful exercise of legislative responsibility in the fiscal, oversight, and law-making processes. Continuity may not be crucial to remind State agency heads of the legislature's role, but it is critical to the effective performance of its overall policymaking function and its new, expanding role with reference to grants-in-aid.

The Impact of Federal Grant Programs Upon

Local Government

Local governments in the United States receive Federal grant assistance --sometimes directly supplemented by State aid--under a wide and often bewildering range of different programs and authorizations with varying provisions and requirements. They qualify as direct recipients of aid under at least 68 of the 379 separate Federal grant programs (available January 1, 1967). In 12 of these programs the local governments are the only eligible recipients, in the other 56 public and private institutions and individuals also qualify.

Local governments may also receive Federal assistance under some of the 311 other programs, depending upon patterns of functional responsibilities and on provisions of State plans and legislation. For example, in those States where local governments have highway and welfare responsibilities, they may receive Federal aid funds through the State. Urban planning assistance for communities of under 50,000, while administered and allocated by a State agency and not directly available to local governments, can be used only for assistance to local governments. Aid available under the Hill-Burton hospital construction program, on the other hand, depends on the provisions of the required State plan and may go directly to local governments via an application approved by a State agency or indirectly through allocation by the State. The circumstances under which Federal aid to the States is, in turn, transferred to localities clearly vary considerably from program to program.

All grants for which local governments are directly eligible are project grants. One consequence of the separate project grant approach has been to produce strong competition among the local jurisdictions for Federal grant assistance. Such competition can be healthy, of course, and stimulate a high level of performance. On the other hand, it can foster "grantsmanship" and place a premium on large and specialized staffs knowledgeable in the techniques of obtaining grant assistance--a capability which may not necessarily have a direct correlation with the need for the assistance and which medium-sized and small jurisdictions frequently have difficulty meeting.

State involvement in the administration of Federal grant assistance to local governments arises primarily in three ways: (1) State authorizing or facilitating action may be necessary for local participation; (2) the State may be directly involved in administering the grant program; and (3) States may provide a share of the required non-Federal matching funds. All of these relationships are of vital and continuing concern to local governmental officials. Some indication of their views on these relationships and other grant-related topics was provided in the earlier summary of surveys of State and local officials.

State authorization and facilitation.--Local governments derive their authority to participate in the Federal grant-in-aid programs from the State. The source of such authority can be either constitutional or statutory. As a general matter for conventional urban functions, the basic legal instrument which establishes municipalities and towns provides adequate authority for participation in grant programs, especially in those States where either constitutional or statutory home rule powers are available.

The extent of participatory authority varies considerably according to different types of local governments. Jurisdictions with only limited urban powers may not be able to participate in urban programs without additional specific action by the legislature. This is true for counties in a considerable, but decreasing number of States. Generally, however, for conventional functions within the normal range of responsibilities of local governments, additional specific authorization is not usually needed.

Yet two problems remain: first, specific authorizations may be required for new programs and there are jurisdictions, such as rural counties, not customarily empowered to undertake service programs even of a more traditional nature; second, existing State laws and regulations may present impediments to local participation.

State-authorizing legislation for participation of local governments in urban renewal programs illustrates the problem where other than traditional urban functions are involved. Although the urban renewal program was originally established in 1949, it was not until 1957 that as many as three-fourths of the States authorized local governments to participate. At the present time only two States (Louisiana and South Carolina) do not authorize participation by their local governments in Federal grants for urban renewal.* Yet, in a number of cases the authorization does not extend to all types of local governments nor for all of the purposes encompassed under the low-rent public housing and urban renewal pro

grams.

Those programs which primarily serve to bring together a number of existing functions for a coordinated attack on a major problem can present special difficulties in those States with limited local authority dependent upon legislative action. At the 1967 "Creative Federalism" hearings one Mayor testified: ". . . We are forced, as are other local officials, to present legislation every time we need authority to undertake a new program. For example, I have had to file a bill which would permit us to qualify for the model cities program. 139/

*

Florida and Maryland authorize urban renewal activity by special separate acts for each jurisdiction. However, such authorization has been widespread in each State.