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26
21
3
4
TESTIMONY
PRESENTED BEFORE
THE SENATE BUDGET COMMITTEE
BY
WILLIAM M. DIEFENDERFER, III
DEPUTY DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET
FEBRUARY 20, 1991
Mr. Chairman, Members of the Committee, it is a pleasure to
be with you today to outline the general concept and philosophy
underlying the President's initiative to turn over a number of
Federal programs to the States, consolidating them into a single
block grant.
WHAT IT IS:
The general concept of the initiative is straightforward.
We will work with State and local governments, and the Congress,
to select several Federal grant programs for "turnover." We
would then take the money that would have been budgeted at the
Federal level for the next five years and convert it into a
single block grant, thus providing the States with the ability to
manage the funds more flexibly and more efficiently.
The funding for the new block grant would approximate the
same distribution to the individual States as they would have
received under the present program structure -- seeking to ensure
that no State would be harmed by the proposal.
THE WAY IT WOULD WORK:
Some very basic principles guide the way the program would
work.
First, the list of federally funded programs must be
mutually agreed upon -- by the Administration, the States and
localities, and the Congress.
Second, the proposal is not some sort of budgetary gimmick
designed to reduce the Federal budget or specific Federal
programs. The Administration is committed to funding these
programs at the projected levels for the next five years.
Third, the proposal is not revenue sharing. Once the final
mix of programs is decided, the States would use the funds
provided in the same areas as the original programs, although not
necessarily in the same proportions and same ways.
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Fourth, as I have mentioned, the proposal will have neither
winners nor losers. Once a list of programs has been agreed
upon, and at current funding level determined, we will calculate,
on a State-by-State basis, what the funding level should be,
based on the current distribution of funds in the programs that
would be turned over.
Finally, the list of "Potential Block Grant Programs" in the
Budget is just that -- "potential." The list, in effect,
provides in the 11 suggested programs illustrative examples of
what might be turned over. These total more than $21 billion in
Federal spending. We are already working with organizations that
represent State and local governments to select at least $15
billion in programs for turn over.
WHY DO IT:
The reasons for our proposal are as follows.
The proposal allows the States and localities to manage
a pool of resources more flexibly and efficiently.
The proposal allows those in the best position to
determine the needs of their citizens to be free -- to
target and focus Federal assistance in accordance with
each of their circumstances and to provide for
innovation, as "laboratories of democracy."
This last point is important. As the President suggested in
his State of the Union address: "The Federal Government too often
treats government programs as if they are of Washington, by
Washington, and for Washington." The President urged a more
dynamic life cycle: "Some programs should increase. Some
programs should decrease. Some should be terminated. And some
should be consolidated and turned over to the States."
Another reason for our proposal is the growing number of
specific grants to State and local governments. In 1980, there
were 428 such programs. That number was reduced to 297 following
enactment of ten block grants in 1982. But, by 1990, the number
had not only climbed back to where we were a decade ago, but
increased even further to more than 4501
Once again, we need to reduce Federal overload. Experience
with the block grants enacted in 1981 and 1982 has shown that
greater efficiency can be achieved if State agencies have more
flexibility in administering programs. As you may know, the
General Accounting Office has historically supported the use of
block grants as a way to "decongest" the Federal system and
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provide a clearer focal point for accountability. GAO has found
that the States reported widespread management improvements under
the 1981 block grants. These focused on reduced time and effort
preparing applications and reports, improved planning and
budgeting practices, and better use of staff. The GAO concluded
that block grants work, and work well.
Our proposal would also permit reductions in regulation and
associated paperwork. The 11 candidate programs on our list are
currently subject to 1,028 Federal Register pages of regulation,
requiring an estimated 4.2 million hours of paperwork each year.
To gauge the opportunity for simplification, one has only to look
at the nine block grants established by the Omnibus Budget
Reconciliation Act of 1981. The number of Federal Register pages
was reduced from 905 to 31, and paperwork was reduced by 5.9
million hours, or 91 percent.
WHY THESE 11 PROGRAMS?:
Let me restate what Director Darman told members of this
Committee last week. "Conceptually we are firm. With respect to
specific programs, our list is strictly illustrative." Let me
give you a sense of why we picked these program as illustrative.
First, in the area of education:
1)
Impact aid payments to local educational agencies
compensate them when Federal activities result in
increased enrollments or losses of local revenue. The
impacts are local; the States are in a better position
to gauge the need for assistance.
2)
Supplemental Educational Opportunity Grants go to post-
secondary schools to supplement Pell grants and other
student aid. They are "campus based" and not portable.
The Budget proposes increases in the Pell grants
program and an increase in school matching for the SEOG
program from 15 percent to 50 percent. The States are
in a better position than we to judge how these dollars
might best be allocated.
3)
The Chapter 2 Block Grant Program makes formula grants
to States and local educational agencies (based on
school-aged population) to improve the quality of
elementary and secondary education in both public and
private schools. Why not let the States determine the
best uses of these education funds?
4)
Public library programs help libraries; the largest of
these programs consists of formula grants to States.
If these programs remain Federal, the Budget proposes
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to limit their use to support of local library literacy
efforts. Again, why not let the States decide how best
to help literacy and libraries?
Second, in the area of environmental protection:
1)
EPA's construction grants program provides funds to
States to build municipal and regional sewage treatment
facilities. Since over 90 percent of treated sewage
flow is now treated at the secondary level, Congress
has proposed a phase out of this program over time.
The States are in a better position to judge the
remaining needs and allocations.
Third, in the area of health and human services:
1)
State welfare administrative expenses are currently
reimbursed at varying rates by the Federal Government
in connection with the Medicaid, Aid to Families with
Dependent Children, and Food Stamp programs. The block
grant proposal would permit consolidation of
administrative reimbursement, eliminating separate
accounting by program.
2) The Social Services Block Grant provides funds to
States to support a variety of social welfare programs.
Inclusion of this program permits State and local
governments to manage their efforts in this and other
areas more flexibly.
3)
The Low-Income Home Energy Assistance Program provides
money to States to help poor families pay their heating
bills. Consolidation of this program in the
Administration's proposal will allow States to
determine the best way to provide supplemental income
to poor people.
Fourth, in the area of housing and community development:
1)
Five public and subsidized housing programs are
included in this proposal. These provide funds to
Public Housing Authorities and others to assist low-
income housing through rental subsidies,
rehabilitation, crime and drug reduction, and
management services. These are all local needs, better
dealt with at the State and local, not Federal and
local, levels.
2)
The Community Development Block Grant Program funds
housing rehabilitation, economic development, public
works and social services through grants to cities and
States. These again are matters over which the States
will have a better sense than the Federal Government.
4
0
20200000007
And finally, in the area of law enforcement:
1)
The Byrne Memorial State and Local Law Enforcement
Assistance Program provides formula and discretionary
grants to States and local communities for various
crime and antidrug programs. Consolidation of these
programs would provide greater flexibility to the
States in dealing with these problems.
These 11 programs were selected to serve as examples of the
kind of programs that should be considered for turnover to the
States. The programs all involve State and local
responsibilities; most of them are already largely managed at the
State and local level. By and large, we felt that these programs
provided good examples of Federal activities that could be better
managed closer to home.
Again, let me emphasize that the 11 programs or program
groups in the Budget were listed primarily as examples of what
might, or could be, consolidated. They are not a final list, but
rather a starting point for discussions with the Congress, and
State and local government. These discussions are under way, and
we will be providing details to the Congress in the coming weeks.
CONCLUSION:
This is a serious proposal. We have given it serious
thought and consideration. We know you will give it serious
thought and consideration. We also know our partners in
government, the States and localities, will give it serious
thought and consideration.
We have been enormously encouraged by what we have heard so
far. The Governors have been strongly supportive of the concept.
You have heard from Governor Ashcroft (currently vice Chairman of
the National Governors' Association). State legislators are also
supportive. We have received letters from the National
Conference of State Legislatures and the American Legislative
Exchange Council. We have also heard, among others, from the
President of the Louisiana Senate, Samuel Nunez; the former
Speaker Pro Tem of the Colorado House, Paul Schauer; and the
Minority Leader of the Illinois House, Lee Daniels.
At the same time, we understand the problems presented to us
last week by various representatives of local governments
regarding the Community Development Block Grant Program. We have
asked them to provide us with a proposal in this area that would
meet their concerns. We have also heard from mayors who support
the full and open discussion of Federal programs that can be
administrated at the State and local levels. Among them are the
5
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mayors of Madison, Wisconsin; Modesto, California; and North
Charleston, South Carolina.
But, most important, I would urge each of you to attempt to
focus the debate on the concept. Then, let's decide where we can
agree on specific programs, and move forward to construct a list
of programs for turnover that is mutually agreeable and
beneficial to all.
One last point. The President's target of at least $15
billion seems a reasonable minimum. It requires a substantial
sum to test a new concept. We propose to select the programs,
with the advice of the States and localities, and we propose to
commit to fund them fully over at least a five year period. Some
have suggested that these programs will be vulnerable once lumped
into a block grant. I would suggest they will be equally
vulnerable if they remain separate in the appropriations process.
