Budget & Tax

Michael Carnuccio | June 11, 2015

Free Market Friday: There is no free lunch

Michael Carnuccio

An important piece of legislation this year, House Bill 1748, required Oklahoma state agencies to publicly report the amount of federal funding they receive and the strings attached to that money.
The bill passed the House (with a vote of 69-19) and the Senate (39-1). Disappointingly, it was vetoed by Gov. Mary Fallin.
Oklahoma lawmakers often have no input – or, worse yet, are completely unaware – when a state agency expands an existing program or creates a new one by entering into an agreement to accept federal funds in a “cost-sharing” arrangement.
Some state agencies even have employees whose job is to look for these federal funds in grants that their agency might qualify for. These federal grant offerings come with promises of some level of funding – but they often require the state to match some of those funds.
However, if the state agency can find those matching funds in a fee or in one of their revolving fund accounts, not even our elected state lawmakers have any input into whether the agency applies.
Some of these grants have indefinite life spans. The decisions of today may well become the burdens of tomorrow for our children and grandchildren.
State agency bureaucrats may not see any problem with acquiring “free money” from Uncle Sugar. But we all know there is no such thing as “free money” – especially from an uncle who is $18 trillion in debt. These federal grants always come with strings attached, and the cost of these strings may outweigh the value of the money the state receives.
The Congressional Budget Office, in a moment of candor it probably lacks the self-awareness to regret, once acknowledged: “Federal grant programs provide a mechanism for federal policymakers to promote their priorities at the state and local levels by influencing the amount of money spent by state and local governments and the types of activities on which those governments spend their money.”
Such an end-run around the constitutional system of federalism in service of a Washington-knows-best attitude should outrage state lawmakers and their constituents. No wonder the recipients of federal funds are desperate to keep the rest of us in the dark.
When lawmakers come back in February, they should stand up for Oklahoma and override the governor’s veto.
Michael C. Carnuccio serves as president of the Oklahoma Council of Public Affairs (

Michael Carnuccio

Former OCPA President

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