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This article explores New York State's dollars-and-cents relationship with Washington and the nation in the context of broad changes over time in the respective fiscal roles of Washington and the states. The 1970s brought what many participants and observers called the “New Federalism,” in which Washington provided “more fiscal aid on a more flexible basis to state and local governments in the form of revenue sharing and block grants.” Furthermore, it turns to a description of broad fiscal policies and trends in the Empire State itself. Seeking new federal funding is a basic part of annual budget strategy. Federal funding was a significant source of assistance for cities in the 1970s, but has not kept pace with growth in overall budgets since then. Issues of federalism will continue to produce important impacts on the scope, nature, cost, and quality of public services in New York and the nation.