We are not proposing to turn over programs of our choosing,
and we are not proposing to turn over programs with built-in
growth potential down the road and no funding commitment. In
this proposal, you get the money when you get the program.
Thank you for allowing me the opportunity to clarify and
amplify the Administration's goals and objectives with regard to
this "turn-over" initiative.
I will now be happy to take your questions.
6
DIRECTOR'S INTRODUCTION AND OVERVIEW TABLES
Part One-17
budget proposes funding for major techno-
application of Risk Management Budget-
logical advances in high-speed rail and
ing. (See Chapter IX.C.)
"smart cars/smart highways," which could
Accounting reform and oversight. The
help relieve the stress on the current sys-
budget continues to expand its analysis
tem. (See Chapter IV.D.)
and presentation of "Hidden Liabilities."
The budget would continue to modernize
(See Chapter VIII.) The Administration is
the national airspace system ("NAS-
implementing the new Chief Financial Of-
PLAN")-increasing funding for Federal
ficers legislation-improving accounting
Aviation Administration facilities, equip-
standards, financial reporting systems,
ment, and systems by 29 percent, to $2.7
and audits. The budget explicitly identifies
billion.
High-Risk Areas of vulnerability to fraud,
waste, and abuse. And, as appropriate, the
Within the budget for space exploration
Administration is engaging special teams
and development, there is funding for the
in the effort to reduce these vulnerabil-
space shuttle, a new advanced solid rocket
ities. (See Chapter IX.A.)
motor (ASRM), a new advanced launch
system (ALS), and a national aerospace
Reducing waste and improving returns on
plane (NASP). As the use of space becomes
investment. This is not only a problem of
increasingly relevant, these essential ele-
accountancy and oversight, as suggested
ments of the space transportation system
above. It is also a problem requiring great-
should be better understood-and fund-
er program evaluation and a willingness
ed-as a vital part of America's infrastruc-
to terminate outdated or ineffective pro-
ture investment. (See Chapter IV.C.)
grams and projects. (See Chapter IX.B.)
The problem, however, goes beyond con-
(10) Governmental Management Reform
ventional matters of accounting and eval-
uation-as discussed further below.
Any 1.4 trillion-dollar-per-year enterprise
(e.g., the Federal Government) is bound to
show signs of failure in one place or another.
PROGRAM LIFE-CYCLES-AND
But the public is demanding; and respect for
STATES AS LABORATORIES
governmental performance remains under-
standably low. There is much room for man-
Clearly, the government has a need and a
agement improvement.
responsibility to improve the return on invest-
ment of Federal dollars. And improved ac-
Discontent with government is often visible
(and deemed to be newsworthy). The less
counting, analysis, and evaluation have an im-
portant role to play in this effort. But beyond
glamorous issues of management improvement
these rather technical issues, there are larger
typically are not. Nonetheless, management re-
structural issues that also require attention.
form continues to be advanced:
Fortunately, the 1990 Budget Act creates a
Budget process reform. The Administration
framework that can encourage a more basic
is implementing the important and valu-
reform perspective.
able reforms of the 1990 Budget Agree-
ment-enforceable spending caps, "pay-as-
The discussion- of Entitlement Reform
you-go," and credit reform. Beyond these,
(above) has highlighted the budgetary "take-
the Administration continues to seek the
over" by mandatory programs-and the tend-
line-item veto, joint (not concurrent) budg-
ency of such programs increasingly to benefit
et resolutions, biennial budgeting, and a
the non-poor. The pay-as-you-go reforms may
balanced budget Constitutional amend-
serve not only to restrain the further expan-
ment. (See Chapter IX.D.)
sion of "mandatories." " They should also en-
courage greater anti-poverty efficiency in the
Regulatory reform. The principles of regu-
design of such programs.
latory reform continue to be advanced
through the President's Competitiveness
With respect to discretionary programs, the
Council and the Office of Information and
effect of budget process- reforms may be an
Regulatory Affairs-and through broader
even more direct increase in attention to pro-
Part One-18
THE BUDGET FOR FISCAL YEAR 1992
gram efficiency, effectiveness, and return on
vestments have been decreasing as a share of
investment. This should be a natural out-
domestic discretionary spending. (See Chart
growth of the existence of fixed, enforceable
II-5.) The President's budget seeks to correct
caps on discretionary spending. With un-
this trend by increasing investment in R&D,
equivocal limits on available resources, com-
prevention, early childhood, and transportation
petition on the merits should increase.
infrastructure-areas with higher return.
As one begins to think about returns on in-
The expectation of a possible shift toward
vestment, it is perhaps interesting to consider
investment in programs with higher return
how much Federal spending might be consid-
may, of course, prove to be no more than a
ered "investment" at all. This question in-
request and a hope. The existing domestic dis-
volves highly arguable definitional issues.
cretionary program structure has, to date,
If one puts defense aside, and looks at how
proven to be rather rigid. Reform will require
much nondefense spending is oriented toward
a new flexibility and a new dynamic.
longer-term investment (returns accruing over
In the past, domestic discretionary programs
a period greater than five years), one finds
often came into existence to address one al-
that expenditures for short-term benefits clear-
leged "urgent priority" or another. The urgency
ly dominate. Long-term investments have been
may have derived from a transitory emer-
declining as a percent of GNP. (See Chart
gency, a desire for "demonstration," or a per-
II-4.) This is, in part, a reflection of the budg-
ceived need for Federal leadership in areas
etary "takeover" by transfer payments to indi-
where States and localities were slow to rec-
viduals ("mandatories")
ognize or accept responsibility. As an abstract
But even if one focuses only on domestic
matter, this rationale may have been legiti-
discretionary programs (i.e., excluding
mate.
mandatories), one finds that longer-term in-
Chart II-4. CORE GOVERNMENT, LONG-TERM INVESTMENTS,
AND SHORT-TERM BENEFITS
PERCENT
(Total Domestic Discretionary and Mandatory Outlays as a Percent of GNP)
15
14
13
SHORT-TERM BENEFITS
12
11
10
9
8
7
6
5
LONG-TERM INVESTMENTS
4
3
2
CORE GOVERNMENT
1
0
1962
1967
1972
1977
1982
1987
1992
NOTE: Long-term Investments and short-term benefits Include spending on both people and physical Investments.
Part One-19
II. DIRECTOR'S INTRODUCTION AND OVERVIEW TABLES
Chart II-5. CORE GOVERNMENT, LONG-TERM INVESTMENTS,
AND SHORT-TERM BENEFITS
PERCENT
(As a Percent of Total Domestic Discretionary Outlays)
70
LONG-TERM INVESTMENTS
60
50
40
SHORT-TERM BENEFITS
30
20
CORE GOVERNMENT
10
o
1962
1967
1972
1977
1982
1987
1992
NOTE: Long-term investments and short-term benefits include spending on both people and physical investments.
Once in existence, however, programs have
budget authority in 1992. (See Chapter
tended to become fixtures in the budget. There
IX.B.)
is, in practice, little evidence of a program life-
Some programs should decline. This
cycle-other than a move toward immortality.
should be the case when their relative pri-
In a world of fixed spending caps, there will
ority is judged to have decreased. This
be no room for emerging priorities if the pro-
budget proposes declines of $8.3 billion in
grams-of-old remain immortal. To allow adap-
budget authority from an additional 109
tation to shifting priorities, there will have to
domestic discretionary programs. These
be a more dynamic concept of program life-
programs were funded at a total of $27.4
cycles:
billion in 1991. Reasons for proposed re-
ductions are presented in Chapter IX.B.
Some programs and projects will have to
die. This should be the case, for example,
Some programs should increase. The re-
when a program (whether demonstration
ductions and terminations noted above
or not) has proven a failure, or when the
help finance program increases in areas
urgency of a past priority has been over-
judged to merit higher priority -or im-
taken by events. It should also be the case
proved return on investment. 250Γ domestic
when a demonstration has proven a suc-
discretionary programs are specifically rec-
cess and is, therefore, available for rep-
ommended for increases totaling $17.8 bil-
lication and funding through other
lion. (See Table B-6 in Chapter IX.B. and
sources. In applying these principles, this
the associated detail in Chapter XIII.)
budget proposes the outright termination
Some programs should be consolidated and
of 238 specific domestic discretionary pro-
turned over to the States-funded in more
grams and 3,591 specific. projects. These
flexible form. Programs appropriate for
terminations would save $4.6 billion in
such turnover may be selected from two
Part One-20
THE BUDGET FOR FISCAL YEAR 1992
broad categories: those whose purposes are
welfare reform, and transportation fi-
judged by States to be of continuing value,
nance. (See Chapter VI.)
but whose relative funding priority at the
The Administration seeks to reenforce this
Federal level is declining; and those which
seem, in any case to be appropriate for
natural power of the States-and to help
flexible management by the States.
build upon it.
