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Unformatted text preview: ing resources disparities. The new funding agreements for 2001 also provide a
funding framework for the federated states for the next ten years.
In Spain, the autonomous communities are funded on the basis of the laws of the central Parliament that implement, at
the legislative level, the multilateral and bilateral agreements between governments. The one for July 2001, which stems
from a unanimous agreement of the autonomous communities and the central government, sets out the funding system
of the common regime ACs for a five-year period (2002-2006). These agreements increase the autonomous fiscal
resources of the ACs, stipulate transfers whose amounts depend on the scope of the jurisdictions of the communities
concerned, indexation of the amounts and revenue guarantee mechanisms. The closest thing to equalization in Spain is
the Inter-regional Compensation Fund. Its funds are subject to conditions and are distributed according to criteria that
In the United States, the legislative budget process of Congress governs the determination of transfers. Various lobbies
also have input into the process. Many federal transfer programs are based on formula grants that, in virtually every
case, take account of an indicator of need or of financial capacity to generate revenue. Per capita income is often one of
these indicators, as in the case of the Medicaid program. In fact, federal assistance is not provided solely according to
needs. Amounts actually paid under certain specific shared-cost transfer programs also depend on the state’s ability to
pay. Transfer funding often depends on a multi-year budgetary authorization. For instance, in the case of the TANF,
funding is based on an authorization lasting five years.
Lastly, in Switzerland, the rules regarding recourse to a referendum to contest federal laws limit the leeway of the
Confederation and increase the influence of the cantons. Transfer flows are calculated using a number of distribution
formulas for specific transfers and shared taxes (ten formulas in all). The formulas, or certain specific components of the
formulas, have changed over time: they have undergone no less than 68 changes since 1959 to satisfy, in view of the
Swiss political process, the demands and pressures of the cantons. 19
20 These calculations are available on the Internet.
If a state receives, as its share of GST receipts, a smaller amount than what it would have received had the reform not been implemented, the federal
government pays it an amount to make up the difference. According to David Collins, the proceeds of the GST should increase such that, in 20062007, each state’s share of the GST will exceed the revenue it would have obtained without the reform. 11 Commission on Fiscal Imbalance 4. CONCLUSION In spite of the risks inherent in a comparison of federations, some conclusions can be drawn from reading the texts
submitted for the symposium. First, many indicators suggest that federated states or regional administrations, as the
case may be, currently play a stable or growing role in the countries of our sample. Some countries are...
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