Will U.S. cities face a knock-on fiscal crisis from the feds?

Buobe IA context · why it matters

Federal direct transfers like CDBG are significant but minimal compared to indirect transfers — Indirect transfers can impact city budgets more substantially as states allocate federal funds for local programs.
States receiving $1.1 trillion in 2022, or 36% of state revenue, could face challenges if federal funding decreases — Cities might see reduced allocations from states, leading to potential budget cuts.

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Federal money flows to cities in three flavors: direct transfers, indirect transfers, and what we call fiscal dark matter. Direct transfers are exactly what they sound like — money sent directly from the federal government to various localities.

fiscal crise cidades

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