The President has established a target of
In sum, the opportunities for constructive re-
$15 billion in program turnovers for the
form are many. (See Table II-5.) Incentives
States A list of possible turnover can-
for choice, innovation, and improved perform-
didates totaling over $20 billion is at Table
ance can be advanced in education. Investment
II-9. The actual selection of programs for
in path-breaking R&D can be increased. The
turnover would have to be authorized by
financial service sector can be modernized. Tax
the Congress-in consultation with the
incentives for saving and long-term investment
Administration and the Governors. (After
can-be strengthened. The budgetary "takeover"
the actual selection is determined, the cur-
by "mandatory" programs can be slowed; and
rent distribution of such programs by
the benefits of entitlements can be better tar-
State would be calculated. The Adminis-
geted for the needy. The problems of the
tration would then propose to replace
health system can be alleviataed, to some de-
these programs with a single consolidated
gree, by physician payment reform, mal-
block grant to the States. The formula for
practice reform, and an emphasis on preven-
this new block grant would approximate
tion. The National Drug Control Strategy can
the same distribution to the individual
be carried forward aggressively to its next
States as they would receive under the
stage. The approach to housing can be im-
present program structure-seeking to as-
proved by greater emphasis on choice, home-
sure that no State would be harmed by
ownership, and Enterprise Zones. Stresses on
the move to a new, consolidated block
the transportation infrastructure can be re-
grant.)
lieved. And the government itself can be man-
The value of this turn-over approach is
aged better-through budget process reform,
as follows. It allows the Federal Govern-
accounting reform, program evaluation, regu-
ment to reduce overhead. It allows States
latory reform, and reenforcement of the inno-
to manage a pool of financial resources
vative power of "States as laboratories."
more flexibly, It moves power and deci-
These reforms can all be accommodated
sionmaking closer to the people. And it
within the "flexible freeze" (with total spending
reenforces another reformist theme of this
growing at less than the inflation rate) and
Administration: appreciation and encour-
within the limits of the 1990 Budget Act.
agement of "States as Laboratories."
This last point is especially important. The
If these reform measures are adopted-and
American Federal system has within it an
assuming satisfactory resolution of the Gulf
crisis in the not-too-distant future-the econ-
enormous power for innovation: the natu-
ral variation and experimentation among
omy can not only return to economic growth.
the States. For too long, this potential has
It can move on toward a new record for eco-
been under-appreciated at the Federal
nomic expansion as America advances to the
level. Nonetheless, the reality is that some
21st century.
of the most interesting examples of inno-
vation are being set by the States-in
RICHARD DARMAN
areas ranging from educational choice, to
DIRECTOR,
enterprise zones, to health cost control,
OFFICE OF MANAGEMENT AND BUDGET
IB
DIRECTOR'S INTRODUCTION AND OVERVIEW TABLES
Part One-21
Table II-6. SPENDING, REVENUE, AND DEFICIT, 1991-1996
(Dollar amounts in billions)¹
1991
1992
1993
1994
1995
1996
%
Dollars
%
%
Dollars
Dollars
Dollars
Dollars
%
Dollars
%
Change
Change
Change
Change
Change
Spending:
Discretionary:
Defense
307.8
300.4
-2.4
293.3
-2.4
287.6
-1.9
289.2
0.5
293.8
1.6
International
18.7
19.6
4.7
20.4
4.2
21.5
5.1
21.8
1.3
22.0
0.9
Domestic
199.8
212.0
6.1
223.2
5.3
228.9
2.6
231.7
1.2
238.5
2.9
Subtotal, discretionary
526.3
532.1
1.1
536.9
0.9
538.0
0.2
542.7
0.9
554.2
2.1
Mandatory
686.2
707.5
3.1
705.3
-0.3
673.5
-4.5
713.8
6.0
775.6
8.7
Interest
197.0
206.3
4.7
212.0
2.8
215.5
1.6
213.8
-0.8
211.0
-1.3
Total spending
1,409.6
1,445.9
2.6
1,454.2
0.6
1,427.1
-1.9
1,470.3
3.0
1,540.8
4.8
Total revenues
1,091.4
1,165.0
6.7
1,252.7
7.5
1,365.3
9.0
1,467.3
7.5
1,560.7
6.4
Consolidated deficit
318.1
280.9
-
201.5
-
61.8
-
2.9
-
-19.9
-
Memorandum
Deposit insurance (included above):
Resolution Trust Corporation
84.6
76.1
-
34.3
-
-47.6
-
-45.7
-
-32.0
-
Bank Insurance Fund
15.9
9.7
-
8.0
-
6.8
-
0.9
-
0.6
-
FSLIC Resolution Fund
11.1
3.3
-
2.8
-
2.2
-
2.7
-
1.5
-
Savings Association Insurance Fund
and Other
_*
-1.0
-
-0.8
-
0.4
-0.3
*
-
-
-
Subtotal, Deposit insurance
111.5
88.1
-
44.2
-
-38.1
-
-42.3
-
-29.9
-
Desert Shield (placeholder, included
above)
8.2
4.6
-
0.8
-
0.4
-
-
-
-
-
Social Security (included above):
Operating surplus
40.3
38.7
-
45.3
-
56.6
-
65.5
-
77.2
-
Interest
20.2
23.7
-
28.0
-
32.8
-
38.3
-
44.6
-
Total
60.4
62.4
-
73.3
-
89.3
-
103.9
-
121.8
-
1 Percent change measures change from previous year.
$50 million or less.
NATIONAL CONFERENCE OF STATE LEGISLATURES
WASHINGTON OFFICE: 444 NORTH CAPITOL STREET, N.W. SUITE 500 WASHINGTON, D.C. 20001
202-624-5400 FAX: 202-737-1069
JOHN MARTIN
STATEMENT OF MAINE HOUSE SPEAKER JOHN MARTIN, PRESIDENT,
SPEAKER OF THE HOUSE
MAINE
NATIONAL CONFERENCE OF STATE LEGISLATURES, IN RESPONSE TO
PRESIDENT. NCSL
PRESIDENT BUSH'S BLOCK GRANT PROPOSAL
WILLIAM RUSSELL
CHIEF LEGISLATIVE COUNS
I am pleased today to present NCSL's response to the President's block grant
VERMONT
proposal.
STAFF CHAIR. NCSL
WILLIAM POUND
In February, Governor Sununu asked NCSL and NGA to develop
EXECUTIVE DIRECTOR
recommendations on the structure of the block grant. Since that time, both
organizations have undertaken intensive efforts with their memberships to respond
to that request.
Immediately following the President's State of the Union message, i said that state
legislators endorsed the concept of a block grant and were anxiously awaiting the
next step in the process. Today we take the next step.
We remain very supportive of any proposal that would address NCSL's long-
standing concerns about unfunded mandates, preemption and the invasion of
state revenue systems. State legislators also hope to use this debate to
accomplish other intergovernmental reforms relating to preemption and mandates
across the board.
Although the specific programs that Governor Campbell and I offer today in the
NCSL and NGA proposals are not entirely the same, this does not mean that there
are deep divisions among the states. The somewhat varied approaches instead
indicate that there is more than one approach to this consolidation process.
The critical point to be made today is that we are now ready to begin serious
negotiations with the Administration and Congress on a legislative package.
Background
State and federal governments have long been partners in providing services to
our shared citizenry. This partnership has been effective in combining the inherent
1560 BROADWAY SUITE 700 DENVER. COLORADO 80202 303-830-2200 FAX: 303-863-8003
Page 2
strengths of both levels of government and realizing administrative efficiencies. At
the same time, it has kept government closest to those being served in areas such
as unemployment services, aid to families with dependent children, the highway
and mass transit program, sewage treatment and other environmental protection
efforts, and the war on drugs.
In recent years, however, the burden on states for providing these services has
been growing. Federal funding has steadily declined and, perhaps more
significantly, the federal government has increasingly relied on intergovernmental
mandates aimed at the states.
Last year, for example, at least 20 additional mandates with a price tag topping $15
billion were imposed on the states. They range from new standards for clean air
and the transportation of hazardous waste to requiring driver's license revocation
for certain drug offenses.
This latter trend has resulted in extremely burdensome regulations and earmarks
and restrictions on the use of funds that limit the ability of states to make
adjustments according to needs.
Goals and Objectives
Proposals to consolidate programs to ease this increasing burden on the states are
eagerly welcomed by state legislators. The goals of such consolidation must be to
increase both the responsibility and authority of states. Specifically, block grant
legislation should have the following goals:
O
Enhance the discretion of state policymakers. Categorical set-asides must
be avoided and states must be provided with greater freedom to use funds,
including the authority to transfer funds.
O
Reduce the regulation of states. Front-end paperwork and post-audit
requirements should be reduced, minimal reporting requirements that emphasize
process rather than outcomes should be established, and state laws and
procedures should be relied upon for the regulatory process.
Page 3
NCSL Proposal
The nation's legislators recommend eleven block grants in five categories. They
include approximately 85 existing, mostly categorical programs, with FY 1991
funding totaling $21.233 billion. The proposal is consistent with NCSL's ongoing
efforts to protect the integrity of the intergovernmental system.
The programs selected include those that have been especially encumbered by
regulation and programs that have become subject to excessive categorical
fragmentation. Consideration also was given to simplifying current block grants
and maintaining trust fund programs funded by dedicated revenue sources.
