One of the thorniest issues of intergovernmental fiscal relations is state oversight of local fiscal affairs. States have oversight responsibility and must take action when local governments run afoul of responsible fiscal behavior. Less accepted is how states can detect local financial difficulties before they become emergencies that require state takeover. Research in the 1970s provided some assistance to states wishing to recognize local financial emergencies. But the time has come to look at this issue anew, particularly with an eye toward predicting local financial problems before they become serious. This article describes a 10‐point scale that predicts these problems and tests the scale to predict local fiscal stress in a sample of Michigan local governments.

Although there is a growing literature on policy entrepreneurs and policy enactment, there has been little systematic examination of legislative policy entrepreneurs and the effect of policy entrepreneurship on a legislator's standing. This article identifies policy entrepreneurs in each of three sessions of the North Carolina General Assembly and examines the effect of policy entrepreneurship on legislators' effectiveness as perceived by peers and close observers. It also defines and identifies a second category —policy opportunists — legislators who have not exhibited expertise and persistence necessary for policy entrepreneurship but who are associated with salient issues whose "policy window" has opened. Both policy entrepreneurs and policy opportunists benefit from increases in their standing, but policy entrepreneurs benefit more than their opportunistic peers. The importance of the issue cycle is illustrated in the changing cast of legislative policy entrepreneurs and policy opportunists over the three sessions.

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Although the fiscal condition of local governments has been a recent concern for some states, there is considerable ambiguity about what constitutes fiscal difficulties and how to recognize them before they become fiscal emergencies. This article outlines the results of a 50-state survey to identify and classify indicators states use to assess or monitor fiscal conditions in their local governments. The survey revealed that most states did not have such indicators in place, and those that do rarely agree on which indicators to construct. Only 15 states have in place indicators to assess or monitor local financial conditions, and many of these states use indicators that do not identify local problems before they become major. Most indicators used by states are based on operating position variables such as fund balances and are predicated on the assumption that local financial emergencies are management problems rather than the result of longer term trends.

In its 1993 report, the Winter Commission gave direction to the federal government in the area of health policy and Medicaid: lead, follow, or get out of the way. This article examines how the federal government responded to that advice, specifically asking what has happened in the allocation of responsibility in health policies between 1993 and 2006. In short, unlike the suggestion that there be a better‐defined direction in federal–state policy assignments in health, the ensuing years have resulted in more of the same. The authors examine what has happened, particularly focusing on vertical diffusion—where the states have acted first—and on the role of policy learning in federal decision making. They find little recognition of policy learning in recent federal health laws—even in areas in which state experience was extensive. The federal government is leading in some health policies—but it is leading without learning.

PROLOGUE: After turning to managed care to hold down costs, states found that they needed to shed their regulatory mentality toward Medicaid services and learn to implement policy through the contracting process. Theoretically, contracting relieves both states and service providers of a trying, micromanagerial relationship and creates a conceptually satisfying single point of accountability.In practice, states must build new capabilities to monitor and assess health plan performance. Their new role as hard-nosed purchaser has to be balanced with the traditional responsibility to protect and serve the disadvantaged, and plans can walk away if states push too hard. Nor does the "prudent purchaser" model provide much guidance for

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