Summary: GAO provided information on: (1) key changes in the federal government's relationship with states and localities over the past decade; and (2) intergovernmental partnerships.
GAO found that: (1) federalism policy changes and the growing federal deficit have caused the intergovernmental system's decentralization and states' increased role in the system; (2) federal-local relationships were reduced; (3) budgetary pressures led federal policymakers to further national objectives through nongrant strategies; (4) national regulatory trends lessened states' discretion without reducing their responsibilities; (5) Congress and federal agencies continued to use regulations to expand federal regulatory efforts aimed at reducing overall levels of intergovernmental regulation; and (6) state governments were strengthened by greater financial stability and responsibility and improved financial management and revenue systems. GAO also found that: (1) basic state and local public service inequities might be increasing; (2) divergence between state, local, and national priorities could reduce governmental effectiveness; and (3) the combination of federal fiscal and regulatory trends could adversely affect state leadership.
