Ask the Scholar
Document scope · 1 page
Scholar
Ask about this object, its catalog metadata, its source description, or the page inventory.
For page-specific OCR and visual context, open one of the page chats.
Scholar Source Context
Document identity
localId
216887065
label
Block Grants [2]
core
doc
dtoType
document
citationUrl
pageCount
1
Source metadata
id
216887065
contentType
document
title
Block Grants [2]
citationUrl
collections
Records of the Domestic Policy Council (Clinton Administration)
Michael Cohen's Subject Files
largeImageUrl
imageCount
1
hasImages
yes
source
import
hasTranscription
no
Source extras
naId
216887065
levelOfDescription
fileUnit
otherTitles
7763316-20120160S-001-015-2013
recordType
description
ocrSource
nara-archive
Single page context
seq
1
pageIndex
0
type
document
mediaId
0e7ef7a605b7fd3c
ocrText
Commence
Comments on NGA proposals:
Major Areas of Concern:
1. Different approach to program consolidation re: education and
training programs:
Even Start (Ready to Learn)
Perkins (Ed Reform)
School to Work (Discretionary)
Pell Grants (Workforce Development) -note consistent
with Administration proposal, for which we can find no
support elsewhere
2.
IDEA
Ready to Learn
Workforce Development (Voc. Rehab)
3.
Ed REform/Youth Development
Title 1--separate from ed reform--because important to
target to LEA's with needy kids; blocking at state
level would undermine fundamental purpose of this
program, and risk cuts
Safe and Drug Free Schools (Youth Development)
threatened in its entirety by House recission
newly reauthorized--focuses on the first time on
safety in schools as well as drugs--MAJOR PUBLIC
CONCERN
important to drive this to schools, to address
problems in schools and let schools participate in
broader communitywide efforts
would fit better in reform block than in community
block
Overall caution on block grant for el/sec programs (my
own views, not widely discussed in admin/ed)
create sig. pressure for greater federal
involvement in state academic and performance
standards, as progress on these measures becomes
tied to larger amounts of federal funds
Easy to accept wide range of approaches, and
untried/untested approaches still under
development under Goals, with 1/3-1/2 c
investment; Title 1 is more prescriptive
initial experience with Goals suggests states and
feds have much to learn about plans, and
benchmarks/timelines for accountability--lets go
slow and learn together, without high stakes.
best course of action is to make new programs work,
using to the maximum the authority we have to provide
flexibility, tailor to state and local needs, etc. RWR
flexibility letter in January--great interest in states
in consolidated plans, edflex, etc.
In the context of NPR II discussions within the
Administration, we are moving in the direction of
perforamnce partnerships:
--clear national purpose and priority
--agreement on goals and objectives
--funds and flexibility tied to performance
--fed/state/local government partners in design
Perkins voc-ed proposal exemplifies this--Trish McNeil, Deputy
Ass't Secy for Adult and Voc. Ed. will describe
Jennefir Dans
Susan Frust
Trish McWeil
MEETING WITH DEMOCRATIC GOVERNORS' DC OFFICES
BLOCK GRANTS
1. Pleased to begin conversation
o
want to share our thinking, as well as listen to your
own
O
short amount of time to cover a lot of ground--hope
this is the first of a number of such discussions over
the coming months
2. Where we are
History
o
last Congress accomplished a lot in education,
especially in elementary and secondary areas:
--Goals 2000--framework
--IASA/ESEA/Title 1
--STW- Janth with DOL
o
these programs already built on key principles front
and center in current discussions of block grants:
--focus on performance--emphasis on challenging
standards
--flexibility--broad framework, waivers, edFlex,
no/limited regs, schoolwide project, consolidated
planning
--accountability for results--Title 1, Goals
(benchmarks and timelines)
--fed/state/local partnerships--in which federal
dollars are used to support state and local reform
approaches
Current view
o
We approach current discussions about block grants with
a mixture of sympathy and concern:
--flexibility and accountability for results right in
line with our own principles
--real concern over funding implications, especially
for this Administration's committment to investing in
education and training
--history of block and cut, real intent of R's
--declining funding in subsequent years (Chapter
II) (probably with increased micromanagement as
well)
--net effect of fewer $ for real needs is less
rather than more flexibility.
In the elementary and secondary areas we have already
dealt with, we do not intend (at this time) to advance
our own (block grant) proposals. Instead, we think the
NATIONAL
Howard Dean. M.D.
Raymond C. Scheppach
Governor of Vermont
Executive Director
GOVERNORS
Chair
ASSOCIATION
Hall of the States
Tommy G. Thompson
444 North Capitol Street
Governor of Wisconsin
Washington. D.C. 20001-1512
Vice Chair
Telephone (202) 624-5300
March 1, 1995
MEMORANDUM
To:
Balanced Budget SAC
Bob Rogan, Vermont
Mary Sheehy, Wisconsin
Alan Salazar, Colorado
Liz Ryan, Delaware
Charlie Steele, Massachusetts
Ed Tobin, Massachusetts
LeAnne Redick, Michigan
Brad Douglas, Missouri
Jill Friedman, Missouri
Ted Hollingsworth, Ohio
Tom Needles, Ohio
Joanne Snow Neumann, Utah
LaVarr Webb, Utah
Judy Margolin, West Virginia
From: Ray Scheppach
Re:
Block Grants
Attached is a revised draft of the proposed block grant paper. There are a number of important
changes in this draft. First, the transportation grant has been dropped from inclusion. Second, head
start has been dropped from the Ready to Learn grant. Third, we have incorporated the NGA policy,
rewritten the first section, and have placed the specific proposals in an appendix.
One question that I would like the task force to focus on is the structure of how the individual
proposals are described. The current draft describes the purposes in the body of the report, but
duplicates the information in the appendix. An alternative is to drop the purpose section in one of the
two places, i.e., page 5-6 or in the individual descriptions.
I would like us to meet on Tuesday, March 7 from 1:30 p.m. to 2:30 p.m. in room 385 of the Hall of
the States for a discussion of this latest draft.
03/28/95
16:10
2026245855
MAR - 28-95 15:56 FROM: MO Washington DC off
ID: 202 624 5855
PAGE 1
DRAFT -- FOR COMMENT ONLY
Options to Consolidate
Federal Categorical Grants
to States
March 1, 1995
National Governors' Association
Staff Paper
03/28/95
16:10
2026245855
MAR-28-95 15:56 FROM: MO Washington DC off
ID: 202 624 5855
PAGE 2
DRAFT - FOR COMMENT ONLY
Table of Contents
Page
I.
Introduction
I
II.
Block Grants - A Federalsim Context
I
III.
Block Grants - The Policy Context
1
IV.
Background
2
V.
Block Grants - A Staff Proposal
4
A. The National Purpose
4
1. Ready to Learn
4
2. Youth Development
5
3. Children and Family Services
5
4. Education Reform
5
5. Education Discretionary
5
6 Crime Control and Corrections
5
7 Health Services
5
8 Public Health and Prevention
6
9 Substance Abuse Prevention and Treatment
6
10 Mental Health Systems and Treatment
6
11 Health Professions
6
12 Aging Services
6
13 Affordable Housing
6
14 Community and Economic Development
7
15. Agricultural Research and Extension Services
7
16 Environmental Mandates Assistance
7
17 Environmental Program Management Grants
7
18 Agriculture Conservation Programs A Partnership
7
19 Workforce Development
7
B. Program Consolidation or Elimination
7
C. Determining the National Investment
8
D. Establishing Performance Expectations and Standards
8
E. Determining the Interstate Allocation of Federal Funds
9
VI.
Next Steps
9
APPENDICIES
A Program Consolidation and Eliminations
B NGA Federalism Policy
C NGA Policy on Principles to Guide the-Restructuring of the Federal-State Parntership
03/28/95
16:11
2026245855
MAR-28-95 15:56 FROM: MO Washington DC off
ID: 202 624 5855
PAGE 3
DRAFT FOR COMMENT ONLY
I.
Introduction
The purpose of this paper is to begin a dialogue with federal officials regarding the simplification and
rebalancing of the federal system. It presents the National Governors' Association's positions regarding
the conversion of current federal categorical non-entitlement grant-in-aid programs into a system of
broad block grants. In addition, to provide illustrations of how these principles might be incorporated
into specific programs, it outlines a series of possible block grants organized around a set of national
purposes. It also suggests the current programs that might be terminated to provide the moneys needed
to fund the possible block grants.
While the policies reflect the formal views of the Governors, the possible proposals and suggested
funding sources do not. Those proposals have been prepared by NGA staff in general consultation with
state staff. They are intended as a starting point for discussions between the states and the federal
government, and are subject to significant modification as specific proposals are further developed and
discussed. NGA endorsement of any specific block grant proposal will require the adoption of interim
policy.
It is important to note that at its 1995 Winter Meeting, the National Governors' Association adopted
policy that states: "Governors have not yet reached agreement on whether cash assistance and other
entitlement assistance should remain available as federal entitlements or whether it should be converted
to state entitlements." As a result, the principles and proposals discussed here relate solely to categorical
non-entitlement grant programs.
II.
Block Grants A Federalism Context
Historically, the Governors have considered four different approaches to the simplification of the federal
grant in aid system. Those approaches are:
broad block grants to support state and local activities in selected areas
consolidation of federal discretionary programs
turnbacks of tax resources and program responsibility
sorting out of federal and state and local responsibilities
Each of these approaches has merits, and the rebalancing of the federal system demands a willingness to
explore a broad range of alternatives. No single approach is appropriate for the full range of federal
programs and interests. However, it is clear that block grants are an important tool that needs further
development and discussion.
III.
Block Grants The Policy Context
At the 1995 Winter Meeting of the National Governors' Association, the Governors adopted new policy
regarding the restructuring of the federal system. That policy stated:
"The simplification of the current categorical, non-entitlement federal grant-in-aid system must also be a
Congressional priority. Governors have argued that such simplification would both increase
administrative efficiency and encourage state efforts to develop more effective programs.
"The history of block grants is long, going back at least to general revenue sharing and the broad block
grants of the Nixon era. Block grants were also an important part of the Reagan "New Federalism" of
1
03/28/95
16:11
2026245855
MAR-28-95 15:57 FROM: MO Washington DC off
ID: 202 624 5855
PAGE 4
DRAFT FOR COMMENT ONLY
the 1980s. At that time the consolidation of programs also came with funding cuts. While block grant
proposals have generally begun with a theme of simplification and consolidation, the actual legislation
has often retained significant federal restrictions. Equally important, over time the federal government
has tended to establish additional set-asides and place new restrictions within the block grants that have
been established. Future reforms must address these problems.
"Governors believe that such consolidations must:
Recognize the national interest in protecting and serving children.
Include a clear definition of national purpose and national objectives.
Avoid set-asides or other prescriptive conditions of federal funding.
Include significant transferability of funds between the block grants.
Preclude cost shifts to the states.
Be consistent with the way in which state governments deliver services to their citizens.
Incorporate distribution formulations consistent with the distribution implicit in existing categorical
programs.
Allow the flexibility needed to maximize efficiency and to minimize the expansion of state
government employment."
IV.
Background
The American Federal System established a strong union while preserving the diversity reflected in the
individual states. State and local governments governments close to the people - provide the needed
opportunities for flexibility and innovation. By their decentralization of decisionmaking and responsive
nature, they encourage citizen participation and support.
