State and Local Fiscal Assistance Act

The State and Local Fiscal Assistance Act of 1972, also known as general revenue sharing, was a United States program that allocated federal tax revenue to state and local governments. This initiative, championed by President Richard Nixon and originating from economist Walter Heller, aimed to empower local officials to determine their communities' needs.12

The program operated from 1972 to 1986, distributing approximately $85 billion with minimal administrative costs. A key principle was that the federal government imposed few restrictions on how the funds could be used, though recipients were required to prevent discrimination and undergo public audits. Over its 14-year operation, the act allocated about $30 billion over five years, with one-third going to state governments and two-thirds to local governments.13