Why do some people hate federal grants-in-aid programes?

Answer 1

Grants-in-aid are given by the federal government to state or local governments for a specific, well-defined purpose. These grants can be unpopular because they give little flexibility in how the money can be spent. Other federal aid programs, such as categorical or block grants, are allocated for a general purpose, such as education or law enforcement. A grant-in-aid must be spent for a more specific purpose, and the state or local government must meet certain requirements; if a requirement is unpopular in a state or locality, policymakers may choose to decline the money.

For example, following the passage of the 2009 Affordable Care Act (popularly known as Obamacare), states were offered large amounts of money (initially 90% of costs) to expand their Medicaid programs to cover more residents. Many states' governors chose to take the money, some refused, and at least one (Rick Scott of Florida) initially resisted before he decided that the additional money was worth the conditions imposed.

In some cases, the grants-in-aid are technically voluntary, but the states need or want the money so badly that they have to accept the conditions, such as in the case of federal highway funds, which require that a state raise its drinking age from 18 to 21.