Although there is a clear need for a national role in a variety of domestic issues, the principles of local
determination and diversity require a careful balance of federal and state roles. It is vital to ensure that
states have the authority and flexibility needed to respond to the needs and priorities of those who live
within their boundaries.
Over the past several decades, that balance has become threatened as the federal government has
attempted to implement its role through an increasingly complex and prescriptive system of grants in aid.
While many of these grant programs address legitimate national purposes and federal concerns, the
structure of the programs reduce state and local flexibility their accountability to the electorate.
In its permanent policy on federalism adopted in 1993, the National Governors' Association states:
"Steps also must be taken to overcome the imbalance that has resulted from the rapid expansion of
federal programs in the past. The proliferation of detailed federal programs must be ended, and states
must be given greater flexibility in policymaking. Toward these ends, the following changes are
recommended.
The number of joint federal-state programs should be reduced by a sorting out of responsibilities
between the two levels of government.
Where federal programs are to be maintained, grant conditions should not be used to force state
program changes not related to the specific program purposes for which the grant is provided, and
federal funding should not require state or local matching funds.
Federal regulations should rely on state laws and procedures for the administration of federal
programs.
2
03/28/95
16:12
2026245855
MAR-28-95 15:57 FROM: MO Washington DC off
ID: 202 624 5855
PAGE 5
DRAFT- FOR COMMENT ONLY
American's deserve a government that is both cost effective and responsive. The consolidation and
simplification of current categorical grants programs into a few broad block grants will truly enable
states to reinvent government services in a manner that will:
ensure that the investment of government resources will address local priorities
focus investments on programs that produce measurable results
eliminate programs that are not cost effective
invest in prevention as well treatment
reflect the unique characteristics of each community
involve communities and program participants in program development and administration
build on the strengths of all sectors - government, non-profit, and business
eliminate unnecessary administrative overhead
reduce the proliferation of government programs and bureaucracies
allow for the better coordination of services
reduce red tape and other obstacles for those in need of service
The implementation of this vision requires hard work and dedication. There are a number of important
programmatic, financial, and political issues that must be resolved. They include:
defining the national purpose
identifying programs for consolidation or elimination
determining the national investment
establishing performance expectations and standards
determining the interstate allocation of funds
Each of these elements is discussed in the sections that follow.
V.
Block Grants - A Staff Proposal
A. The National Purpose
Block grants provide a vehicle for the federal government to assist states and localities meet high priority
domestic needs that they would otherwise be unable or unlikely to accomplish. The first step in
developing a system of block grants is to determine the national purposes that should structure such a
system. Clearly there are a variety of approaches, and the ultimate choice will depend upon a number of
programmatic and political factors. However, to provide a structure for possible discussions, the NGA
staff have identified seventeen major programmatic or functional areas for consideration. Those areas,
and the national purposes they address are outlined in the materials that follow.
1. Ready to Learn. The Ready to Learn block grant is designed to provide flexible funding to
support state efforts to ensure that all children, including those at risk of poor outcomes, are mentally,
physically, and emotionally prepared for formal learning and to help ensure their success in later life.
Specific activities covered would include services that promote healthy births for all children, enhance
parents' ability to be their child's first teacher, enhance parents' and other caretakers' ability to provide
stable and caring environments, and promote the health and well-being of all young children. (See
unresolved issues.)
4
03/28/95
16:12
2026245855
MAR-28-95 15:58 FROM: MO Washington DC off
ID: 202 624 5855
PAGE 6
DRAFT -- FOR COMMENT ONLY
2. Youth Development. This grant would provide a base level of funding to states to support a
continuum of developmentally appropriate activities that promote the social development of youth and
facilitate their preparation for careers and lifelong learning. These activities will build the competencies
of young people, while respecting the dominion of the family, fostering scholastic achievement,
promoting self-reliance, and cultivating positive peer interactions. The range of activities to be funded
may include school-, community- and work-based experiential learning, mentioning, community service,
crisis intervention, and structured recreation and cultural activities during non-school-hours. These
activities and services would be fully blended into comprehensive community-wide strategies that would
enable all young people (in-school and out) to develop the knowledge, skills, attitudes, and values
needed to successfully make the transition from childhood to productive adulthood: (See unresolved
issues.)
3. Children and Family Services The Children and Family Services block grant is designed to
provide funding to assist states in developing programs for intervention and follow-up services for
children and families who are experiencing crisis. Specific activities covered would include services
designed to strengthen parents ability to care for their children such as family support and preservation
and parenting education; services to secure permanent homes for children; services to care for children
who cannot remain in their home; and services to reduce violence in families.
4. Education Reform. To promote state-based systemic reform of the nation's education system
by providing a single federal grant that can be coordinated with new and existing state reform efforts.
The funds would be directed through the state planning panel to the appropriate states agencies and local
school districts who would in turn spend the monies in accordance with the state's education reform
plan. Funds would be used for capacity building and to provide direct services to primarily elementary
and secondary education students. If provided for under the state plan, the a portion of the funds could
be used to support the transitional programs for pre-school students, such as those students enrolled in
programs such as Head Start and other early intervention programs.
5. Education Discretionary. To provide the Secretary of Education with the discretionary funds
to support programs of national significance and help improve educational quality and support for special
populations.
6. Crime Control and Corrections. Crime control is primarily a state and local responsibility.
The purpose of this block grant is to assist states in defining the crime problem on a statewide basis; to
develop objectives and priorities; to identify appropriate strategies and resources to achieve these goals;
and to coordinate the justice system courts, corrections, prosecutors, defense, police-- with units of
government (county and city).
7 Health Services. This proposal will create a unified financing mechanism to support and
enhance the availability and delivery of a broad range of personal health care services. Predominantly,
these funds would focus on the treatment of disease. The types of activities that could be supported
through this consolidation include the provision of health care and related services: to address the needs
of uninsured and underinsured special populations, to reduce the rate of infant mortality and low birth
weight babies, and/or to enhance the delivery of emergency medical care for children and adults. States
could utilize these funds to implement innovative strategies such as developing integrated service
networks in rural areas to increase accessibility to health care services.
5
03/28/95
16:13
2026245855
MAR-28-95 1 15:58 FROM: MO Washington DC off
ID: 202 624 5855
PAGE 7
DRAFT- FOR COMMENT ONLY
8. Public Health and Prevention. This proposal will created a unified financing mechanism to
support a broad array of preventive health services as well as support the continued existence of core
public health functions. States would have the discretion to target prevention dollars to critical public
health activities, such as immunization of children, control of infectious diseases, and/or the prevention
of lead poisoning. Other public health initiatives could be supported by these dollars, such as smoking
cessation programs and childhood injury prevention programs.
9. Substance Abuse Prevention and Treatment. This proposal combines a variety of categorical
and demonstration programs with the existing substance abuse prevention and treatment block grant give
states greater choices in the design of prevention and treatment programs. A broad array of substance
abuse treatment activities could be funded, including inpatient chemical dependence programs,
methadone maintenance programs for narcotic dependent persons, or community-based social models,
like those that serve persons with alcoholism. Likewise a broad range of prevention activities could be
designed and implemented in communities to reduce the incidence and prevalence of drug and alcohol
abuse by young people, child-bearing women and other populations.
10. Mental Health Systems and Treatment. This proposal combines a variety of categorical and
demonstration programs with the existing mental health block grant to give states greater freedom to
address the needs of persons with mental illness. The consolidated funds would be available to states to
finance the treatment of a range of mental health problems for populations in need; for example, states
could support the continued development at the state and community level of systems of care for children
who are seriously emotionally disturbed by building linkages between public and private sector providers
of health and mental health services. Other types of activities that could be supported include
psychosocial rehabilitation programs, mental health peer support programs, and outreach and diagnostic
services.
11. Health Professions. States play a pivotal role in the financing of medical and other allied
health professionals education. This proposal would enhance that role by giving states more flexibility
and authority to direct federal funding for workforce development. Activities that could be supported
include financial assistance to colleges and universities to increase their capacity to produce well-trained
medical and allied health professionals, need-based scholarships to increase the number of practitioners
in primary care or under-represented specialty. areas, and education/training centers designed to
compliment university-based development of health professionals.
12. Aging Services. This block grant is designed to organize services for the elderly based on
consumer needs rather than provider auspices. It would give states flexibility to fund the types of aging
services most needed by older consumers in their jurisdictions. A broad array of types of services to
meet the special transportation, nutritional and psychosocial needs of older Americans could be financed
through this mechanism; for example, home-bound elderly could have meals prepared and brought to
their homes, while other funds could be used to transport older persons to a community-based facility
where communal meals would be prepared. Assistance with financial planning could be provided to
those in need, as could help planning for the elderly's long-term health care needs.
13. Affordable Housing. Funding for a wide range of affordable housing services targeted
primarily to low income persons and families, including construction and rehabilitation funds; interest
rate buy-downs, downpayments, and other financial support; rent subsidies and vouchers; and supportive
services.
6
03/28/95
16:13
2026245855
MAR-28-95 15:59 FROM: MO Washington DC off
ID: 202 624 5855
PAGE 8
DRAFT -- FOR COMMENT ONLY
14. Community and Economic Development T o provide capital investment, training,
management and technical assistance, and research aimed at promoting job creation, community
enrichment, and economic growth within a community, a region, or an industry sector.
15. Agricultural Research and Extension Services. To promote research and the transfer of
technology aimed at strengthening industries in rural America including farming, forestry, and animal
husbandry.
16. Environmental Mandates Assistance. To provide assistance to local communities for
environmental infrastructure needs in a manner that will result in compliance with various federal
environmental requirements, particularly related to water quality. In order to enhance existing loan
assistance programs, Governors seek greater flexibility to combine infrastructure monies and coordinate
the expenditure of such monies based on state and local priorities.
17. Environmental Program Management. To provide administrative blocks grants which will
enhance the ability of states to use federal resources to meet national environmental protection goals
consistent with state-based priorities, while improving coordination of current environmental
management programs.
18. Agriculture Conservation Programs - A Parntership. To broaden the focus of existing
conservation-related agriculture programs while providing states with new tools to address
environmental and conservation problems associated with modern agriculture. Currently, most funds are
paid directly from the U.S. Department of Agriculture (USDA) to farmers for the purpose of taking
agricultural lands out of production or encouraging certain farming practices. The proposal is to
consolidate some of these program funds into one comprehensive program and allow states to set
priorities for the investment of these funds. A traditional "block grant" would not be necessary to
achieve this goal.
19. Workforce Development. To provide states a base level of funding for workplace skill
training, occupational education, labor exchange, and employment services for welfare recipients,
economically disadvantaged adults and older youth, dislocated workers who lose their jobs for any
reason, incumbent workers whose skills need upgrading, and disabled individuals in need of training and
placement assistance.
Activities to be funded include classroom and on-the-job training, basic skills instruction, literacy
programs, needs-related supportive services, individual assessment, job counseling, job search
assistance, career information, labor exchange, job matching services, administration of unemployment
insurance and related income support programs, development and management of labor market
information, and professional and capacity development. Labor exchange, job matching services, labor
market information, and career guidance would be available to all citizens of working age, irrespective of
economic need, through integrated intake, assessment, and referral systems in each community.
