State aid refers to public funding provided by individual states or central governments. In the US, it is often mistaken for federal spending. The EU has specific rules on aid, prohibiting any that inhibits market competition. State aid varies by type and state, including financial aid for education and transportation funding. State aid for public schools can fund special education, bilingual education, and arts programs.
State aid is a broad term encompassing a variety of different types of public funding. Because the United States is constituted as a republic, state aid in the United States refers to money spent by individual states on specific causes, but is sometimes incorrectly referred to as federal government spending. In other countries, especially those that are not constituted as a republic with independent states, state aid can also refer to aid provided by the central government of the country. In this capacity, the term state is used because a country is also called a nation-state.
Although the European countries were not born as republics, the creation of the European Union united the European countries into a quasi-republic. Although each country provides its own national security and aid, the European Union has specific rules on aid. Any State aid which inhibits competition on the market is prohibited, except in the case of achieving common objectives or correcting market failures.
The different types of aid vary according to the State to which it refers. Many U.S. states offer financial aid, also called state-funded scholarships, for students attending college or graduate school. State financial aid depends primarily on the student’s needs and requires that the student and the student’s family have resided in the state for at least one year prior to entry into an education program. Additionally, some states have achievement-based educational aid programs. A student must maintain a minimum grade point average or he will be ineligible to receive the aid.
Another common type of state aid is money used for transportation products. In the United States, cities and counties are responsible for the construction and maintenance of most roads. State aid for transportation, granted to municipalities and counties, is included in the annual budget of many states. The money, which supplements what counties and cities have in their budgets, is used for the construction, upgrade and maintenance of bridges and roads.
State funding for public schools is also a common type of state aid. Although individual school districts make their own rules and are funded by property taxes, many school districts depend on a certain amount of aid from their state to operate above the bare minimum. Special education, bilingual education, and special arts programs are examples of the types of programs that can be funded by the state.
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