--- title: "Revenue Sharing — APUSH Definition & Exam Guide" description: "Revenue sharing sent federal tax dollars to states with few strings attached, a Nixon-era conservative answer to Great Society liberalism in APUSH Topic 8.14." canonical: "https://fiveable.me/apush/key-terms/revenue-sharing" type: "key-term" subject: "AP US History" unit: "Unit 8" --- # Revenue Sharing — APUSH Definition & Exam Guide ## Definition Revenue sharing was a 1970s policy (formalized by the State and Local Fiscal Assistance Act of 1972) that distributed federal tax dollars directly to state and local governments with few strings attached, reflecting conservative efforts to shift power away from Washington. ## What It Is Revenue sharing means the [federal government](/apush/key-terms/federal-government "fv-autolink") collects taxes, then hands a portion of that money back to states, cities, and counties to spend largely as they choose. The signature version came under President Nixon, whose State and Local Fiscal Assistance Act of 1972 sent billions to local governments as part of his "New Federalism." The pitch was simple. Washington is good at raising money; local officials know better how to spend it. For [APUSH](/apush "fv-autolink"), revenue sharing isn't really about budget mechanics. It's evidence in the bigger story of [Topic 8.14](/apush/unit-8/society-transition/study-guide/XwxV2oK2ulyRH0YxkAZd "fv-autolink") (Society in Transition). After the Great Society expanded federal programs in the 1960s, conservatives pushed back, arguing the federal government had grown too powerful and too intrusive (KC-8.2.III.C). Revenue sharing was a concrete policy answer to that complaint, and it landed in a decade when public trust in the federal government's ability to solve social and economic problems was sliding (KC-8.2.III.E). Think of it as the federal government writing a check and stepping back, the opposite instinct from Great Society programs that came with detailed federal rules. ## Why It Matters Revenue sharing lives in [Unit 8](/apush/unit-8 "fv-autolink") (Cold War and Social Change, 1945-1980), Topic 8.14, and directly supports learning objective APUSH 8.14.A, which asks you to explain the causes and effects of continuing policy debates about the role of the federal government over time. That phrase "over time" is the giveaway. The exam loves this term because it's a marker on a long timeline of federal power, from New Deal expansion (Unit 7) to Great Society growth (early Unit 8) to the conservative turn of the 1970s and Reagan's small-government push (Unit 9). It also connects to the theme of Politics and Power (PCE). If you can place revenue sharing in that arc, you can write a continuity-and-change argument about [federalism](/apush/key-terms/federalism "fv-autolink") that spans three units. ## Connections ### Grants-in-Aid (Units 7-8) Grants-in-aid are the older model that revenue sharing reacted against. With a categorical grant, Washington gives money for a specific purpose and attaches rules. Revenue sharing flips that, handing over money with minimal conditions. Same federal dollars, opposite philosophy about who decides. ### Fiscal Federalism (Unit 8) Revenue sharing is one tool inside fiscal federalism, the broader system of how money moves between federal and state governments. If fiscal federalism is the whole toolbox, revenue sharing is the no-strings-attached wrench [Nixon](/apush/key-terms/nixon "fv-autolink") pulled out of it. ### Local Government Autonomy (Unit 8) Revenue sharing was designed to boost local autonomy. By letting mayors and governors spend federal money on their own priorities, it pushed decision-making power down the ladder, exactly what [conservatives](/apush/key-terms/conservatives "fv-autolink") skeptical of Great Society liberalism wanted (KC-8.2.III.C). ### The New Deal's Federal Expansion (Unit 7) You can't explain why revenue sharing happened without [the New Deal](/apush/unit-7/new-deal/study-guide/O8bvpnFSbBfiQMHlcl4D "fv-autolink"). FDR's programs built the expectation that Washington solves big problems, and the Great Society doubled down. Revenue sharing is the 1970s counter-move in that same long debate, which is why it makes great evidence for a change-over-time essay on federal power. ## On the AP Exam No released FRQ has used "revenue sharing" verbatim, and it's unlikely to be the star of a question on its own. Its real value is as specific evidence. In an LEQ or DBQ about debates over the role of the federal government (the exact target of APUSH 8.14.A), naming Nixon's revenue sharing as a conservative response to Great Society expansion is the kind of precise, outside-the-documents detail that earns evidence points. On multiple choice, it could appear in a stimulus about 1970s politics or New Federalism, where you'd need to recognize it as a move to decentralize power, not expand it. The skill being tested is contextualization. Place it after the Great Society, amid declining trust in government (KC-8.2.III.E), and before the Reagan Revolution. ## Revenue Sharing vs Grants-in-Aid