B. Programs for Consolidation or Elimination
Once agreement has been reached on the structure and purpose of block grants it is necessary to
determine what programs will be consolidated or eliminated in order to provide the funding needed for
the block grants. As in the case of the organization of the block grants themselves, there are numerous
alternatives and no single right selection. However, again to facilitate discussion, NGA staff have
developed for each of its possible blocks a listing of current grant-in-aid programs that might be
7
03/28/95
16:14
2026245855
MAR-28-95 15:59 FROM: MO Washington DC off
ID: 202 624 5855
PAGE 9
DRAFT- FOR COMMENT ONLY
eliminated. Those listings are contained in Attachment 1. Other approaches are possible and many
programs could reasonably be related to more than one block.
In reviewing the listings it is important to note that block grants are intended to create a new funding
mechanism and to redefine and simplify the relationship between the federal government and the states.
As a result, it should be clear that the programs mentioned as funding sources should not merely be
replicated as set-asides within the block grants. Existing program requirements must be terminated and
replaced with broad flexibility combined with a clear understanding of new goals and objectives.
C. Determining the National Investment
NGA policy states: "As the federal government begins to move toward a balanced budget the pressure to
reorder federal priorities and curtail federal grants will increase. Already, numerous proposals for
program consolidation and reduction are on the table.
"While federal budget cuts are needed, the Governors are concerned about the cumulative impact on
states of federal budget decisions. The federal budget must be balanced by true savings, not by shifting
costs to the states.
"Governors recognize the special responsibility of government at all levels in meeting the needs of
children. Governors have taken the lead in carrying out these responsibilities in the past. The Governors
believe that the federal government must maintain a financial role in assisting states and localities to
continue to meet these responsibilities."
In addressing the issue of funding for current entitlement programs, the Governors adopted additional
policy which states: "Block grant funding should be guaranteed over five years at levels agreed to among
the states, Congress and the Administration. Governors will work with the Congress to provide
appropriate budget adjustments that recognize agreed upon national priorities, inflation, and demand for
services." It is likely that Governors would support similar principles relating to the categorical
programs as well.
D. Establishing Performance Expectations and Standards
The Governors recognize the legitimate interest of the federal government in establishing accountability
for the funding that they provide. Again in adopting policy relating to concerns with an entitlement
grant, the Governors adopted policy which states: "The block grant should include a clear statement of
purpose including mutually agreed upon goals for the block grant and the measures that will be used to
judge the effectiveness of the use of the block grants Under this concept there should be no
micromanagement and states should be required only to ensure that the funding received is used (to meet
the goals of the program). While states would be required to describe their program in a state plan and to
provide periodic reports to the public, the plans would not be subject to federal approval or federal
revision. Financial and compliance audits would be conducted to ensure that moneys were properly
spent, and states would be required to pay back any misspent funds. Specific program outcome data will
be collected by the states and publicly reported."
Again, it is likely that Governors would support similar principles relating to the categorical programs as
well.
8
03/28/95
16:14
2026245855
MAR-28-95 16:00 FROM: MO Washington DC off
ID: 202 624 5855
PAGE 10
DRAFT FOR COMMENT ONLY
E. Determining the Interstate Allocation of Federal Funds
Formula issues may be among the most difficult raised in the development of a block grant proposal. To
minimize the impact of this issue, NGA policy suggests that initial block grant allocations mirror the
actual distribution of funds among the states under the programs to be consolidated or eliminated.
As noted above in the section on the national investment, Governors have also suggested the need to
discuss and agree upon adjustments in federal funding that would reflect changes in a number of factors.
As adjustments are made in the commitment of national resources, consideration could be given to
similar adjustments in the state by state allocations as well. Such adjustments should not, however,
penalize states that have used the flexibility in the block grants to achieve improved efficiency or
program effectiveness.
While it is unlikely that the Governors can collectively address the issue of formula changes, individual
Governors will need to be actively involved in any formula discussions.
VI.
Next Steps
As noted initially, NGA policy supports the creation of broad based block grants as one mechanism to
simplify the current complex system of non-entitlement categorical grants. The proposals outlined above
suggest one means by which that block grants might be accomplished. There are other approaches that
might have equal or more merit. The challenge is to move ahead.
However, it is vital that these block grants not be the unilateral creation of the federal government. They
must be the product of frank and open discussion between the states and the federal government.
Governors must have a seat at the table. The decisions made over the next several months will have a
major impact on the ability of the states to effectively meet domestic needs and the Governors must be
involved in those decisions.
The NGA and the Governors stand ready to participate in this discussion.
Appendicies: Funding Sources; NGA Federalism Policy; NGA Principles to Guide the Restructuring of
the Federal-State Partnership.
9
APPENDIX A
FUNDING SOURCES
DRAFT -- FOR COMMENT ONLY
READY TO LEARN
Purpose
The Ready to Learn block grant is designed to provide flexible funding to support state efforts to ensure
that all children, including those at risk of poor outcomes, are mentally, physically, and emotionally
prepared for formal learning and to help ensure their success in later life. Specific activities covered
would include services that enhance parents' ability to be their child's first teacher, enhance parents' and
other caretakers' ability to provide stable and caring environments, and promote the health and well-
being of all young children.
Rationale
As reflected in Title XX of the Social Security Act, the federal government has long recognized that cash
assistance alone would not address the needs of the poor and that prevention and early intervention
services were of critical import. The Ready to Learn block grant also emphasizes prevention and early
intervention services. In addition, it increases parents and caretakers ability to become self-sufficient
and maintain their independence while addressing the developmental needs of children. By supporting
state efforts to help young children and their families, the federal government also strengthens states
ability to achieve Goal One of the National Education Goals: By the year 2000, all children will start
school ready to learn. Finally, combining a series of program and services that are now provided to
children and families through multiple categorical programs into a single funding stream enhances the
ability of families to obtain comprehensive services and improves the quality of these services.
As indicated in the introduction, states have not reached agreement on whether individual entitlement
programs (e.g., Title IV-A AFDC Child Care, $555, and Title IV-A Transitional Child Care, $156)
should be included in block grant proposals.
Potential Programs
FY 95
Budget Authority
($ in millions)
Child Care and Development Block Grant
935
Title IV-A At-Risk Child Care
300
State Dependent Care Development Grants
13
Child Development Associate Credential Scholarship
1
Child and Adult Care Food Program
1
Commodity Supplemental Food Program (prevides Relid)
84
Even Start
102
IDEA, infants and preschool
doesn't fit
642
TOTAL
part H
intervation
2,077
early
1
DRAFT -- FOR COMMENT ONLY
YOUTH DEVELOPMENT
Purpose
To provide a base level of funding to states to support a continuum of developmentally appropriate
activities that promote individual responsibility and the social development of youth and facilitate their
preparation for careers and lifelong learning. These activities will build the competencies of young
people, while respecting the dominion of the family, fostering scholastic achievement, promoting self-
reliance, and cultivating positive peer interactions. The range of activities to be funded may include
school-, community- and work-based experiential learning, mentoring, community service, crisis
intervention, and structured recreation and cultural activities during non-school-hours.
Rationale
Pooling these categorical employment and training, education, and social service/prevention programs
into a block grant would facilitate state and community efforts to plan and develop comprehensive
strategies to promote positive youth development by meeting the fundamental needs of all youth without
being bound by the narrow parameters of current federal youth programs. In recognition of the national
implications of neglect, the federal government has traditionally provided states and communities with
significant resources to address the needs of vulnerable youth. Unfortunately, the current array of crisis-
driven, narrowly targeted prevention and intervention programs, scattered across federal agencies and
departments, are aimed at stratified segments of the nation's young people: those exhibiting behaviors or
experiencing problems commonly associated with a specific adolescent "pathology" (e.g., delinquency,
substance abuse, and pregnancy), or those deemed at-risk for developing such behaviors or problems.
Hence, public action frequently occurs after a problem has surfaced, rather than seeking to prevent the
problem from emerging in the first place. These programs have not significantly reduced the problems
associated with adolescence and in many communities, the problems have intensified despite intensive
interventions. Enabling states and communities the flexibility to strategically and comprehensively plan
a continuum of developmentally-relevant activities and services would more effectively prepare youth to
make the transition from childhood to productive citizenship.
Potential Programs
DEPARTMENT OF HEALTH AND HUMAN SERVICES
FY 95
Budget Authority
($ in millions)
Administration for Children and Families
Independent Living
70
Youth Gang Substance Abuse
11
Runaway and Homeless Youth Programs
Basic Centers
40
Drug Abuse Prevention
14
Transitional Living
14
Office of Community Services
National Youth Sports
12
Public Health Service
Adolescent Family Life
7
Center for Substance Abuse
Substance Abuse Block Grant (20% earmarked for prevention)
247
High-Risk Youth
65
2
DRAFT -- FOR COMMENT ONLY
FY 95
Budget Authority
($ in millions)
Violent Crime Control & Law Enforcement Act of 1994 -Title
III:
Community Schools Youth Service & Supervision Grant
Program (new program authorized in FY 95 under Crime Bill)
26
DEPARTMENT OF EDUCATION
Elementary and Secondary Education
Eliminated
Drug Free Schools & Communities
457
is House
Violent Crime Control & Law Enforcement Act of 1994 -Title III:
Family and Community Endeavor Schools Grant Program*
rescission bill
(new program authorized in FY 95 under the Crime Bill)
11
DEPARTMENT OF LABOR
Employment and Training Administration
Job Training Partnership Act (JTPA)
IIB-Summer Youth Employment and Training Program
1,056 eliminated
IIC-Year-Round Youth Program
Youth Fair Chance
599 25 greatly reduced
Job Corps
1,099
DEPARTMENT OF JUSTICE
Office of Juvenile Justice and Delinquency Prevention
Part A-Management and Administration
5
Part B-Formula State Grants
70
Part C-Discretionary Grants
25
Part D-Youth Gangs
10
Part E-State Challenge (new program funded in FY 95)
10
Part G-Juvenile Mentoring
4
Delinquency Prevention Grants
20
Violent Crime Control & Law Enforcement Act of 1994 -Title III:
Ounce of Prevention Council (new, authorized for FY 95)
1
DEPARTMENT OF AGRICULTURE
Extension Service
Youth At Risk
10
DEPARTMENT OF HOUSING AND URBAN
DEVELOPMENT
Drug Elimination Grants (50% of total appropriation minus 10%
set aside for Native Americans)
130
DEPARTMENT OF TREASURY
Violent Crime Control & Law Enforcement Act of 1994-Title
III:
Gang Resistance Education and Training (new program FY 95)
9
TOTAL
4,047
*Grants to CBO's.
3
DRAFT -- FOR COMMENT ONLY
CHILDREN AND FAMILY SERVICES
Purpose
The Children and Family Services block grant is designed to provide funding to assist states in
developing programs for intervention and follow-up services for children and families who are
experiencing crisis. Specific activities covered would include services designed to strengthen parents
ability to care for their children such as family support and preservation and parenting education;
services to secure permanent homes for children; services to care for children who cannot remain in their
home; and services to reduce violence in families.
