2026 Federalism Scorecard

It is imperative that a state’s elected representatives maintain both visibility and authority over the commitments and unreimbursed costs that states take on when they accept a federal grant.

Requiring elected officials’ approval for federal grants ensures unelected bureaucrats are not the ones agreeing to a grant’s conditions and hidden costs.

A number of states require some form of elected-official oversight for federal grants but have exemptions for entities such as public universities, enabling them to lobby federal agencies for rules that conflict with the interests of the state’s citizens and taxpayers.

There is no guarantee that most federal grants will continue to flow to states, yet many states fail to maintain even rudimentary plans for minimizing harm and disruption in the event of a delay, reduction, or cessation of federal funds.

Federal money isn’t free; it generates unreimbursed costs, and increasingly federal agencies threaten discontinuation to compel compliance with directives that bear little connection to the stated intent of the funds. States that fully account for these costs are in a better position to judge whether accepting any particular grant is truly in the best interest of their citizens.

Federal agencies can exert substantial influence over state and local governments through guidance. Although federal guidance is not law and is not legally binding on regulated parties, state agencies often treat it as if it carries the weight of law. Worse yet, some federal guidance crosses a legal boundary from clarification of existing regulation into formulation of new rules that are not authorized by statute.

Because guidance is rarely examined by lawmakers or the public, it may lead to substantial alteration in state agency practices that contravene both law and the desires of citizens. Requiring a state agency to disclose federal guidance will shine a light on unlawful practices, enabling lawmakers to craft policies that best serve their communities

States are required to follow reporting guidelines for federal grants and have some visibility through websites such as USASpending.gov. This variable assesses individual states’ laws and practices around how they disclose receipt and expenditure of federal moneys, and in particular whether those practices yield transparency and public accessibility.

We focus on two significant State Implementation Plans (SIP): those tied to the Clean Air Act and to Medicaid administration. State agencies can change key elements of these SIPs without the agreement or knowledge of elected officials, and sometimes even with subsequent enforcement taken up by federal officials. States which require that changes to key SIPs be subjected to legislative scrutiny help guard against such secretive lawmaking.

Unelected state officials can influence federal policy in ways that circumvent the intentions of citizens as expressed through their elected representatives by spending millions lobbying federal agencies on all manner of legislation, spending, and rules governing the particulars of that spending.

The more dollars a state receives from federal agencies, the more vulnerable it is to agency demands. There are many reasons a state may receive an above-average percentage of its revenue from DC, and many of those reasons are beyond a state’s control. We incorporate this variable nonetheless, because it indicates a significant vulnerability to federal influence.