Proposed Block Grants
Agriculture
FY 91 (millions)
Extension Service
$366
Rural Economic Development
1,120
Criminal Justice
578
Child Development, Education and Training
Readiness for School
745
The School Years
3,560
Adult Literacy, Training and Lifelong Learning
2,769
Environment
Air & Land Environmental Management
337
Water Quality
2,261
Transportation
National Highway Program
7,453
Highway Safety Program
250
Small Community and Rural Access
912
Metropolitan Mobility Block Grant
882
TOTAL
21,223
Essential Criteria
As we advance our list to begin a serious dialogue with the governors, the
Administration and Congress, state legislators recognize that there are other ways
of meeting the ultimate goal of this proposal. However, if the final
Page 4
package is to truly encourage state innovation and flexibility, several specific
principles must be respected. Simply put, programs that are not in line with the
basic principles of federalism should not be considered for inclusion.
O
Legislation must reduce and streamline existing regulations associated with
the grant programs to be replaced. A 'block grant' with strings is not a block grant.
O
Legislation must ensure stable funding, with future funding secured by an
automatic adjustment for inflation. New block grants must be set outside of the
discretionary spending caps. There must be a commitment that these programs
will not become easy targets for future deficit reduction efforts.
O
Program selection should be confined to those that are primarily state-
federal programs, or those for which states are the primary beneficiaries.
o
Consolidations should ensure distributive neutrality among the states -
Putting states in competition with one another will violate the spirit - and the desired
outcome - of the effort.
Clearly, the challenges facing all of us today will require a strong partnership
among all levels of government. The President's proposal is an opportunity to
begin a new effort to strengthen that partnership to better meet the needs of the
country.
We urge the Administration and Congress to review our response and work with
governors and legislators to quickly develop a plan that will provide services more
efficiently and creatively, will maintain the states as effective partners in the federal
system, and will enhance the nation's competitiveness in the world economy.
April 8, 1991
For additional Information, contact Susan Seladones or Kathleen Proa in
NCSL's Public Affairs Office at 202-624-5400.
National Conference of State Legislatures
POTENTIAL BLOCK GRANTS -- OVERVIEW
Block grants are suggested in five categories:
1. Agriculture
2. Criminal Justice
3. Child Development, Education, and Training
4. Environment
5. Transportation
Eleven block grants are suggested, combining eighty programs. The programs included received $21
billion in Fiscal Year 1991 appropriations.
These programs were selected according to certain criteria, including: programs which have become
especially encumbered by regulation, programs that have become subject to excessive categorical
fragmentation, simplification of current block grants, and maintenance of trust fund programs funded
by dedicated revenue sources.
PROPOSED BLOCK GRANTS
FY91
(millions)
Agriculture
Extension Service
$ 366
Rural Economic Development
1,120
Criminal Justice
578
Child Development, Education and Training
Readiness for School
745
The School Years
3,560
Adult Literacy, Training & Lifelong Learning
2,769
Environment
Air & Land Environmental Management
337
Water Quality
2,347
Transportation
National Highway Program
7,453
Highway Safety Program
250
Small Community & Rural Access
912
Metropolitan Mobility Block Grant
882
Total
21,319
Page 1
National Conference of State Legislatures
April 1991
AGRICULTURE
Extension Service
Would be comprised of the extension service which is a national education network that provides out-
of-school, applied education, information, and technology transfer to the public on national issues and
concerns. There are sixteen programs that would be included in the block grant. In Fiscal Year 1991,
these programs were appropriated $366.2 million.
Rural Economic Development
Would include the FmHA Water and Waste Disposal money; FmHA Community Facility; Rural
Development Loan Fund; FmHA Water and Waste Disposal; FmHA Business and Industry; and the
FmHA Community Facility. The grants to also be included include the FmHA Water and Waste
Disposal; Rural Development; Fire Protection; Solid Waste Management; and HUD Rural
Development Councils Disposal. In Fiscal Year 1991, this program was appropriated $1.1 billion.
CRIMINAL JUSTICE
Would combine the Drug Control System Improvement Grants and the Juvenile Justice and
Delinquency Prevention Grants into one block grant. In Fiscal Year 1991, these programs were
appropriated $578 million. The Administration has proposed cutting the Drug Control System
Improvement Grants and eliminating the Juvenile Justice and Delinquency Prevention Grants in his
recent budget proposal.
CHILD DEVELOPMENT, EDUCATION AND TRAINING BLOCK GRANTS
Readiness for School
Would combine the Child Care Development Block Grant and the Child Care Licensing Grants into
one grant. In Fiscal Year 1991, these two programs were appropriated $745 million.
The School Years
Would combine the following programs: Chapter 2 Education Block Grant; High School Equivalency
Program; JTPA Youth Programs; Drop-Out Prevention Demos; Drug-Free Schools and Communities
Act; Vocational Education; Foreign Language Assistance Program; Education for the Homeless
Youth; Eisenhower Math and Science Grants; and Bilingual Education. In Fiscal Year 1991, these
programs were appropriated $3.6 billion.
Adult Literacy, Training, and Lifelong Learning
Would combine the following programs: Job Training for the Homeless; Literacy Training for the
Homeless; Community Service Employment for Older Americans; JTPA Adult Training, JTPA
Dislocated Workers; Adult Education Act; Vocational Education; Workplace Literacy Partnerships;
Workplace Literacy; and Student Literacy Corps. In Fiscal Year 1991, these programs were
appropriated $2.8 billion.
ENVIRONMENT
Air and Land Environment Management
Would combine the following programs: Clean Air; Public Water Systems; Underground Injection;
Special Studies; Hazardous Waste; Underground Storage Tanks; Pesticide Enforcement; Pesticide
Page 2
National Conference of State Legislatures
April 1991
Program; Radon Program and Toxics Enforcement. These programs were appropriated $336.9
million in Fiscal Year 1991.
Water Quality
Would combine six programs, including the EPA sewage treatment construction program, the largest
program included, which received $2.2 billion in Fiscal Year 1991. Also included are the programs for
Clean Water Management, Clean Lakes, Nonpoint Source; Wetlands, and 104 (b) Special Studies. In
total, these programs were appropriated $2.3 billion in Fiscal Year 1991.
TRANSPORTATION
National Highway Program
Would include the Interstate 4-R program; the Primary routes; the Urban System; Bridge
Rehabilitation; and Interstate Substitution. In Fiscal Year 1991, these programs were appropriated
$7.4 billion.
Highway Safety Program
Would include: State and Community Highway Safety Programs; Highway Safety Programs; Motor
Carrier Safety Assistance Program; Hazard Elimination; and the Rail-Highway Grade Crossing. In
Fiscal Year 1991, these programs were appropriated $250 million.
Small Community and Rural Access
Would include: UMTA Section 18; Rural Secondary Roads; and Bridges. In Fiscal Year 1991, this
program was appropriated $912 million.
Metropolitan Mobility
Would include: UMTA Section 9; Urban Systems; and Bridges. In Fiscal Year 1991, this program was
appropriated $882 million.
Page 3
EXTENSION SERVICE BLOCK GRANT
The Cooperative Extension Service is a national education network that provides
out-of-school, applied education, information, and technology transfer to the
public on national issues and concerns. For example, the Nebraska Extension
Service implements education programs in the areas of ground and surface water
protection. The Extension Service in Massachusetts helps promote tourism,
wood industry development, agriculture in the classroom, and improved nutrition.
Formula: Federal funds are distributed primarily by formula on the basis of
population and other factors. Most of these funds are matched by the states and
provide the federal share of costs associated with program activities.
Comments: The President's budget provides for a slight 3 percent increase over
fiscal year 1991. The activities under the Extension Service are viable candidates
for a block grant for two reasons. First, federal funds are distributed to the states
to complete operation of the program. Secondly, activities of many of the
individual programs are often part of a larger government initiative in which states
are significantly involved. For example, there are rural development funds as well
as funds for water quality education under Extension. There two programs
support larger national government-wide initiatives taking place in those areas.
Funds for Extension could be consolidated, allocated to states according to the
current formula with states prioritizing use of funds based on their own priorities.
Program
FY91
(in millions)
General Formula Programs
Smith-Lever 3 (b & c)
252.6
D.C. Extension
1.0
Subtotal
253.6
Smith-Lever Section 3 (d) programs
National Interest Programs
Water Quality
10.4
Youth At Risk
7.5
Food Safety
1.5
Low Income Nutrition
60.5
Pest Management
7.4
Pesticide Impact Assessment
3.2
Other Earmarked Programs
Farm Safety
2.0
Urban Gardening
3.6
Financial Management
0.0
Indian Reservation Agents
1.0
Rural Development Centers
.9
Renewable Resources Exten.
2.8
Disadvantaged Farm Assist.
2.6
Federal Administration
9.2
Total
366.2
RURAL ECONOMIC DEVELOPMENT
To provide states with flexibility to include resources from the Farmers' Home
Administration in individual state efforts to enhance the economic capacity of rural
areas, to consolidate programs administered by U.S. Department of Agriculture
that are directly involved in rural economic development approach between state
and federal programs. The block grant could be used to provide direct and
guaranteed loans, grants, and technical assistance to rural communities in need
of economic assistance.