Rationale
The Children and Family Services Block Grant would continue the role that the Federal Government has
historically played in improving the welfare of children in specific areas of national concern. All of the
programs listed are specifically designed to support families in crisis. The Governors believe that
services to this population could be significantly improved by permitting states to provide services to
children and their families through a single source. By providing a single stream of funds from the
federal government, states are also better to able to blend state and federal dollars into a seamless system
of services.
As previously indicated, there is no agreement among states about whether individual entitlement
programs (e.g., Foster Care, $3,128, Adoption Assistance, $399, or Emergency Assistance, $656) should
be included in block grant proposals.
Potential Programs
FY 95
Budget Authority
($ in millions)
Social services block grant
2,800
+Community services block grant
391
Temporary child care and crisis nurseries
12
Child welfare services (includes child welfare training)
296
Adoption opportunities
13
Abandoned infants
15
Child abuse state grants
23
Child abuse demonstrations (discretionary activities and
challenge grants)
15
Family violence programs
33
Foster grandparents
-
Americorpe
68
Family Preservation and Support Program
150
Family Support/Community-Based Resource Centers
39
TOTAL
3,855
+Includes only that portion allocated to states
4
DRAFT -- FOR COMMENT ONLY
EDUCATION REFORM
Purpose
To promote state-based systemic reform of the nation's education system by providing a single federal
turn spend the monies in accordance with the state's education reform plan. Funds would be used for governance allocation
grant that can be coordinated with new and existing state reform efforts. The funds would be directed
through the state planning panel to the appropriate states agencies and local school districts who would in
capacity building and to provide direct services to primarily elementary and secondary education
man
students. If provided for under the state plan, the a portion of the funds could be used to support the
transitional programs for pre-school students, such as those students enrolled in programs such as Head
Start and other early intervention programs.
Rational
Create a state-level Education Reform Grant by combining a number of education categorical programs
into a single grant that would be allocated to the states based on a formula similar to the current Title
One formula. A portion of the funds would be allocated to local schools based on the state's allocation
formula. This grant would be administered by a state panel appointed by the Governor. The panel would
work with the Chief State School Officer and other appropriate state agencies in developing and
administering the plan. The state would submit a single plan to the U.S. Department of Education. The
plan would outline the state's current reform plan and would include a set of benchmarks and
performance indicators that would lead toward the achievement of the national education goals. Through
the panel, states would report to the Secretary and to the citizens of the state on progress in achieving the
benchmarks. This program would be phased in by amendment the existing Goals 2000: Educate
America Act.
Potential Programs
FY 95
Budget Authority
($ in millions)
Goals 2000: Educate America Act
372
add
Title I: Helping Disadvantaged Children Meet High Standards
7,222
Drug
Title II: Eisenhower Professional Development Program
320
Title VI Innovative Education Program Strategies
374
Free Schoole
Education Infrastructure
100
Carl C. Perkins Vocational Education Act
973
TOTAL
[more to Liklog Leornig
9,335
Waktire Development
5
DRAFT -- FOR COMMENT ONLY
EDUCATION DISCRETIONARY
Purpose
To provide the Secretary of Education with the discretionary funds to support programs of national
significance and help improve educational quality and support for special populations.
Rational
These categorical programs currently provide support for certain states to participate in programs of
national significance or meet special needs. By consolidating the programs into a single grant the
Secretary will be able to better prioritize and focus federal dollars on areas of special concern. This
block grant would include an administrative set-aside for the Department of Education.
Potential Programs
FY 95
Budget Authority
($ in millions)
School to Work Opportunities Act
250
Charter Schools
6
Education, Research, Statistics, and Improvement
355
Federal Goals 2000 Activities
22
Technical Assistance for Improving Elementary and Secondary
Education programs
45
Bilingual and Immigrant Education
245
Inexpensive Book Distribution
10
Arts in Education
12
Law Related Education
6
Christa McAullife Fellowships
2
Foreign Language Assistance
11
Title V: Programs to promote Equity (Magnet Schools,
Women's Education Equity Act and Drop-Out Assistance)
143
TOTAL
1,107
6
DRAFT -- FOR COMMENT ONLY
CRIME CONTROL AND CORRECTIONS
Purpose
Crime control is primarily a state and local responsibility. The purpose of this block grant is to assist
states in defining the crime problem on a statewide basis; to develop objectives and priorities; to identify
appropriate strategies and resources to achieve these goals; and to coordinate the justice system -- courts,
corrections, prosecutors, defense, police-- with units of government (county and city).
Rationale
The strength of a "crime control and corrections block grant" is the flexibility provided the states to
identify crime priorities, and initiate and experiment with new programs that address crime problems. It
allows for the development of a statewide plan of attack that is necessary in order to mount and sustain
an effective and coordinated crime fighting effort.
A block grant to states must not have any restrictions such as earmarkings, set asides or mandates for
special populations. States must have full flexibility to define the nature and course of the crime
problem to be addressed.
Potential Programs
FY 95
Budget Authority
($ in millions)
Edward Byrne Memorial Grant Program
358
Correctional Options Grants
12
State Correctional Grants/Boot Camps
0
Community policing
1,300
Violent Offender Incarceration and Truth in Sentencing
Incentive Grants
0
TOTAL
1,660
7
DRAFT FOR COMMENT ONLY
HEALTH SERVICES
Purpose
This proposal will create a unified financing mechanism to support and enhance the availability and
delivery of a broad range of personal health care services. Predominantly, these funds would focus on
the treatment of disease. The types of activities that could be supported through this consolidation
include the provision of health care and related services: to address the needs of uninsured and
underinsured special populations, to reduce the rate of infant mortality and low birth weight babies,
and/or to enhance the delivery of emergency medical care for children and adults. States could utilize
these funds to implement innovative strategies such as developing integrated service networks in rural
areas to increase accessibility to health care services.
Rationale
The proposed consolidation of these programs would allow states to determine the priority health care
needs and health services required by their residents and to target the resources to best meet the needs.
Without the categorical limitations of the existing programs, states would be able to better target these
service delivery dollars toward gaps in the existing health care system and would permit states to better
coordinate these services with the existing array of primary and specialty care services available in the
private sector and through the state Medicaid programs.
Potential Programs
FY 95
Budget Authority
($ in millions)
Supplemental Feeding Program: Women, Infants and Children
3,470
Maternal and Child Health Block Grant
684
hot
Community Health Centers Grants go durectly
617
included
Family Planning (Title X)
193
14 Admines
Healthy Start
110
plan
Ryan White AIDS
79*
Developmental Disabilities Basic Support & Advocacy Grants
70
Project Grants for Health Services to the Homeless
65
Migrant Health Centers Grants go due ctly
65
Rural Health Outreach
27
Rural Health Research
13
Residents of Public Housing Primary Care Program
10
Linking Community-Based Primary Care, Substance Abuse,
HIV/AIDS, & Mental Health Treatment Services
8
Pediatric Emergency Medical Services
10
HIV/AIDS Dental Reimbursements
7
Trauma Care
5
Native Hawaiian Health Care
5
Black Lung Clinics
4
Developmental Disabilities Projects of National Significance
6
Operation of Offices of Rural Health
4
Health Services in the Pacific Basin
3
HIV Demonstrations: Children, Adolescents, & Women
2
TOTAL
5,457
*FY 94 figure
8
DRAFT -- FOR COMMENT ONLY
PUBLIC HEALTH AND PREVENTION
Purpose
This proposal will created a unified financing mechanism to support a broad array of preventive health
services as well as support the continued existence of core public health functions. States would have the
discretion to target prevention dollars to critical public health activities, such as immunization of
children, control of infectious diseases, and/or the prevention of lead poisoning. Other public health
initiatives could be supported by these dollars, such as smoking cessation programs and childhood injury
prevention programs.
Rationale
This proposal consolidates a myriad of categorical funding streams with the Preventive Health Block
grant to permit states to help state support the prevention of disease and meet the priority public health
needs of their residents. This consolidation would give states the resources and flexibility to conduct
needs assessments and design data/vital statistics systems to monitor their public health priorities, as
needed. In addition, states would have the flexible resources available to maintain emergency response
capacity, to address disease outbreaks, natural disasters, toxic spills, or any other public health crisis that
could emerge.
Potential Programs
FY 95
Budget
Authority
($ in millions)
Acquired Immunodeficiency Syndrome (AIDS) Activity
590
Childhood Immunization Grants
VFC
359
Preventive Health & Health Services Block Grant
158
Chronic and Environmental Disease Prevention
140
Tuberculosis Control Programs
114
Community Partnership Demonstration Grants
115
Sexually Transmitted Disease Control Grants
92
Cooperative Agreements for State-Based Comprehensive Breast
& Cervical
100
Injury Prevention & Control Research & State Grants Projects
45
Childhood Lead Poisoning Prevention
36
Minority Community Health Coalition Demonstration
22
HIV Demo. Research, Public & Professional Ed. Projects
16
Emergency Preparedness
2
HIV/AIDS Surveillance
45
Cancer Registries
15
Disabilities Prevention
8
Comprehensive School Health Programs to Prevent the Spread
of HIV & Other Important Health Problems
6
Community Health Promotion
5
Tobacco
3
Research, Treatment & Education Programs on Lyme Disease in
the United States
1
TOTAL
1,872
9
DRAFT -- FOR COMMENT ONLY
SUBSTANCE ABUSE PREVENTION AND TREATMENT
Purpose
This proposal combines a variety of categorical and demonstration programs with the existing substance
abuse prevention and treatment block grant give states greater choices in the design of prevention and
treatment programs. A broad array of substance abuse treatment activities could be funded, including
inpatient chemical dependence programs, methadone maintenance programs for narcotic dependent
persons, or community-based social models, like those that serve persons with alcoholism. Likewise a
broad range of prevention activities could be designed and implemented in communities to reduce the
incidence and prevalence of drug and alcohol abuse by young people, child-bearing women and other
populations.
Rationale
This proposal consolidates the block grant and demonstration funds (as well as smaller public education
and training programs) into a single block grant administered by the states. This consolidation would
free states to establish their own priorities for the demonstration of emerging prevention or treatment
protocols. With such flexibility, states would be able to reduce waiting lists for treatment services, could
direct funds toward maximizing coordination with other existing state programs, and would allow states,
that so choose, to focus more finances on coordination of prevention or treatment programs.
Potential Programs
FY 95
Budget Authority
($ in millions)
Substance Abuse Block Grant
987
Community Prevention
115
Prevention Demonstration: High Risk Youth
65
Treatment Improvement Demonstrations: Critical Populations
24
Prevention Demonstration: Pregnant Postpartum Women and
their Infants
23
Treatment Demonstrations: Target City Demo
36
Treatment Improvement Demonstrations: Criminal Justice
38
Treatment Improvement Demonstrations: Women and Children
54
Treatment Improvement Demonstrations: Comprehensive
Community Treatment Programs
27
Residential Treatment for Pregnant Women
25
Capacity Expansion Program
7
Training (prevention)
16
Prevention Public Education and Dissemination
14
Prevention Demonstration: Other Programs
7
Training (treatment)
6
Treatment Improvement Demonstrations: Campus Projects
0
TOTAL
1,444
I
This block grant does not include prevention dollars earmarked for youth. A number of states still
prefer to include those prevention dollars in this block grant.
