WHEN YOU argue, as we were rash enough to do the other day, that there is little justification for a general revenue-sharing program that makes the federal government do the dirty work of missing taxes while giving no-strings-attached money to states and localities, you will hear from representatives of state and local governments. Their response is that the federal government puts enormous financial burdens on them by way of more than 1,200 different regulations and requirements that cost the earth to meet.

It's true that federal government requirements can cost other governments a lot of money. There are court orders, laws concerning the environment, rules for operating the federally supported programs from day care to mass transit and just about anything else you can think of. The only way to judge the wisdom of these diverse requirements is on a case-by-case basis. But there are two general problems involved that ought to be looked at first.

One is that there are too many units of government in the United States, and Washington is doing direct business with most of them. There are some 60,000 "jurisdictions" to whom the feds directly hand out money and upon whom they impose a barrage of rules and regulations. These range from familiar state, county and city governments to special-purpose districts for such things as water, transit, irrigation and mosquito control. Many of the latter -- in case you were worried that the thing isn't circular enough -- were created precisely to receive such aid. Around 12,000 "toy governments" are the direct recipients of federal revenue sharing, even though they have no full-time employees. In such an organizational jungle, it is small wonder that the costs of administration generally seem way out of proportion to the value of services provided, or that orders to do this or what frequently fall on governmental units utterly unable to handle them.

The other general source of difficulty is the way the various partners in the federal game view and treat each other. At the national level, Congress passes laws, and the federal courts and administration zealously interpret them, with too much concern for heading off pressure from special-interest groups and too little concern and consequences to the unfortunates who must put them into effect. For their part, states and localities are too gullible in accepting federal grants at face value without examining the hidden costs of operating these grant programs or the local acceptability of the requirements they entail.

It is perfectly reasonable for the federal government to set conditions for the spending of federal money that further both the specific purposes of the program and some broad national goals. But it is also reasonable for receiving governments to look the gift horse in the mouth and decide that, at least as far as they're concerned, the old beast's unkeep is too high. If enough of them should one day decide to reject the offer, that could be the best signal yet to both Congress and the executive branch that something important needs to be fixed.