Programs
FY91
(in millions)
DIRECT LOANS:
FmHA Water and Waste Disposal
$500
FmHA Community Facility
100
Rural Development Loan Fund
32
GUARANTEED LOANS:
FmHA Water and Waste Disposal
35
FmHA Business and Industry
100
FmHA Community Facility
25
GRANTS:
FmHA Water and Waste Disposal
301
Rural Development
21
Fire Protection
4
Solid Waste Management
2
ADMINISTRATIVE PROGRAMS:
Rural Development Councils
0
Total
$1,120
Comments: The USDA budget included $2.6 million in 1992 funding to finance
the State Rural Development Councils, which are the cornerstone of the
President's rural development initiative. The President has recommended an
additional $3 million from other agencies to also underwrite the costs of the rural
economic development initiatives. For the purpose of the 1991 total, no amount is
shown for this program. If a 1992 total was shown, it would include only the $2.6
million that is in the USDA budget.
States currently fund the lion's share of rural economic development activities.
The states lead in policy development as well. The federal programs have
resources to do the exact things states are trying to do in rural areas, but the
federal activities are completely outside the state policy and planning network. A
uniform set of priorities and criteria for rural economic development activities, as
developed by the state and local governments, could improve the efficiency of the
use of scarce resources. The programs outlined would continue to be
administered by federal agencies, but priorities for the grants would be developed
by the states.
This block grant is similar in intent to the House rural economic development
legislation that NGA actively supported in the 101st Congress. In 1991, all the
FmHA programs will be transferred to the newly created Rural Development
Administration within the Department of Agriculture.
CRIMINAL JUSTICE BLOCK GRANT
Drug Control System Improvement Grants
This program, established by the Anti-Drug Abuse Act of 1986 as the drug laws
enforcement program, provided funds to assist state governments in enforcing
drug laws. Funds could be used for a wide variety of purposes, including
personnel, equipment, facilities, personnel training, and supplies. The Anti-Drug
Abuse Act of 1988 merged the drug laws enforcement program with the law
enforcement block grant program into this new program. Allowable activities
under this program consist of activities of the two precedent programs. Through
1990, states have been required to provide 25 percent of total program funds
from 1991. own-source funds. Under current law, this would increase to 50 percent for
Formula: Allocation of twenty percent of the funds is discretionary. State formula
grants are calculated after subtracting the costs of federal administration. Each
state receives a "base" of 0.25 percent of the funds available for formula
allocation, with the balance on the basis of state populations.
Comments: The Administration requested $490 million for this program in the
recent budget proposal--down 1.8 percent from last year's appropriation.
Interestingly, we have not perceived a great deal of resistance from state officials
to current requirements that states prepare drug strategies in order to receive
funding. NGA and NCSL have, however, expressed strong objections to the new
proposal in the National Drug Control Strategy to require drug testing throughout
the criminal justice system as a condition of funding. The most difficult part of the
grant program over time will be the requirement that the funds be spent on new
programs. Next in difficulty is the match requirement, which, ironically, places a
greater fiscal burden on the states that seek additional funding. Of course,
greater flexibility would aid states in achieving targets.
Juvenile Justice and Delinquency Prevention Grants
Grants are made to states and local governments to assist them in planning,
operating, coordinating, and evaluating projects for the development of more
effective education, training, research, prevention, diversion, treatment, and
rehabilitation programs in the area of juvenile delinquency.
Formula: Funds are distributed among states on the basis of relative population
under the age of 18. No state may be allowed less than $225,000.
Comments: The President's budget would eliminate funding for the JJDPA
programs (currently funded at $80 million), based upon the perception that the
program's goals have been accomplished. The President did request $7.5 million
to continue a High Risk Youth Program that addresses the problem with gangs
and drugs. There is little opposition to the goals established by the JJDPA,
although there is sentiment that greater flexibility should be built into the law to
account for fiscal and population disparities. Accordingly, justice funding does
not need significant changes from the state perspective, but new conditions
would be objectionable.
CHILD DEVELOPMENT, EDUCATION & TRAINING BLOCK GRANTS
The officers of the NCSL Education and Job Training Committee recommend
blocking programs that total approximately $6 billion into three grants. The
framework for the suggested education blocks is built upon combinations of the
national education goals.
The block grants are designed to achieve three outcomes (NGA language):
1. Children will start school ready to learn (Education Goal 1).
2. Children will complete their school years--in a safe and drug-free environment--
with demonstrated competency in challenging subject areas, especially
mathematics and science (Education Goals 2, 3, 4, 6).
3. Every adult American will be literate and possess the skills necessary to
compete in a global economy (Education Goal 5).
Note: Each block grant should be assured that the same populations now served
would continue to be served.
BLOCK GRANT 1: READINESS FOR SCHOOL
Program
FY91
(in millions)
Child Care Development Block Grant
$732
Child Care Licensing Grants
13
Comments: The governors have added that, because children must be healthy
SO to be ready to learn in school, states should seek to develop strategies to
more effectively integrate health and education programs affecting children.
Health related programs are being dealt with in another block grant proposal.
BLOCK GRANT 2: THE SCHOOL YEARS
Programs
FY91
(in millions)
Chapter 2 Education Block Grant
$449.0
High School Equivalency Program
9.8
JTPA Youth Programs
1,340.0
Drop-out Prevention Demos
32.6
Drug-Free Schools and Community Act
498.0
Vocational Education
856.0
Foreign Language Assistance Program
4.9
Education for the Homeless Youth
Eisenhower Math and Science Grants
202.0
Bilingual Education
168.0
Total
3560.3
Comments: NCSL disagrees with the governors on the inclusion of Bilingual
Education as part of the block grant. NGA would not include this program in the
block grant. We see it as a national program that is attempting to serve scores of
language groups with mixed success. Recent studies show it to be no more
effective at improving English-language proficiency than other methods. We have
always challenged the authority of the federal government to impose a teaching
methodology on states and school districts, as this program does and would
recommend it for inclusion in the block.
Compensatory Education, Even Start and Follow Through are connected
programs aimed at serving the learning needs of educationally disadvantaged
children and their families. It is conceivable that the three programs could be
grouped as a separate mandatory block of some $6.1 billion.
BLOCK GRANT 3: ADULT LITERACY, TRAINING AND LIFELONG LEARNING
Program
FY91
(in millions)
Job Training for the Homeless
$12.7
Literacy Training for the Homeless
9.8
Community Service Employment
for Older Americans state grants
86.0
JTPA Adult Training
1,100.0
JTPA Dislocated Workers
state formula funds
422.0
Adult Education Act
239.0
Vocational Education
856.0
Workplace Literacy Partnerships
19.2
Workplace Literacy
19.3
* Student Literacy Corps
5.4
Total
2,779.4
Comments: NCSL, unlike NGA, would like to see Student Literacy Corps in the
block grant to work like a pass-through as part of a coordinated state-local
community service effort.
AIR AND LAND ENVIRONMENTAL MANAGEMENT BLOCK GRANT
To provide support, and increased flexibility, for state management of air and land
environmental quality programs.
Programs to be included: See list below. These categorical grants are
distributed to states through complicated formulas reflecting a number of factors
including population, the status of state programs, delegation of federal
responsibilities, and the number of regulated facilities of a particular kind (e.g. air
sources in the case of the air grants, hazardous waste facilities in the case of the
hazardous waste grants, etc.)
Program
FY91
(in millions)
Clean air program
$138.0
Public water systems
47.5
Underground injection
10.5
Special studies
4.6
Hazardous waste
82.9
Under. storage tanks
9.0
Pesticide enforcement
15.8
Pesticide program
14.5
Radon program
9.0
Toxics enforcement
5.1
Total
$336.9
Comments: The President's FY 1992 budget includes a total of over $360 million
for these ten separate EPA grants to states for the management of environmental
programs. These grants are for the administration of specific programs like clean
air and hazardous waste, and consolidation would allow states to better prioritize
their efforts to reflect the specific environmental conditions and needs in the state.
This proposal is designed to complement the limited water quality block grant
described earlier.
WATER QUALITY BLOCK GRANT
To provide flexible support for water quality-related planning and constructive
projects. The proposal would allow better coordination of wastewater treatment
plant construction with existing water quality-related planning and management
programs, including categorical programs currently aimed at nonpoint sources,
wetlands, clean lakes planning, and special demonstrations.
Program
FY91
(in millions)
State Revolving Loan Fund
$2,184
Clean Water Management
82
Clean Lakes
8
Nonpoint Source
51
Wetlands
5
104 (b) Special Studies
17
Total
$2,347
Comments: The block grant would eliminate separate applications and allow
better targeting of state water quality programs on high-priority water problems.
In particular, resources could be used more easily to address multifaceted,
related aspects of water quality problems in a specific geographic area by
focusing attention on the natural system to be protected (e.g., a river or estuary)
rather than on its individual components (e.g., the wetlands). Subsequently,
greater flexibility in the use of state revolving funds and management would be
required.
NATIONAL HIGHWAY PROGRAM
To provide for a maximum federal controbution to a national system of roads and
bridges deemed to be of national importance. This block grant would afford
states the opprotunity to invest in each portion of the national system in a
comprehensive manner by removing the constraints of functional classification.
Programs included:
Interstate 4R (non-discretionary only)--funds apportioned by formula (based on
Interstate system lane miles (55%) and vechile miles traveled on Interstate (45%).