10
DRAFT -- FOR COMMENT ONLY
MENTAL HEALTH SYSTEMS AND TREATMENT
Purpose
This proposal combines a variety of categorical and demonstration programs with the existing mental
health block grant to give states greater freedom to address the needs of persons with mental illness. The
consolidated funds would be available to states to finance the treatment of a range of mental health
problems for populations in need; for example, states could support the continued development at the
state and community level of systems of care for children who are seriously emotionally disturbed by
building linkages between public and private sector providers of health and mental health services.
Other types of activities that could be supported include psychosocial rehabilitation programs, mental
health peer support programs, and outreach and diagnostic services.
Rationale
The current categorically-based mental health programs have insufficient flexibility in their focus to
allow states to adapt to the rapidly changing health care environment. States simple need a more flexible
funding source. For example, a more flexible block grant would help states and providers adapt to
changes in mental health service delivery and financing as a result of the proliferation of health care
networks. Further, the operation and modification of comprehensive management information systems
are vital to evaluating the impact of services. Yet, current resources are inadequate to operate and
modify such systems. Compilation and analysis of data for policy formulation, program management
and evaluation is needed. This new block grant proposal would give states the flexibility to respond to
this changing environment. In addition, this proposal calls for the consolidation of demonstrations under
a block grant. While these demonstration funds are currently competitive, allocating them to states
would give states more authority to test innovations, such as testing mental health "carve-out"
management versus "integrated" management arrangements in the delivery of care in managed care
settings.
Potential Programs
FY 95
Budget Authority
($ in millions)
Mental Health Block Grant
275
Children's Mental Health
60
Projects for Assistance in Transition from Homelessness (PATH)
29
Demonstrations: Community Support Program
24
Protection and Advocacy
22
Demonstrations: Homeless Demonstrations
21
Clinical Training
2
TOTAL
433
This is a special CMHS, Housing and Urban Development, Department of Education, and Department
of Agriculture five year demonstration in 18 sites (9 states). It is designed to document the impact of
an integrated care model recommended by the 1992 report of the Federal Task Force on
Homelessness and Severe Mental Illness.
11
DRAFT -- FOR COMMENT ONLY
HEALTH PROFESSIONS
Purpose
States play a pivotal role in the financing of medical and other allied health professionals education.
This proposal would enhance that role by giving states more flexibility and authority to direct federal
funding for workforce development. Activities that could be supported include financial assistance to
colleges and universities to increase their capacity to produce well-trained medical and allied health
professionals, need-based scholarships to increase the number of practitioners in primary care or under-
represented specialty areas, and education/training centers designed to compliment university-based
development of health professionals.
Rationale
Currently, the majority of federal funding for workforce development flows directly to individuals and
universities within a state. This proposal would promote a more active role for state government in the
allocation of those scarce resources. States could the identify their own needs for primary versus
specialty care providers and target financial resources based upon these workforce patterns. The
proposal would also allow states to direct resources to the cultural and linguistic minorities which reflect
the demographics of the citizens. Finally, by increasing the state role in directing funds for health
professions, states would be better able to encourage beneficiaries of financial assistance to practice in
unserved or underserved areas of the state.
Potential Programs
FY 95
Budget Authority
($ in millions)
Grants for Family Medicine
47
Health Careers Opportunity Program
27
Area Health Education Centers
25
Programs of Excellence in Health Professions Education for
Minorities
24
Minority Health
21
Developmental Disabilities University Affiliated Programs
19
Health Professions Student Loans, Including Primary Care
Loans/Loans for Disadvantaged Students
18
Minority Scholarships
18
Grants for General Internal Medicine and/or General Pediatrics
17
Professional Nurse Traineeships
16
Nurse Practitioner/Nurse Mid-wife
17
Advanced Nurse Education
12
Exceptional Financial Need Scholarships
11
Nurse Education Special Projects
10
Grants for Geriatric Education Centers
9
HPSL Recapitalization
8
Public Health/Preventive Medicine
8
Grants for Physician Assistant Training Program
7
Scholarships for Health Professions Students from
Disadvantaged Backgrounds
6
Mental Health Clinical or Service Related Training Grants
5*
Interdisciplinary Training for Heath Care in Rural Areas
4
Allied Health Projects Grants
4
12
DRAFT -- FOR COMMENT ONLY
FY 95
Budget Authority
($ in millions)
Nursing Education Opportunities for Individuals from
Disadvantaged Backgrounds
4
Residency Training & Advanced Education in the General
Practice of Dentistry
4
Area Health Education Centers - Border Health
4
Grants for Nurse Anesthetist Faculty Fellowships
3
Health Professions Research and Data
2
Grants for State Loan Repayment
1
Health Administration Traineeships & Special Projects Program
1
Chiropractic Demonstrations
1
Grants for Podiatric Primary Care Residency Training
1
Demonstration Grants to States for Community Scholarships
TOTAL
354
*FY 94 figure
13
DRAFT FOR COMMENT ONLY
AGING SERVICES
Purpose
This block grant is designed to organize services for the elderly based on consumer needs rather than
provider-auspices. It would give states flexibility to fund the types of aging services most needed by
older consumers in their jurisdictions. A broad array of types of services to meet the special
transportation, nutritional and psychosocial needs of older Americans could be financed through this
mechanism; for example, home-bound elderly could have meals prepared and brought to their homes,
while other funds could be used to transport older persons to a community-based facility where
communal meals would be prepared. Assistance with financial planning could be provided to those in
need, as could help planning for the elderly's long-term health care needs.
Rationale
There are two compelling reasons for consolidating and block granting these programs. First, these
programs are highly interrelated, and support and complement one another. For example, specialized
Department of Transportation funds are used to purchase vehicles that transport older people to
Department of Health and Human Services (DHHS) financed meal sites; DHHS funds are used for the
vehicle operating costs. Both the Senior Community Services Employment Program (Department of
Labor) and the Older Americans Volunteer Program (Corporation for National and Community Service)
pay stipends to older people who provide direct services tot he elderly (some of the services are partly
financed by DHHS). In short, these programs perform overlapping functions.
The second reason is administrative efficiency. Even though these programs all serve the same target
population (the elderly), their federal requirements and restrictions force states to; set-up duplicative
grants management and reporting systems; to cajole local providers serving identical populations S to
coordinate their efforts; and allocate resources to certain functions that may be of lower priority than
others due to the federal allocation of funds.
Potential Programs
FY 95
Budget
Authority
($ in millions)
Congregate Nutrition, Title III-C1, Older Americans Act
Senior Community Service Employment Program older Americans 1066Ag 376 group
Supportive Services - Title III-B, Older Americans Act
307
Commodities Support for Elderly Nutrition
151
Transportation for the Elderly and Adults with Disabilities -
Section 16(b)(2) of the Federal Transit Act
60
Retired Senior Volunteer Program
36
part of Jr
Senior Companion Program
31
BNatiL Service
Congregate Housing Services Program - Housing and
Coyonax
Community Development Act
25
Health Promotion - Title III-F of the Older Americans Act
17
Insurance Counseling Assistance - Sec. 4360, OBRA '90
10
Home Delivered Meals, Title III-C-2, Older Americans Act
10
In-Home Services, Title III-D, Older Americans Act
9
Alzheimer's Demonstration Grants to States - Section 398 of
Public Health Services Act
5
Elder Abuse Prevention- Title VII, Chapter 3, Older Americans Act
5
14
DRAFT -- FOR COMMENT ONLY
FY 95
Budget
Authority
($ in millions)
Long Term Care Ombudsman - Title VII, Chapter 2, Older
Americans Act
4
Pension Counseling - Title VII, Chapter 5, Older Americans Act
2
TOTAL
1,459
Note: The Foster Grandparent Program has been included in the Children and Family Services. A
number of states still prefer that this program remain in this block grant.
15
DRAFT -- FOR COMMENT ONLY
AFFORDABLE HOUSING
Purpose
Funding for a wide range of affordable housing services targeted primarily to low income persons and
families, including construction and rehabilitation funds; interest rate buy-downs, downpayments, and
other financial support; rent subsidies and vouchers; and supportive services.
Rationale
Depending on the per capita income of its residents and the inventory and condition of its housing stock,
a state may need relatively more funds for the promotion of affordable housing construction and less for
actual rental assistance or vice versa. These conditions also vary across a state and change over time. A
block grant would permit a state to use federal funds to address its priority affordable housing needs. In
addition, many existing federal housing programs are competitive grants, awarded after expensive
grantswriting investments. A block grant would save this expense, and, coupled with effective
management documents, still achieve continual improvement in program design.
By folding in programs from both the Department of Housing and Urban Development (HUD) and the
old Farmers Home Administration (FmHA), currently administered by the Rural Housing and
Community Development Service (RHCDS), the block grant would permit states to manage housing
programs consistently across the state, rather than having separate rules for urban and rural areas. This
proposal does not include any loan or loan guarantee programs because their operation is not consistent
with a block grant approach.
The federal government has established a wide array of programs and approaches to affordable housing,
including one that few states have adopted: ownership of properties. Thus, this proposal assumes that
any affordable housing stock that is owned and/or operated by the federal government (public housing,
troubled multifamily housing, etc.) or under long term contract (section 236, etc.) would remain as a
federal responsibility until the property was "market ready," meaning that renters with vouchers would
seek to rent the units. This requirement means that the funds available for the block grant may need
adjustment since HUD may need to hold additional funds to improve, repair, or demolish some portion
of its inventory.
While NGA does not generally support setasides in block grants, the housing arena is one where local
governments play a major role. Therefore, Governors would accept a pass through or setaside for local
government purposes in this grant.
Because of the major changes suggested by this block grant proposal, it is recommended that a transition
period be established. Portions of the overall proposal could be enacted on different schedules,
depending on the difficulty of coordinating federal agencies, measuring the required subsidy based on
the new mix of services, and creating a mechanism to determine the properties that would be transferred
on a state-by-state basis. For instance the production programs (HOME, Sec. 202, and Sec. 811) and the
homelessness assistance programs could each be consolidated on a faster schedule than the public
housing programs.
