Matthews vs. Massell - restricted. Defense: The proposed...

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Econ 404 8/28/07 Matthews vs. Massell Judge: Richard Freeman Court: US District Court (Location, Date): Atlanta, March 1973 Plaintiff: Matthews challenges the way the city (Massell) is planning to use money from the revenue sharing act. Case Summary: In 1972, $4.5m in federal revenue sharing, was slated to be used to pay fireman’s salaries, and then the usual $4.5m from the cities general funds were to be left un-used. The general funds were to be given as a rebate to reduce water and sewer rates for 100,000 customers. General funds cannot be used in such a way and therefore they were slated to be misappropriated. General funds restricted, rev. sharing funds not
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Unformatted text preview: restricted. Defense: The proposed plan does not conflict with congressional intent, and that circumventing the provisions does not run counter the intent of congress. In using the rev. funds for fire-mans salaries, putting the same general funds to use in any way they see fit is OK. They also argue that it is too difficult to enforce. Verdict: The money cannot be spent by the city as water rebates because it was not the intent of the federal government for the money to be used as a non-priority expenditure. Law and Economics Notes: This is also a question of restricting money use, does this economically make sense?...
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