Includes 1/2 percent minimum apportionment.
Primary-funds apportioned by following formula: 2/9 - Area; 2/9 Rural Population;
2/9 Rural Postal Delivery Route; and 1/3 Urban Population. (1/2 mimimum
except D.C.)
or
1/2 Rural Population and 1/2 urban population
Authorization) (the larger of the first or second formula is multiplied by total Primary
minimum) Urban System-funds apportioned based on urban area population (with 1/2%
Bridge Rehabilitation-funds apportioned on basis of relative share of total cost of
deficient bridges. (The Interestate Highway Substitution program would be
eliminated and functionally consolidated within this block grant)
Program
FY91
(in millions)
Interstate 4-R
2,529
Primary
2,292
Urban System
727
Bridge Rehabilitation
1,363
Interstate Substitution
541
Total
7,452
Comments: This format for consolidation provides for flexibility in financing a
national system to supplement the Interstate system. The Interstate completion
program would not be incorporated due to the limited number of states which
receive this category of funding. Funds for the programs to be blocked are
currently distributed by apportionment formulas, with discretionary programs
necessarily excluded from this grouping. This arragnement would provide the
greatest opportunity to eliminate Congressionaly intervention following
reauthorization. This would require terminating the use of an "obligation ceiling"
for these programs.
HIGHWAY SAFETY PROGRAM
To consolidate all highway safety programs, including driver and passenger
safety, pedestrian safety, commercial traffic safety, construction safety, vehicle
safety, and corresponding enforcement activities for these programs. To
promote standardization of data and data collections.
Programs included:
State and Community Highway Safety Programs-funds allocated on basis of
eligibility criteria
Highway Safety Program (408,410)-funds allocated on basis of eligibility criteria
Motor Carrier Safety Assistance Program-allocated on the basis of approval of
state programs with 75% federal match
Hazard Elimination- funds apportioned based on 3/4 total population and 1/4
public road mileage
Rail-Highway Grade Crossing-funds apportioned according to following: Area-
1/2, Rural population 1/12, Rural Postal Route 1/12, Urban Population 1/4, Rail-
Highway crossings-1/2 (includes 1/2 minimum apportionment for Urban
population and postal route criteria)
Program
FY91
(in millions)
MCSAP
63
State & Comm (402)-NHTSA
115
State & Comm (402)-FHWA
10
Alcohol Safety (408)
15
Alcohol Safety (410)
5
Rail Safety
42
Hazard Elimination
0
Total
250
Comments: Highway Safety activities are interrelated and should be better
coordinated. The new Highway Safety Block grant would presume the limitation
of existing safety related mandates/sanctions in lieu of a new incentive program.
By consolidating safety programs, states could direct spending to activities which
were most likely to reduce highway injuries and fatalities.
SMALL COMMUNITY AND RURAL ACCESS
To provide support for upgrading transportation facilities and services in states or
regions of states with limited populations and large land areas. Eligible activities
would be intercity public transportation, small community transit systems, off-
system bridges, rural secondary and off-system bridges, rural secondary and off-
system highways (particularly those subjected to higher truck sizes and weights in
order to provide "reasonable access" to the national highway system.
Programs included:
Nonurban Formal Block grants (Section 18)-Funds apportioned by formula based
on relative population; and 1/2 based on relative population weighted by density).
Federal Aid Highways-Rural Secondary-Funds apportioned by formula (1/3 land
area; 1/3 rural population; 1/3 rural postal delivery routes; includes a 0.05
percent minimum).
Federal Aid Bridge Replacement and Rehabilitation-funds apportioned by formula
(based on the state's relative share of the total cost of deficient bridges; includes
a 0.25 percent minimum and a 10 percent maximum). State option to use 10-35
percent of apportionment on bridges off federal aid system.
Program
FY91
(in millions)
UMTA Section 18
$67
Rural Secondary
600
Bridges
245
Total
912
Comments: States would develop appropriate solutions to address mobility and
access needs in rural areas and small communities--whether they involved capital
improvements to facilities, basic preservation and upgrading of roadways and
bridges at lower cost than rebuilding to full federal standards, or providing
intercity or small community public transportation services to improve mobility and
prevent isolation.
METROPOLITAN MOBILITY
To provide support for improving mobility by reducing congestion and upgrading
transportation facilities and services among communities in metropolitan areas
and within urbanized areas with populations under 200,000. Eligible activities
would be public transportation systems and services, bridges on and off the
federal and state systems, and urban street and highway resurfacing and
rehabilitation.
Programs included:
Urban Formula Block Grant (Section 9)- funds apportioned by formula (based on
relative populations; and 1/2 based on relative population weighted by density).
Governor has authority, with local consultation, to reallocate funds for areas under
200,000.
Federal Aid Highways-Urban System-funds apportioned by formula to urban area
over 5,000 in population (based on relative share of urban area population; 1/2
percent minimum). State has programming authority, with local consultation and
cooperation through the planning process.
Federal Aid Bridge Replacement and Rehabilitation-funds apportioned by format
(based on the state's relative share of the total cost of deficient bridges; including
a 0.25 percent minimum and a 10 percent maximum). State option to use 10-35
percent on bridges off federal aid system).
Programs
FY91
(in millions)
UMTA Section 9
$143
Urban Systems
250
Bridges
489
Total
882
Comments: States would develop appropriate solutions to address mobility
needs in small urban areas and among small and medium communities. These
could include capital improvements to facilities, basic preservation and upgrading
of roadways and bridges at lower cost than rebuilding to full federal standards, or
providing intercity or small community public transportation services to improve
mobility by reducing congestion.
National Conference of State Legislatures
Suggested Programs for Block Grants
Estimated Funding
Function
FY 91 ($millions)
Agriculture
EXTENSION SERVICE
General Formula Programs
253
D.C. Extension
1
Water Quality
10
Youth at Risk
8
Food Safety
2
Low Income Nutrition
61
Pesticide Management
8
Pesticide Impact Assessment
3
Farm Safety
2
Urban Gardening
4
Financial Management
0
Indian Reservation Agents
1
Rural Development Centers
1
Renewable Resources
3
Disadvantaged Farm Assistance
3
Federal Administration
9
RURAL DEVELOPMENT
FmHA Water & Waste Disposal
500
FmHA Community Facility
100
Rural Development Loan Fund
32
FmHA Water & Waste Disposal
35
FmHA Business & Industry
100
FmHA Community Facility
25
FmHA Water & Waste Disposal
301
Rural Development
21
Fire Protection
4
Solid Waste Mangement
2
Rural Development Councils
0
Subtotal
1,486
Criminal Justice
Drug Control
499
Juvenile Justice
80
Subtotal
578
Child Development, Education and Training
READINESS FOR SCHOOL
Child Care Development Block Grants
732
Child Care Licensing Grants
13
Subtotal
745
THE SCHOOL YEARS
Chapter 2 Education Block Grant
449
High School Equivalency Program
10
JTPA Youth Programs
1,340
Page 1
National Conference of State Legislatures
Suggested Programs for Block Grants
Estimated Funding
Function
FY 91 ($millions)
Drop-out Prevention Demos
33
Drug-Free Schools & Communities Act
498
Vocational Education
856
Foreign Language Assistance
5
Education for the Homeless Youth
Elsenhower Math & Science
202
Bilingual Education
168
Subtotal
3,560
ADULT LITERACY, TRAINING & LIFELONG LEARNING
Job Training for the Homeless
13
Literacy Training for the Homeless
10
Community Service Employment
86
JTPA Adult Training
1,100
JTPA Dislocated Workers
422
Adult Education Act
239
Vocational Education
856
Workplace Literacy Partnerships
19
Workplace Literacy
19
Student Literacy Corps
5
Subtotal
2,769
Environment
AIR & LAND ENVIRONMENTAL MANAGEMENT
Clean Air
138
Public Water System
48
Underground injection
11
Special Studies
5
Hazardous Waste
83
Under Storage Tanks
9
Pesitcides Enforcement
16
Pesticide Program
15
Radon Program
9
Toxics Enforcement
5
Subtotal
337
WATER QUALITY BLOCK GRANT
State Revolving Loan Fund
2,184
Clean Water Management
82
Clean Lakes
8
Nonpoint Source
51
Wetlands Program
5
104 (b) Special Studies
17
Subtotal
2,346
Transportation
NATIONAL HIGHWAY PROGRAM
interstate 4-R
2,530
Primary
2,292
Page 2
National Conference of State Legislatures
Suggested Programs for Block Grants
Estimated Funding
Function
FY 91 ($millions)
Urban System
727
Bridge Rehabilitation
1,363
Interstate Substitution
541
Subtotal
7,453
HIGHWAY SAFETY PROGRAM
MCSAP
63
State & Comm-NHTSA
115
FHWA
10
Alcohol Safety
15
Alcohol Safety
5
Rail Safety
42
Hazard Elimination
0
Subtotal
250
SMALL COMMUNITY & RURAL ACCESS BLOCK GRANT
UMTA Section 18
67
Rural Secondary
600
Bridges
245
Subtotal
912
METROPOLITAN MOBILITY BLOCK GRANT
UMTA Section 9
143
Urban Systems
250
Bridges
489
Subtotal
882
TOTAL
21,318
Page 3
COMPARISON OF BLOCK GRANT PROPOSALS
NCSL, NGA, AND THE PRESIDENT'S ORIGINAL PROPOSAL
AGRICULTURE
Extension Service Block Grant
NCSL
NGA
President's Proposal
Smith-Lever 3
Smith-Lever
DC Extension
Water Quality
Water Quality
Youth At Risk
Youth at Risk
Food Safety
Food Safety
Low-Income Nutrition
Pest Management
Pesticide Impact Assessment
Pesticide Impact Assessment
Farm Safety
Farm Safety
Urban Gardening
Urban Gardening
Financial Management
Indian Reservation Agents
Rural Development Centers
Renewable Resources
Disadvantaged Farm Assistance
Federal Administration
Food/Nutrition
$366 million
$348.7 million
Rural Economic Development
NCSL
NGA
President's Proposal
FmHA Water & Waste Disposal
FmHA Water & Waste Disp.