16
DRAFT -- FOR COMMENT ONLY
Potential Programs
FY 95
Budget Authority
($ in millions)
Housing Construction/Rehabilitation Programs at HUD
HOME
1,400
National Homeownership Trust
50
Housing Counseling
50
Elderly Housing (Sec.202)
1,279
Housing for the Disabled (Sec.811)
387
HOPE II & HOPE III
62
Lead Based Paint Hazard Reduction
100
Funding for Preservation of Existing Affordable Housing in
out
Areas Needing Such Units (Preservation)
175
RHCDA [formerly Farmers Home Administration (FmHA)
Housing Production Grant Programs
Sec. 504 Very-Low Income Housing Repair Grants
12
Sec. 516 Rural Housing for Domestic Farm Labor
11
Sec. 53 Mutual and Self-Help Housing
13
Sec. 509 Compensation for Construction Defects
1
Sec. 533 Rural Housing Preservation Grants
22
Subtotal: Construction and RehabilitationGrant Programs:
3,562
HUD Rental Assistance and Support Programs
Section 8 Certificates and Vouchers for Expiring Contracts
2,786
Section 8 Rental Assistance - Elderly
real
1,162
$2.86
recission
Section 8 Rental Assistance - Disabled
Two
396
Section 8 Amendments
735
New Rental Assistance (incremental)
982
Flexible Subsidy
50
Elderly Housing Service Coordinators
22
Project-Based Service Coordinators
15
Tenant Based and Multifamily Service Coordinators
15
Family Self-Sufficiency Coordinators
17
Congregate Housing Services
25
Foster Child Care
72
Moving to Opportunity
50
Homeownership Assistance Program
7
RHCDA/FmHA Rental Assistance Programs
seving
Commitment
Sec. 521 Rental Assistance
516
to
her
Sec. 502 Rental Assistance
7
Rental Assistance Subtotal:
6,857
HUD Homelessness Assistance Programs
Shelter Plus Care
905**
Emergency Shelter Grants
157
Supportive Housing
**
Innovative Homeless Initiative
25
17
DRAFT-- FOR COMMENT ONLY
FY 95
Budget Authority
($ in millions)
Section 8 SRO (single room occupancy)
**
Housing Opportunities for Persons with AIDS
186
Homelessness Assistance TOTAL
1,273
** Program costs included within $905 milion appropriation.
HUD Public Housing Construction and Rehabilitation Programs
Public Housing Development
total ant
598
Public Housing Amendments
65
Public Housing Modernization (This figure includes Indian Housing) - 1.166 3,285
HUD Public Housing Operating Programs
Public Housing Operating Subsidies
- 404m
2,900
Family Investment Centers
26
Community Partnership Against Crime
290
Public Housing Service Coordinators
30
Lease Adjustments
13
Public Housing Subtotal
7,207
Block Grant Proposal TOTAL
18,899
1 - 2/2
18
DRAFT -- FOR COMMENT ONLY
COMMUNITY AND ECONOMIC DEVELOPMENT
Purpose
To provide capital investment, training, management and technical assistance, and research aimed at
promoting job creation, community enrichment, and economic growth within a community, a region, or
an industry sector.
Rationale
Efforts to promote economic and community development are primary goals of state government.
Consolidation of a wide range of existing federal resources into one flexible program would permit states
to use these resources more effectively to respond to local market and community situations, including
affordable housing. Most states have developed strategic plans for development which identify priority
areas for state action. Limited federal resources would be more efficiently spent in concert with state
efforts.
This proposal does not include loan or loan guarantee programs. It does include programs that are
currently delivered to customers or clients directly by the federal government, requiring a new federal
state relationship in those areas. However, most states already serve these same clients and offer
similar services. Therefore the transition will not be difficult for states. The proposal does bring
together programs from a number of federal agencies. The block grant is intended to free states from
different requirements within different federal agencies for essentially similar programs.
Potential Programs
FY 95
Budget Authority
($ in millions)
Community Development Program, administered by HUD
Community Development Block Grant: Small Cities Portion
1,287
Empowerment Zones
400
Special Purpose Grants
45
Economic Development Initiative (UDAG Recapture Funds)
125
Subtotal HUD
1,857
Economic Development Programs, administered by EDA
Development Grants
202
Planning Grants
26
Technical Assistance Grants
11
Economic Development and Adjustment Grants
45
Subtotal EDA
284
Rural Economic Development Grant Programs, administered by the Rural Business
and Cooperative Development Service (RBCDS) (formerly Farmers Home Administration)
Rural Business Enterprise Grants
48
Subtotal RBCDS
48
Programs for Farmers administered by the Farm Service
Agency (formerly FmHA)
State Mediation Grants
3
Farm Outreach and Assistance Grants
3
Subtotal FSA
6
19
DRAFT -- FOR COMMENT ONLY
The Appalachian Regional Commission
FY 95 Budget
Authority
($ in millions)
Appalachian Development Highway System
237
Physical Development Program
100
Human Development Program
24
Business Development Program
10
Local Development District & Technical Assistance
7
Subtotal ARC
378
Economic Development Programs administered by the Tennessee
Valley Authority
Rural Development
21
Subtotal TVA
21
The Small Business Administration
Economic Development
166
Small Business Advocacy
8
Subtotal SBA
174
Proposed Block Grant TOTAL
2,768
**
denotes funds to be distributed only within geographic areas of current programs
20
DRAFT -- FOR COMMENT ONLY
AGRICULTURAL RESEARCH AND EXTENSION SERVICES
Purpose
To promote research and the transfer of technology aimed at strengthening industries in rural America
including farming, forestry, and animal husbandry.
Rationale
Cooperative state research can be managed by states within regions based on common problems, and
extension services can be managed by states to effectively meet the needs of farmers and other local
agricultural service providers. States fund other portions of state university budgets, and a stronger state
role can better target limited resources.
U.S. Department of Agricultural Research Programs
FY 95
Budget Authority
($ in millions)
Cooperative State Research Service Programs
1890 College Tuskegee
28
Animal Health/Disease
5
Coop Forestry
20
Hatch Act
171
Agriculture - Special
75
FY 95 Budget
Authority
($ in millions)
Extension Services Programs
1890 Colleges
25
D.C. Act
1
Farm Safety
3
Expand Food and Nutrition
61
Pest Impact Assessment
3
Pest Management
11
Renewable Resources
3
Smith Lever
271
Total Research Programs
677
21
DRAFT -- FOR COMMENT ONLY
ENVIRONMENTAL MANDATES ASSISTANCE
Purpose
To provide assistance to local communities for environmental infrastructure needs in a manner that will
result in compliance with various federal environmental requirements, particularly related to water
quality. In order to enhance existing loan assistance programs, Governors seek greater flexibility to
combine infrastructure monies and coordinate the expenditure of such monies based on state and local
priorities.
Rationale
Governors have consistently called for more state flexibility in administering the federal infrastructure
assistance monies to states and local communities. Specifically, the Governors propose consolidation of
federal environmental loan funds (i.e., state revolving loan funds for drinking water and wastewater
treatment construction) in order to enable states to target the funds to their greatest water quality,
infrastructure-related needs. A consolidated infrastructure loan fund would combine all capitalization
grant dollars for wastewater and drinking water state revolving loan funds (SRF) and other dedicated
water quality-related funds. States would be authorized to utilize funds to award loans and grants to
needy communities. Consolidation would increase efficiency in administering federal dollars from EPA
and USDA, through states to local communities for environmental infrastructure projects and other
activities to reduce water pollution. Priority needs may include construction of a wastewater treatment
plant, enhancement of a public drinking water system, closure of a municipal waste landfill, or
groundwater treatment to clean up contamination from underground storage tank releases.
Potential Programs
FY 95
Budget Authority
($ in millions)
Wastewater State Revolving Loan Fund
1,235
Drinking Water State Revolving Loan Fund (appropriated but not
1,300
yet authorized)
FmHA Rural Water and Waste Disposal Loans/Grants (60
percent/40 percent)
1,155
Total Estimate
3,690
1. A portion of appropriated amounts may need to be reserved for debt servicing of existing loans.
22
DRAFT -- FOR COMMENT ONLY
ENVIRONMENTAL PROGRAM MANAGEMENT
Purpose
To provide administrative blocks grants which will enhance the ability of states to use federal resources
to meet national environmental protection goals consistent with state-based priorities, while improving
coordination of current environmental management programs.
Rationale
The federal government currently provides categorical grants to assist in the administration of
environmental programs. Existing grants are awarded (some by allocation formula and some on a
competitive basis) under priorities set by the federal government rather than by the states and funds are
severely constrained by federal grant conditions. Eliminating the specific program grant criteria and
allowing the states to use the money in a block over a five-year period according to their priorities would
advance state environmental activities, particularly in voluntary, non-regulatory areas. To make this
fully workable, states must be authorized, in consultation with local officials, to adjust timeframes for
meeting certain federal requirements to allow priority environmental problems to be addressed first. In
particular, adjustment of federal enforcement priorities and explicit statutory requirements and deadlines
would likely be necessary to enable Governors to target funds toward individual states' environmental
priorities. States may need a one to two-year transition period to obtain environmental block grants.
Potential Programs
FY 95
Budget Authority
($ in millions)
Air Pollution Control Program
Clean Air Act Section 105 Grants
181
Water Pollution Control Program
Clean Water Act Section 104(b)(3)
23
Clean Water Act Section 106 Grants
80
Nonpoint Source Management Grants
100
Water Quality Management Planning Grants
13
Clean Lakes Program Grants
0
Wetlands Program Grants
15
Drinking Water Program
Safe Drinking Water Act Public Water Supply Supervision Grants
70
Underground Water Source Protection Grants
10
Hazardous Waste Management Program
State Program Support Grants
96
Leaking Underground Storage Tank Trust Fund
70
State Underground Storage Tanks Program
10
Pesticides Enforcement Cooperative Agreement Grants
16
Toxic Substances Enforcement Grants
4
Radon State Grants
8
Lead Grants
13
Total Estimate
709
23
DRAFT -- FOR COMMENT ONLY
AGRICULTURAL CONSERVATION PROGRAMS - A PARTNERSHIP
Purpose
To broaden the focus of existing conservation-related agriculture programs while providing states with
new tools to address environmental and conservation problems associated with modern agriculture.
Currently, most funds are paid directly from the U.S. Department of Agriculture (USDA) to farmers for
the purpose of taking agricultural lands out of production or encouraging certain farming practices. The
proposal is to consolidate some of these program funds into one comprehensive program and allow states
to set priorities for the investment of these funds. A traditional "block grant" would not be necessary to
achieve this goal.
Rationale
This proposal would provide greater focus on state agriculture-related conservation and environmental
priorities by giving Governors a larger role in the targeting of USDA conservation monies.
Consequently, states would be better able to address priority objectives such as the clean water
requirements for which states are ultimately held accountable.
Potential Programs
FY 95
Budget Authority
($ in millions)
Conservation Operations
603.4
River Basin Surveys and Investigations
13.0
Watershed Planning
10.5
Watershed and Flood Prevention Operations
70.0
Great Plains Conservation Program
15.2
Resource Conservation and Development
priority fu CATT
32.8
Conservation Reserve Program
1859.0
Wetlands Reserve Program
not doore Xaray
83.2
Agricultural Conservation Program
programs.
100.0
Water Bank
0.9
Colorado River Salinity Program
0.6
Total Estimate
2788.6
WDA give maney to
farmer durity
24
DRAFT -- FOR COMMENT ONLY
WORKFORCE DEVELOPMENT
Purpose
To provide states a base level of funding for workplace skill training, occupational education, labor
exchange, and employment services for welfare recipients, economically disadvantaged adults and older
youth, dislocated workers who lose their jobs for any reason, incumbent workers whose skills need
upgrading, and disabled individuals in need of training and placement assistance.
Activities to be funded include classroom and on-the-job training, basic skills instruction, literacy
programs, needs-related supportive services, individual assessment, job counseling, job search
assistance, career information, labor exchange, job matching services, administration of unemployment
insurance and related income support programs, development and management of labor market
information, and professional and capacity development. Labor exchange, job matching services, labor
market information, and career guidance would be available to all citizens of working age, irrespective of
economic need, through integrated intake, assessment, and referral systems in each community.
Rationale
This block grant would afford states the opportunity to streamline their workforce development system,
create lifelong learning systems, and integrate access to services sought by employers, workers, and
labor market entrants. The block grant would provide resources for managing a state's workforce
development system; cultivating partnerships among state, local, and business interests from both public
and private sectors; developing and operating one-stop service centers providing access to the system;
and supporting basic and occupational skills training to meet the economic and social needs of the state.
