Politics & Government
Why Subnational Budgeting Powers Drive Fiscal Federalism Disputes
Quick fact
In many federations, subnational governments are responsible for over half of all public spending but raise less than a third of their own revenue, making them heavily dependent on central transfers—a structural imbalance that lies at the heart of fiscal federalism disputes.
Why this is interesting
You've likely heard of states arguing with the federal government over money. But why does the argument so often boil down to the power to budget? What makes the annual budget the ultimate battleground in fiscal federalism?