In recent years, two pronounced tendencies have been manifest in the relation of the states to the local governments. One has been increased state aid for the support of functions which have hitherto been recognized as local functions, particularly roads and schools. These enlarged state grants have been made partly to relieve the burden of local taxation, partly in recognition of a larger responsibility on the part of the state, and partly to stimulate a higher quality of service. In order to insure the realization of the last-mentioned purpose, the aid has usually been conditioned on the fulfillment of certain minimum requirements.

The second tendency has been for the state to assume closer supervision over the finances of local government. This greater solicitude on the part of the state in respect to local finances has sprung from a number of reasons, two of which are the tremendous increase in the size of local funds since the beginning of the road-building era and the frequent misuse of the debt-incurring privilege.