Block Grant Structure
This proposal would establish a block grant with two components -- one supported by federal general
funds currently distributed through 24 programs; the other supported by some of the federal trust funds
derived from the payroll tax levied under the Federal Unemployment Tax Act (FUTA). This second
component includes only administrative funding allocated by formula for state employment security
programs -- i.e., unemployment insurance and Job Service. At a minimum, states could combine these
trust funds for maximum flexibility in administering their employment security programs.
In addition, states would have a new option to combine trust funds and general funds -- in proportions
chosen by the state -- to finance comprehensive workforce development systems. This would allow
states to use a portion of the administrative trust funds for other workforce development initiatives --
e.g., customized training, skills development for specialized industries, implementation of skills
standards systems, etc. -- that could strengthen the link between workforce and economic development.
To further reduce the number of categorical federal job training programs, this proposal also combines
10 other federal programs into a single fund from which the Secretary of Labor would make
discretionary grants for activities of national significance and programs to encourage innovation and
quality improvement and to address priority multistate issues.
25
DRAFT -- FOR COMMENT ONLY
TABLE 1 - Potential Programs
FY 95
Component A - General Funds
Budget Authority
($ in millions)
DEPARTMENT OF LABOR
Training and Employment Services
JTPA Formula Grants to States
JTPA Title II-A Training for Economically Disadvantaged
1,055
Adults
JTPA Title III Training for Dislocated Workers
1,037
JTPA Federally Administered Programs
Migrant Farmworkers Program
86
Veterans employment
9
Labor Market Information
5
NOICC/SOICC (Occupational Information Coordination)
5
State Unemployment Insurance and Employment Service Operations
Employment Service
Allotments to States (General Funds)
25
Trade Act Adjustment Assistance
TAA Training & Benefits
231
adm instration
NAFTA Training & Benefits (New in FY 1995)
43
Would oppone there
DEPARTMENT OF EDUCATION
Migrant Education
High school equivalency program
8
College assistance program
2
Vocational Education
Data Systems (NOICC/SOICC - Occupational Information
Coord.)
5
Student Financial Assistance
No Suppel
Pell Grants (Non-degree studies)
1,827 Sensitive and
Adult Education
State programs
252
State Literacy resource centers
8
Workplace literacy partnerships
19
Literacy training for homeless adults
9
Literacy programs for prisoners
5
Vocational Rehabilitation severely Landitipped montally physically
State grants
2,054
Client assistance grants to states
10
Training (Professional)
40
Supported employment state grants
37
DEPARTMENT OF AGRICULTURE
Food Stamp Program
Employment and Training
165
26
DRAFT -- FOR COMMENT ONLY
FY 95
Budget Authority
($ in millions)
DEPARTMENT OF HEALTH & HUMAN SERVICES
JOBS Program
Education and Training for AFDC Recipients
1,300
Total, General Funds
8,237
Component B - Unemployment Trust Funds
FY 95
Budget Authority
($ in millions)
DEPARTMENT OF LABOR
State Unemployment Insurance and Employment Service
Operations
Unemployment Compensation
State Operations
1,766
State Integrity Activities
367
Employment Service
Allotment to States (Trust Funds)
821
National Activity-Targeted Jobs Tax Credit
15
Veterans Employment and Training
State Administration
161
Total, Unemployment Trust Funds
3,130
GRAND TOTAL, STATE BLOCK GRANTS
11,367
TABLE 2 - Secretary of Labor's National Discretionary Fund
FY 95
Budget Authority
($ in millions)
DEPARTMENT OF LABOR
Training and Employment Services
JTPA Federally Administered Programs
American Samoans/Asian Americans
5
Rural Concentrated Employment Program
4
Pilots and Demonstrations
36
Research, Demonstration and Evaluation
12
Capacity Building
6
NOICC/SOICC
1
Skills Standards
6
Women in apprenticeship
1
Homeless job training
5
27
DRAFT -- FOR COMMENT ONLY
FY 95
Budget Authority
($ in millions)
State Unemployment Insurance and Employment Service
Operations
Employment Service
One-stop Career Center Grants
120
Total, General Funds
196
Additional Comments and Issuès
Roll-Out Reforms. Under this proposal, two "roll-out" reforms would be excluded from the block
grants to states and retained in a national discretionary block fund administered by a federal department
secretary:
One-stop career center grants, funded at $120 million in FY 1995, are designed to be rolled
out to several additional states each year based on their readiness to implement a comprehensive
workforce development system. Including these discretionary grants in future block grants could
diffuse funds now focused on the states that are most ready to make maximum use of them. This
proposal would include the one-stop center grants in the Secretary of Labor's national
discretionary block fund.
School-to-work implementation grants, which also involve a roll-out each year to another
increment of states, are not included in block grants to states for similar reasons. These funds
would be included in the Secretary of Education's national discretionary block fund.
Vocational Education. Perkins Act vocational education funds could have been included in this block
grant or in Education or divided among them and Youth Development. Dividing them at the federal
level could cause problems in a number of states. Take basic state grants, for example. States currently
may use the federal dollars for secondary and post-secondary programs in ratios of their own choice, and
the split now varies from state to state in a range from about 18% to 85%.
To preserve maximum flexibility, these funds would be included in an Education block grant with the
understanding that up to 20 percent of its total funds would be transferable to the Workforce
Development block grant or the Youth Development block grant, or both, and that states would provide
an appropriate share of these funds for post-secondary. vocational training and establish strong planning,
management, and operating links between activities under the three block grants.
Separate Block Grant For Youth Development Programs. This block grant does not include federal
youth employment and training programs. A separate Youth Development block grant combines these
programs with other categorical youth services to provide states with a foundation for comprehensive
youth programs that more effectively address the full range of youth needs and opportunities.
Specifically Excluded Programs
Several programs or program components have been excluded deliberately from this proposed block
grant and the related secretary's discretionary block funds. Some are included in other block grant
proposals, despite their apparent relevance to workforce development, because they have significant
28
DRAFT -- FOR COMMENT ONLY
links to purposes of the other block grants. Others are excluded because of their national significance or
applicability nationwide and would remain as discrete nationally administered financial assistance
programs. Programs that do not appear in the block grants to states or the secretary's block funds would
be left intact to operate as currently authorized.
29
APPENDIX B
NGA POLICY
PRINCIPLES FOR STATE-FEDERAL
RELATIONS
NATIONAL
GOVERNORS
NGA Policy
ASSOCIATION
PRINCIPLES FOR STATE-FEDERAL RELATIONS
1
Preamble
The American federal system established a strong union while preserving the diversity reflected
in individual states. State and local governments-governments close to the people-provide the
needed opportunities for flexibility and innovation, and by their decentralization of decisionmaking
and responsive nature, encourage citizen participation and support.
Although there is a clear need for a national role in a variety of domestic issues, the principles
of local determination and diversity require a careful balance of federal and state roles. It is vital to
ensure that states have the authority and flexibility needed to respond to the needs and priorities of
those who live within their boundaries.
While recognizing that a strong national government was necessary, the original thirteen
states, in adopting the United States Constitution, included provisions to limit the power of the
national government and to preserve the power and authority of states. However, the authority of
state government has been eroded over time due to constitutional changes, Supreme Court
decisions, and legislative changes. The legislative changes generally have reduced state prerogatives
by preempting state laws, by creating unfunded mandates, and by prescribing minute management
and administrative details for specific federal assistance programs.
Not only has there been a trend toward the erosion of state authority, but two Supreme Court
decisions, Garcia V. San Antonio Metropolitan Transit Authority and South Carolina V. Baker, cleared
the way for this trend to accelerate. These two decisions substantially reduced the Tenth Amend-
ment protection for state authority, forcing states to make their case with Congress much like a
special interest group. The key language in the Garcia decision holds that "the limits are structural,
not substantive, i.e., that states must find protection from congressional regulation through the
national political process, not through judicially defined spaces of unregulated state activity."
The Supreme Court decision in South Carolina confirmed the Garcia decision. Furthermore,
it eliminated any remaining constitutional protection regarding the doctrine of intergovernmental
tax immunity. The loss of reciprocal tax immunity, coupled with the huge federal budget deficit,
increases the pressure on Congress to change the current legislation so that a part or all of the
interest from general obligation bonds would be subject to federal income taxes. Other tax issues
that are of potential concern are the loss of deductibility for state and local income taxes (sales taxes
are no longer deductible) and the possible imposition of a national sales tax or value-added tax that
would preempt the states' major source of revenue.
Recently, the Supreme Court's Tenth Amendment decisions have evinced a more positive
trend. In Gregory V. Ashcroft, a statutory case that involved a state's authority to set a mandatory
retirement age for its judges, the Court went out of its way to speak approvingly of our constitutional
system of "dual sovereignty between the states and the federal government." The following term,
in New York V. United States, the Court restored at least some substantive content to the Tenth
Amendment by expressly holding that a provision of the Low-Level Radioactive Waste Policy
Amendments Act of 1985 was unconstitutional because it compelled states to govern according to
Congress' instructions. "[E]ven where Congress has the authority under the Constitution to pass
laws requiring or prohibiting certain acts," the Court reasoned, "it lacks the power directly to compel
the states to require or prohibit those acts."
It is too soon to tell whether Gregory and New York represent initial steps in a revival of the
Tenth Amendment or whether they are simply one more instance of the Supreme Court's vacillation
in this area of constitutional doctrine.
HALL OF THE STATES I 444 NORTH CAPITOL STREET I WASHINGTON D.C. 20001-1572 202-624-5300
2
Protecting State and Local Borrowing Capacity
State and local bonds are a significant revenue source for state and local governments. The
threat of federal action to tax the interest on such bonds in the future may have a measurable impact
on the cost and availability of such funding. Although no congressional action has begun to impose
such a tax, the uncertainty remains. Therefore, the Governors call on Congress to permanently
remove this threat by adopting and referring to states a constitutional amendment that would
specifically exempt state and local bonds from federal taxation.
3
Creating a Consensus for Action
The continuing federal deficit, and now the health care crisis, will force the federal government
to make a number of critical choices relating to the financing and administration of governmental
programs. Many of these decisions will have a fundamental effect on state and local governments
and the quality and availability of public services they provide and administer.
Such decisions should not be made in a vacuum. Therefore, the Governors call on Congress
to convene a commission, composed of members designated by the federal government and states,
to develop recommendations on the steps needed to retain or restore balance in the federal system.
Such a commission should address not only the issues of the allocation of intergovernmental
programs, but also the simplification of intergovernmental administration and the protection of
state and local revenue bases.
The Governors recognize that resolution of the federal budget deficit entails painful spending
and revenue choices and that some of these choices may have adverse effects on all or some states
and on local governments, as well as on recipients of services of federally funded programs. The
Governors urge that federal actions minimize such impacts and take into account the extent to which
state and local governments have contributed, during the past decade, to federal budget reduction
through lowered federal grant levels and shifts of funding responsibilities to the state and local
sectors.
4
Defining the Future Federal Role
To ensure that legitimate demands for federal actions are met in a responsible manner and
that the role of states and localities is preserved, several steps are needed.
4.1
State Responsibility. The Governors strongly support the principles of federalism, but the public
will insist on federal action should states fail to act collectively on issues of legitimate concern. The
states reaffirm their strong commitment to continued leadership and effective state action.