Both involve federal money flowing to states, so they blur together easily. The difference is control. Grants-in-aid (especially categorical grants) come with federal strings, like rules about exactly how the money gets spent, which keeps power in Washington. Revenue sharing deliberately cuts most of those strings, letting state and local governments decide. On the exam, grants-in-aid signal federal power expanding; revenue sharing signals a conservative effort to shrink Washington's reach. ## Key Takeaways - Revenue sharing distributed federal tax revenue to state and local governments with few restrictions on how it could be spent. - Nixon's State and Local Fiscal Assistance Act of 1972 made revenue sharing the centerpiece of his New Federalism, which aimed to shift power from Washington back to states and localities. - Revenue sharing was a conservative response to Great Society liberalism, reflecting the 1960s-70s backlash against expanding federal power described in KC-8.2.III.C. - It fits the 1970s context of declining public trust in the federal government's ability to solve social and economic problems (KC-8.2.III.E). - Unlike grants-in-aid, which attach federal conditions, revenue sharing handed local officials the spending decisions, which is the distinction MCQs test. - Use revenue sharing as evidence in essays tracing the long debate over federal power from the New Deal through the Great Society to the conservative resurgence. ## FAQs ### What is revenue sharing in APUSH? Revenue sharing is the distribution of federal tax dollars to state and local governments with few conditions attached. In APUSH it's tied to Nixon's New Federalism and the 1972 State and Local Fiscal Assistance Act, covered in Topic 8.14. ### Did revenue sharing expand federal power? No, the opposite. Even though the money came from Washington, revenue sharing was designed to shrink federal control by letting state and local governments decide how to spend it. It was a conservative reaction against the federal expansion of the Great Society. ### How is revenue sharing different from grants-in-aid? Grants-in-aid come with federal strings, requiring states to spend the money on specific programs under federal rules. Revenue sharing removed most of those strings, giving local governments discretion. One centralizes power; the other decentralizes it. ### Why did Nixon support revenue sharing? Nixon's New Federalism argued that local officials understood local needs better than Washington bureaucrats. Revenue sharing let him answer conservative demands to limit federal power (KC-8.2.III.C) while still delivering money to cities and states. ### Is revenue sharing on the AP US History exam? It can show up as evidence or context rather than as a standalone question. It supports learning objective APUSH 8.14.A on debates over the role of the federal government, so it's most useful as specific evidence in an LEQ or DBQ about federalism in the 1960s-70s. ## Related Study Guides - [8.14 Society in Transition](/apush/unit-8/society-transition/study-guide/XwxV2oK2ulyRH0YxkAZd) ## Structured Data ```json {"@context":"https://schema.org","@graph":[{"@type":"LearningResource","@id":"https://fiveable.me/apush/key-terms/revenue-sharing#resource","name":"Revenue Sharing — APUSH Definition & Exam Guide","url":"https://fiveable.me/apush/key-terms/revenue-sharing","learningResourceType":"Concept explainer","educationalLevel":"AP / High School","about":{"@id":"https://fiveable.me/apush/key-terms/revenue-sharing#term"},"audience":{"@type":"EducationalAudience","educationalRole":"student"},"dateModified":"2026-06-11T00:48:04.539Z","isPartOf":{"@type":"Collection","name":"AP US History Key Terms","url":"https://fiveable.me/apush/key-terms"},"publisher":{"@type":"Organization","name":"Fiveable","url":"https://fiveable.me"}},{"@type":"DefinedTerm","@id":"https://fiveable.me/apush/key-terms/revenue-sharing#term","name":"Revenue Sharing","description":"Revenue sharing was a 1970s policy (formalized by the State and Local Fiscal Assistance Act of 1972) that distributed federal tax dollars directly to state and local governments with few strings attached, reflecting conservative efforts to shift power away from Washington.","url":"https://fiveable.me/apush/key-terms/revenue-sharing","inDefinedTermSet":{"@type":"DefinedTermSet","name":"AP US History Key Terms","url":"https://fiveable.me/apush/key-terms"},"educationalAlignment":[{"@type":"AlignmentObject","alignmentType":"educationalSubject","educationalFramework":"AP Course and Exam Description","targetName":"APUSH Unit 8, Topic 8.14, LO 8.14.A"},{"@type":"AlignmentObject","alignmentType":"educationalSubject","educationalFramework":"AP Course and Exam Description","targetName":"APUSH Unit 8, Topic 8.14, LO 8.14.B"}]},{"@type":"FAQPage","mainEntity":[{"@type":"Question","name":"What is revenue sharing in APUSH?","acceptedAnswer":{"@type":"Answer","text":"Revenue sharing is the distribution of federal tax dollars to state and local governments with few conditions attached. 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