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1 1 (February 10, 2025)

handle is hein.crs/goveskq0001 and id is 1 raw text is: Congressional ~'. Research Service ~nfo rning h2 leg Jative debate since 1914 Impacts of Federal Grants and Other Funds on State and Local Budgets February 10, 2025 Together, state and local governments received more than $1 trillion in federal grants and other funds each fiscal year from FY2021 to FY2023 the most recent years for which final data is available. These funds play a role in helping these governments provide services such as education, health care, law enforcement, and public transit. This Insight explores the impacts of federal funds on state and local government budgets. How do federal grants impact state and local government budgets? Federal funds represent a significant share of state and local government revenue (see Figure 1). According to data from the U.S. Census Bureau's Annual Survey of State and Local Government Finances, the federal government sent state governments $1.112 trillion in FY2022-36.11% of total state government revenue (in some cases, portions of this funding must be passed through to local governments). That same year, states provided $662.3 billion to local govemments-28.2% of total local government revenue. (Some of this was federal funding passed through states to local governments.) The federal government sent $146.3 billion directly to local governments in FY2022, or 6.2% of total local government revenue. Congressional Research Service https://crsreports.congress.gov IN12506 CRS INSIGHT Prepared for Members and Committees of Congress - I l I ti I

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