The Impact of Grants-in-Aid on State Income Maintenance Decisions.

An analysis of state government decisionmaking concerning public expenditures on public assistance. A model is developed that maximizes the collective utility of public expenditure and revenue decisions, in terms of achieving a desired income distribution. The model departs from previous analyses in that public expenditures per se are not the sole arguments of the preference function. A payment maximum variable is defined that determines who is eligible for public aid and how much aid is available. A caseload-public assistance model is presented, based on expenditure response to changes in public assistance standards. Experiments with the model indicate that a flat grant, based on state population, to states and localities would result in some tax relief and some added public expenditures, and that less than 10 percent of these funds would go to added public assistance expenditures. 123 pp. Bibliog.