FmHA Community Facility
FmHA Community Fac.
Rural Development Loan Fund
Rural Development Loan
FmHA Water & Waste Disposal
FmHA Water & Waste Disp.
FmHA Business & Industry
FmHA Business & Ind.
FmHA Community Facility
FmHA Community Fac.
FmHA Water & Waste Disposal
FmHA Water & Waste Disp.
Rural Development
Rural Development
Fire Protection
Fire Protection
Solid Waste Management
Solid Waste Management
Rural Development Councils
Rural Development
$1,120 million
$1,120 million
Page 1
National Conference of State Legislatures
April 1991
CHILD DEVELOPMENT. EDUCATION & TRAINING
Readiness for School
NCSL
NGA
President's Proposal
Child Care Development
Child Care Developing
Child Care Licensing Grants
Child Care Licensing Grants
Education for the Handicapped
Head Start
Maternal & Child Health
Immunization
Lead Poisoning Prevention
$745 million
$6,027 million
The School Years
NCSL
NGA
President's Proposal
Chapter 2
Chapter 2
Chapter 2
High School Equivalency
High School Equiv.
JTPA Youth Programs
JTPA Youth
Drop-out Prevention Demos
Drop-Out Prevent.
Drug-Free Schools & Communities
Drug-Free Schools & Comm.
Vocational Education
Vocational Education
Foreign Language
Education of Homeless
Education of Homeless
Eisenhower Math & Science
Eisenhower Math & Science
Bilingual Education
Follow-through program
Education for the handicapped
Impact Aid
Supp. Educational
Opportunity grants
Public Library programs
$3,560 million
$6,163 million
$1,893 million
Adult Literacy, Training, & Lifelong Learning
NCSL
NGA
President's Proposal
Job Training for Homeless
Job Training for Homeless
Literacy Training for the Homeless
Literacy Training for Homeless
Community Service Employment for
Community Service Employ.
Older Americans
Older Americans
JTPA Adult Training
JTPA Adult Training
JTPA Dislocated Workers
JTPA Dislocated Workers
Adult Education
Adult Education
Workplace Literacy Partnership
Workplace Literacy Part.
Workplace Literacy
Workplace Literacy
Student Literacy Corps
Student Literacy Corps
Page 2
National Conference of State Legislatures
April 1991
Vocational Education
Food Stamp Employ & Train
$2,769 million
$1,983 million
CRIMINAL JUSTICE
Criminal Justice
NCSL
NGA
President's Proposal
Drug Control System Improvement
Juvenile Justice & Delinquency
Byrne Memorial State & Local
law enforcement assistance
$578 million
$490 million
ENVIRONMENT
Air & Land Environmental Management
NCSL
NGA
President's Proposal
Clean Air
Public Water Systems
Underground Injection
Special Studies
Hazardous Waste
Underground storage tanks
Pesticide Enforcement
Radon Program
Toxics Enforcement
$337 million
Water Quality
NCSL
NGA
President's Proposal
EPA State Revolving Loan Fund
EPA State Revolving Loan Fund
EPA State Revolving Loan Fund
Clean Water Mgmt.
Clean Water Mgmt.
Clean Lakes
Clean Lakes
Non-point Source
Non-point Source
Wetlands Programs
Wetlands Programs
104 (b) Special Studies
104 (b) Special Studies
Page 3
National Conference of State Legislatures
April 1991
Agricultural Stabilization
Conservation Serv. Ag.
Conserv. Cost Share
Agricultural Stabliz.
Conservation Serv.
Wetlands Reserve
Agricultural Stabiliz.
Conservation Service
Water Bank Program
$2,347 million
$2,551 million
$2,184 million
TRANSPORTATION
A. National Highway Program
Interstate 4-R
Interstate Substitution
Highways - Primary
Bridges - Primary
Highways - Urban
B. Highway Safety
MCSAP
State & Comm (402) NHTSA
State & Comm (402) FHWA
Alcohol Safety (408)
Rail Safety
Hazard Elimination
C. Small Community & Rural Access
Highways - Rural Secondary
Bridges - Rural
Nonurban Formula (Section 18)
D. Metropolitan Mobility
Highways - Urban (non-attributable funds)
Bridges - Urban
Nonurban Formula (Section 9)
$9,507 million
Administrative Block Grant
NCSL
NGA
President's Proposal
Medicaid
Medicaid
AFDC
AFDC
Food Stamps
Food Stamps
Social Services
Page 4
National Conference of State Legislatures
April 1991
LIHEAP
$9,588 million
OTHER PROGRAMS INCLUDED IN ADMINISTRATION PROPOSAL
The following programs were included in the list originally released as part of the Administration Budget Proposal, but
have not been included in either the NCSL or NGA proposals.
A. Education:
Impact Aid Payments
Supplemental Education Opportunity Grants
Public Library Services Programs
B. Health and Human Services:
Social Services Block Grant
Low-Income Home Energy Assistance Program
C. Housing and Urban Development:
Selected Public and Subsidized Housing Programs
Community Development Block Grants
Page 5
FEB 20 '91 03:30PM NAT'L GOVERNORS ASSOCIATION
P.2/11
NATIONAL
i
Booth Gardner
Raymond C. Scheppach
Governor of Washington
Executive Director
Chairman
GOVERNORS
Hall of the States
John Ashcroft
444 North Capital Street
ASSOCIATION
Governor of Missouri
Washington. D.C. 20001-1372
Vice Chairman
Telephone (202) 624-5300
STATEMENT OF
GOVERNOR JOHN ASHCROFT
STATE OF MISSOURI
BEFORE THE
BUDGET COMMITTEE
U.S. SENATE
HEARING ON BLOCK GRANTS
FEBRUARY 20, 1991
FEB 20 '91 03:31PM NAT'L GOVERNORS ASSOCIATION
P.5/11
Because there is a new premium on integrating services, a new block
grant would be even more effective today. Problems do not respect
agency or program lines. Reducing infant mortality, improving school
performance, strengthening families, reducing teenage pregnancy, and
improving the quality of our workforce all require a range of services
that cut across current agency and program lines. While states
recognize the need to better integrate and coordinate services, such
efforts are often complicated by the eligibility and programmatic
limitations of narrow categorical programs.
In Missouri, we are attempting to restructure the delivery of services
to children. Our task is much more complicated because restrictive
federal grant programs lack the flexibility to best meet the needs of
our children.
There is, for example, a clear consensus that preventing dropouts
requires significant changes in school curriculum. However, it may
also require programs such as day care for teenage mothers, health and
social service programs to reduce teen pregnancy, child protective
services to deal with the problem of abusive parents, drug or alcohol
treatment, or part-time employment or some other program to facilitate
the transition from school to work. Under current federal grants,
each of these services is authorized separately, and several of the
individual services may be funded from more than one categorical
grant. Some are limited by the type of service that can be provided.
Others are limited by geographic area, financial eligibility criteria,
or the agency that can receive or administer the money.
FEB 20 '91 03:30PM NAT'L GOVERNORS ASSOCIATION
P.3/11
Mr. Chairman, I am happy to be here today to discuss the block grant
proposal submitted in President Bush's budget. The major points of my
statement are as follows:
First, the nation's Governors support the block grant concept
and we appreciate the willingness of Congress and the
administration to include us in the design of the block grant.
Second, the states have ten years of successful experience
administering block grants created by the Omnibus Budget
Reconciliation Act of 1981. So we are not embarking on a
risky or untried course in working together to fashion yet
another block grant.
Third, the National Governors' Association will be ready by
the second week of March to recommend programs to be included
in the block grant.
Fourth, we are eager to go beyond the block grant concept to
build a stronger federal-state partnership.
The National Governors' Association has responded positively to the
President's concept of turning over at least $15 billion in federal
programs in a block grant to states. We believe this would represent
another important step in improving the partnership between the federal
government and state governments. If enacted, a block grant should
provide for more effective and efficient program delivery at the state
level. My fellow Governors and I are particularly pleased that
Congress and the administration have reached out to us to build an
FEB 20 '91 03:30PM NAT'L GOVERNORS ASSOCIATION
P.4/11
improved federal-state partnership. Our citizens cannot help but
benefit when we work together. In addition to this hearing, the
Speaker of the House and the bi-partisan House leadership met with the
NGA Executive Committee and displayed a willingness to work with us
toward program consolidation. In a later visit to my office the
Majority Leader of the House assured me of the House leadership's
sincerity in discussing this proposal.
