OK, I know there are lots of strong competitors for the title of worst Federal spending, but transfers to state governments is, to my mind, among the very worst (from here)
Specific problems with this spending include:
- Terrible accountability, even worse than for most of Federal spending. Feds appropriate the money but have only limited ways to enforce accountability and almost no ability to track its use
- Awful incentives, as much of this money is given as matching funds that simply encourage more spending at the state level and create, in difficult budget times, the almost impossible problem of having to cut $2 of spending to save $1 of state appropriations. Makes matching fund programs almost impossible to cut, though kudos to Wisconsin and Florida for doing the right thing with Federal matching funds for high speed rail
- Frequently used to undermine the 10th recommended. Seat belt laws and 55-mile-per-hour speed limits enforced by threats of withdrawal of Federal funds. Ditto Title IX in state schools. The Feds are like narcotics pushers, getting the states hooked early on easy money and then using their addiction to these funds in all kinds of abusive ways.