The BLOCK GRANT CONCEPT
The block grant concept is another important step in an improved
federal-state partnership because it is not the first step and we hope
it will not be the last. In the Omnibus Budget Reconciliation Act of
1981, Congress eliminated fifty-nine grant programs and consolidated
nearly eighty narrowly focused categorical grant programs into nine
broad-based block grants. In the process, more than 600 pages of
federal regulations were reduced to fewer than a dozen. The states now
have more than ten years of successful administration of block grants.
While there certainly were funding problems in 1981 that appear absent
in the current proposal, Congress knew then what it recognizes today
with the block grant proposal -- that moving decisionmaking closer to
the citizens can improve service delivery.
FEB 20 '91 03:31PM NAT'L GOVERNORS ASSOCIATION
P.6/11
This fragmentation often means that people do not receive the
combination of services they need to overcome their problems.
Investments in one area may be largely ineffective without critical
support from another program or agency. This is a result both of
different eligibility criteria and of the barriers that both recipients
and service providers face.
A prime example of lack of flexibility in Missouri is that social
service caseworkers must document by fifteen minute intervals the time
spent for individual Medicaid, AFDC, and food stamp cases. Even though
all these programs often are administered to a single individual by the
same caseworker, separate files - noting each fifteen minutes of work
are kept for each program. This results in duplicate paperwork and
consumes hours of caseworkers' time. We need a new approach that
allows us to serve the citizens instead of the system. A new block
grant approach can achieve that goal.
DEVELOPING THE GOVERNORS' RECOMMENDATION
The National Governors' Association plans to submit a block grant
proposal to Congress and the administration by the second week in
March. We plan to work jointly with the National Conference of
State Legislatures to develop the proposal. The Governors'
recommendation will follow A set of guidelines that will maximize
program efficiency as follows:
FEB 20 '91 03:32PM NAT'L GOVERNORS ASSOCIATION
P.7/11
The programs selected should have some broad degree of
commonality.
Programs should be either categorical grants to state
governments or project/competitive grant programs in which
states currently receive the majority of the funds awarded;
the Governors are not interested in including grants such as
the local portion of the CDBC, that are currently targeted to
local government.
Priority should be given to those grants that currently have
unduly limiting mandates and overly detailed administrative
regulations.
Programs selected should generally be national in scope and
not those that primarily benefit selected regions and states.
There currently are more than 475 categorical grants to state and local
government -- seventy-six in elementary, secondary and vocational
education; sixty-nine in social services; and sixty-one in health
care. Clearly there are considerable opportunities to consolidate many
of these grants to increase services to our citizens.
While most Governors respond positively to the concept of a block
grant, there is also some concern that the grant may be cut over time.
Funding should be driven by the needs of the programs not by the type
of the grant. States should not be expected to pursus program
objectives without continued financial commitment from the Congress.
FEB 20 '91 03:32PM NAT'L GOVERNORS ASSOCIATION
P.8/11
MEDICAID: A FEDERAL-STATE PARTNERSHIP
I have shared with you the nation's Governors' support for the block
grant concept, the successful experiences states have had in
administering federal block grants, and the timetable for response from
the National Governors' Association on a proposed block grant. My last
point addresses the Governors' desire to go beyond the block grant
concept to improve the federal-state partnership.
In summer 1989, the National Governors' Association passed a resolution
calling for a two-year moratorium on new federal Medicaid mandates so
that there would be more time to implant the expansions already
passed. Despite the Governors' united plea, Congress continued to
mandate Medicaid expansions. In fiscal 1990 alone, Medicaid spending
by all states increased by 18.4 percent to $61.4 billion and consumed
12 percent of the state budgets. That made Medicaid second only to
education as the biggest expenditures in state budgets. For this year
Medicaid is now projected to be up about 25 percent.
The Missouri experience is common to most states. While our general
revenue collections have increased an estimated 55 percent in the last
six years, Missouri general revenue spending for Medicaid has increased
131 percent in the same time period. Often we are forced to cut
optional services to fund mandates which means that we are giving up
preventative services to fund lower risk individuals. Medicaid
mandates are outstripping the growth in state revenues. Since the plea
to Congress in 1989 for no more new Medicaid mandates, fourteen more
Medicaid mandates have been enacted. The added Medicaid mandates in
fiscal 1991 and fiscal 1992 alone will require an $111.1 million
increase in Missouri general revenue.
FEB 20 '91 03:33PM NAT'L GOVERNORS ASSOCIATION
P.9/11
While many of these expansions have worthwhile goals, the major and
cumulative expense to both state and federal governments poses a
significant opportunity cost for states and the nation. There is
simply less revenue to spend on education, children, and other state
services as health care costs spiral upward. Some of the mandated
changes merely shift Medicaid costs to states without providing any
additional services.
States are facing the toughest fiscal situation since the 1982
recession. More than thirty states will have deficits if they are not
able to reduce spending or increase revenues before the end of fiscal
1991. The National Governors' Association adopted a policy at their
meeting in Washington two weeks ago that the Governors "should be full
partners" in developing national domestic policy to address the
nation's immediate concerns and develop blueprints for renewed economic
growth and a better quality of life. We think a block grant proposal
is one important step in that partnership. Another important step is a
moratorium on any new federal mandates, increases in state matching
ration, and shifting of costs to your already overburdened partners in
the state capitals.
I would be happy to answer questions.
FEB 20 '91 03:33PM NAT'L GOVERNORS ASSOCIATION
P.10/11
Hall of the States
NATIONAL
444 North Capitol Street
GOVERNORS
Washington, D.C. 20001-1572
Telephone (202) 624-5300
ASSOCIATION
FOR IMMEDIATE RELEASE
February 20, 1991 (38-91)
Contact: Rae Young Bond, 202/624-5330
GOVERNORS EXPRESS SUPPORT FOR BLOCK GRANT CONCEPT,
URGE STRONGER FEDERAL-STATE PARTNERSHIP
WASHINGTON, D.C. -- Citing the states' successful experience in
administering block grants, NGA Vice Chairman John Ashcroft of
Missouri today said the governors support the concept of turning
over some federal programs to the states through a single block
grant.
Speaking before the Senate Budget Committee, Gov. Ashcroft said
the governors "are particularly pleased that Congress and the
administration have reached out to us to build an improved
federal-state partnership."
The governors will be ready by the second week of March to
recommend programs to be included in the block grant, he said.
The National Governors' Association will work closely with the
National Conference of State Legislatures to develop the proposal,
along the following guidelines:
The programs selected should have some broad degree of
commonality.
Programs should be either categorical grants to state
governments or project/competitive grant programs in which
states currently receive the majority of the funds awarded.
The Governors are not interested in including grants that are
currently targeted to local government, Gov. Ashcroft said.
Priority should be given to those grants that currently have
unduly limiting mandates and overly detailed administrative
regulations.
Programs selected should generally be national in scope and not
those that primarily benefit selected regions and states.
"There currently are more than 475 categorical grants to state
and local government - 76 in elementary, secondary, and vocational
education; 69 in social services; and 61 in health care. Clearly
there are considerable opportunities to consolidate many of these
grants to increase services to our citizens," Gov. Ashcroft said.
-
FEB 20 '91 03:34PM NAT'L GOVERNORS ASSOCIATION
P.11/11
Page 2
"While most governors respond positively to the concept of a block grant,
there is also some concern that the grant may be cut over time. Funding
should be driven by the needs of the programs, not by the type of the grant.
States should not be expected to pursue program objectives without continued
financial commitment from the Congress," he told the committee.
Governor Ashcroft outlined the states' ten years of experience in
administering block grants and coordinating services. The states'
administration of the block grants has enabled the states to coordinate
services to address such cross-cutting issues as infant mortality, education,
teen pregnancy, and workforce quality, he said. Most important, he said,
moving decisionmaking closer to the citizens can improve service delivery.
"A prime example of the lack of flexibility in Missouri is that social
service caseworkers must document by 15-minute intervals the time spent for
individual Medicaid, Aid to Families with Dependent Children, and Food Stamp
cases. Even though all these programs often are administered to a single
individual by the same caseworker, separate files -- noting each 15 minutes of
work - are kept for each program. This results in duplicate paperwork and
consumes hours of caseworkers' time," the Missouri Governor said.
"We need a new approach that allows us to serve the citizens instead of
the system," he said. "A new block grant approach can achieve that goal."
However, Gov. Ashcroft said that while the block grant proposal is "one
important step" in an improved federal-state partnership, "an equally
important step is a moratorium on any new federal mandates, increases in state
matching ratios, and shifting of costs" to states. States are facing the
toughest fiscal situation since the 1982 recession, he said, and simply cannot
afford additional mandates in the Medicaid program, which is now second only
to education as the biggest expenditures in state budgets.
"There is simply less revenue to spend on education, children, and other
state services as health care costs spiral upward," he said.
-30-