4.2
Federal Protection and Special Populations. The states reaffirm their support for a federal role in
ensuring equality of access and due process. The federal government also has a responsibility to help
states meet the needs of special populations.
4.3
Federal Forbearance. Not all problems require a uniform solution. Priorities and preferences may
vary from state to state. The lack of universal action or uniform solutions does not in and of itself
provide a sufficient rationale for federal action. Instead, Governors recommend that the develop-
ment of future federal programs be guided first by five fundamental principles.
Federal action should be taken where constitutional authority for action is clear and certain.
Federal action should be limited to problems that are national in scope, where the national
interest requires a universal or uniform solution, and should not merely address problems
that are common to all states.
Federal action should be sensitive to each state's ability to bring a unique blend of resources
and approaches to common problems.
Unless the national interest is at risk, federal action should not preempt additional
state action.
Federal action should depend on risk-based priorities and cost-benefit analysis and should
avoid inflexible earmarking.
4.4
Unfunded Federal Mandates. Although unfunded federal mandates may reflect well-intentioned
policy goals, they often impose substantial cost and regulatory burdens on states. Federal action
increasingly has relied on states to carry out policy initiatives without providing necessary funding
to pay for these programs, thereby robbing states of their right and responsibility to set priorities
and develop policies that best meet local needs.
In New York V. United States, 112.S.CT. 2408 (1992), the U.S. Supreme Court unequivocally
reaffirmed the vitality of state governments in the federal system as separate and independent
political entities. The Court held that state governments cannot and should not be treated as mere
subdivisions or agents of the federal government. States must be free to maintain the integrity of
their governmental structures and governing processes.
State governments cannot, however, function as full partners in our federal system if the
federal government appropriates states' ability to devise and legislate their own solutions to
domestic problems by requiring states to devote their limited resources toward complying with
unfunded federal mandates.
The Governors commend President Clinton for issuing Executive Order No. 12866 on
regulatory planning and review and Executive Order No. 12875 on enhancing the intergovernmental
partnership. The strong commitments made to the reduction of unfunded mandates, increased
flexibility, and regulatory restraint in these executive orders, combined with the administration's
vigorous reinventing government effort, create an important and extensive action agenda. The
Governors support the basic intent and direction of that agenda and pledge their cooperation in
carrying it out.
The Governors call on members of Congress to oppose, and the President to veto, legislation
that imposes further mandates without also providing adequate funding to cover the costs of
implementation. The following additional actions are recommended.
Governors must work with state legislators, county officials, mayors, and city officials in
support of federal legislation that provides state and local governments with real, per-
manent relief from the mandate burden. Congress should act to guarantee that costs to state
and local governments associated with all new mandates are reimbursed by the federal
government.
Legislation must be enacted to require the Congressional Budget Office to report on the
costs imposed by unfunded mandates on state and local governments prior to congressional
action by a full committee and the full House or Senate.
Congress should extend the principle of pay-as-you-go, revenue-neutral requirements, now
used for federal entitlement programs, to any new state and/or local mandate.
A point of order should be provided against any mandate on state or local governments that
violates the above three requirements, with a three-fifths majority necessary to override the
point of order.
State and local elected officials of general purpose governments and their representative
national organizations should be exempted from the Federal Advisory Committee Act and
the Administrative Procedures Act.
The National Performance Review recommendations for broad agency waiver authority and
bottom-up grant consolidation should be enacted.
Burdensome and costly reporting requirements should be reduced through enactment of
the Paperwork Reduction Act.
A summit conference on federalism should be formed to discuss the breakdown of
federalism and to renew our national commitment to the federalist system our founding
fathers envisioned.
4.5
State Task Force on Federalism
The Governors embrace the following four steps to create a process to bring a better balance
to the federal system.
A Governors' working group will be appointed and will extend an invitation to a similar
group that has already been created by the National Conference of State Legislatures
(NCSL) to establish a joint NGA/NCSL task force.
The NGA/NCSL task force will be charged with proposing to NGA and NCSL an action
plan to increase the ability of the states to preserve their constitutional role in the federal
system. The proposal may include a conference of states or other means for collective state
action, concentrating state power and focusing national attention on federalism.
This proposal is to be ratified by the full membership of NGA and NCSL.
The task force will consider legislative, legal, and constitutional means to address imbalance
in the federal system. It will seek fundamental ways states can leverage their ability to
compete. The National Governors' Association, Council of State Governments, Interna-
tional City/County Management Association, National Association of Counties, National
Conference of State Legislatures, National League of Cities, and U.S. Conference of Mayors
will be invited to support the plan and provide input on potential solutions. However, the
Governors, in their role as statewide officers, and state legislators, who have a constitution-
ally specified role in this matter, must be the primary organizers and participants.
5
Ensuring Program Flexibility and Accountability
Steps also must be taken to overcome the imbalance that has resulted from the rapid expansion of
federal programs in the past. The proliferation of detailed federal programs must be ended, and states
must be given greater flexibility in policymaking. Toward these ends, the following changes are
recommended.
The number of joint federal-state programs should be reduced by a sorting out of respon-
sibilities between the two levels of government.
Where federal programs are to be maintained, grant conditions should not be used to force
state program changes not related to the specific purposes for which the grant is provided,
and federal funding should not always require state or local matching funds.
Federal regulations should rely on state laws and procedures for the administration of
federal programs.
Where a joint federal-state role is to be retained, federal grants should be consolidated into
general block grants.
While local governments must be assured that resources will be made available for
priority needs, such as crime control, the federal government should end the bypass-
ing of state governments.
As a specific step toward this more rational allocation of services, the Governors support the
following action steps.
Enact a national policy on income security for the needy with a larger federal responsibility
in exchange for reduced federal responsibilities in other areas.
Develop a national program of medical care for the needy, financed by federal resources.
Provide funding for these programs and preserve the balance of costs within the federal
system by the orderly turnover to states of a comparably priced set of program respon-
sibilities, such as education, community development, transportation, and social services.
Ensure that all states have the fiscal capacity to meet the requirements of the national
income security policy and other federal goals.
6
Administering Intergovernmental Programs
To provide maximum flexibility and an opportunity for innovation, as well as to foster
administrative efficiency and cross-program coordination, intergovernmental grant legislation
should be designed to meet the following principles.
6.1
General. The following principles should apply.
Legislative authorization should be kept current, and all grant programs should be subject
to periodic review.
There should be a congressional determination of a compelling need for federal action.
Legislation should include clear statements of measurable program objectives to reduce
administrative confusion and facilitate judicial interpretation of congressional intent.
States should be actively involved in a cooperative effort to develop policy and
administrative procedures.
Grant requirements should be tied to the purpose of the grant.
The federal government should respect the authority of states to determine the allocation
of administrative and financial responsibilities within states in accordance with state
constitutions and statutes. Federal legislation should not encroach on this authority.
6.2
Financing. The following principles should apply.
Federal revenues that are earmarked for federal aid programs should be made fully available
for the purposes enacted.
Legislation should authorize and appropriate sufficient funds to meet identified program objec-
tives.
Federal assistance funds, including funds that will be passed through to local governments,
should flow through states according to state laws and procedures.
States should-be given flexibility to transfer a limited amount of funds from one grant
program to another, or to administer related grants in a consolidated manner.
Federal assistance appropriations should be enacted on a timely basis, possibly even one
year in advance.
Federal funds or letters of credit should be provided in a timely manner.
6.3
Administrative Requirements. The following principles should apply.
Federally mandated administrative requirements should be uniform across federal agencies
and programs and should allow the substitution of comparable state requirements.
Federal grant programs should not impose unreimbursed administrative costs on
states or localities.
Congress should limit administrative authority over planning and reporting requirements
by specifying the product of planning rather than the process, by delegating planning to
existing state organizations, and by requiring that reporting requirements be clearly jus-
tified.
States should be given broad flexibility in establishing federally mandated advisory groups,
including the ability to combine advisory groups for related programs.
Governors should be given the authority to require coordination among state executive
branch agencies, or between levels or units of government, as a condition of the allocation
or pass-through of funds.
Federal government monitoring should be outcome-oriented and should not focus on
process or procedural measures.
Federal reporting requirements should be minimized, and states should be encouraged to
develop cooperative reporting efforts.
The federal government should not dictate state or local government organization.
States with prior programs and acceptable performance should be excused from detailed
federal requirements or certified as meeting federal requirements.
Federal agencies should accept state and local administrative structures and
program administration.
7
Avoiding Federal Preemption of State Laws and Policies
The Constitution assigns certain responsibilities to the federal government and reserves the
balance to states. Accordingly, the role of the federal government in areas reserved for states and
for local governments should be strictly limited. There should be highly compelling reasons to justify
federal actions that require changes in policies adopted by state and local officials, who are
accountable to the same voters and whose performance is reviewed by them at least as often as the
performance of Congress and the President.
In cases where Congress determines that federal preemption of state laws is in the national
interest, the federal statute should accommodate state actions taken before its enactment. Provision
should be made to permit states that have developed stricter standards to continue to enforce them
and to permit states that have developed substantially similar standards to continue to adhere to
them without change.
The principle of avoiding preemption by the federal government in areas of primary state
responsibility is applicable across the board, covering issues such as education; insurance
regulation; crime control; preservation of the dual banking system; preservation of state
securities regulation, including registration, licensing, and enforcement activities; and
management of state personnel programs.
The federal courts, as well as the Department of Justice, must practice restraint when deter-
mining states' responsibility versus deprivation of constitutional rights. As a result of litigation,
states have been required to impose restrictive standards in our state prisons and schools that go
far beyond the guarantee of constitutional rights.
To avoid state preemption, whenever the federal government is a party to litigation to
secure federal constitutional guarantees, in the area of primary state responsibility, the U.S.
Department of Justiçe should vigorously pursue termination of the litigation as soon as
constitutional concerns are alleviated.
Integral to the operation of state government is the freedom to structure state revenue systems.
It is essential that the federal government not preempt, either directly or indirectly, sources of state
revenues, state tax bases, or state taxation methods.
For example, increases to federal excise taxes, by raising prices, reduce demand and therefore
revenue from existing state excise taxes. At the same time, the federal tax preempts the tax base,
restricting future state use.
Similarly, new federal excise taxes on raw materials risk distorting the prices of final products,
reducing economic growth, and causing industries and states to bear costs unequally.
When considering excise taxes or increases in excise taxes, Congress should carefully consider
the fact that these options have an adverse impact on states' ability to raise revenue or result in a
disproportionate burden among various states. Where federal court decisions restrict state tax
actions, Congress should review these decisions and provide legislative relief when appropriate.
8
Preserving Intergovernmental Communication
The Governors recognize the need for open communication and the free flow of information
among officials at all levels of government. Such communication is essential to the effective and
efficient implementation and administration of intergovernmental programs. The Governors op-
pose efforts by the federal government to restrict employees of state and local governments from
communicating with members of Congress and other federal officials. Although federal funds
should not be used to retain private individuals and firms to influence federal legislation and
regulations, federal statutes and regulations should specifically exempt employees of state and local
governments from the restrictions on lobbying the federal government.
9
Conclusion
The Governors recognize the unique nature of the federal system and the critical importance
of developing a close working relationship with our federal partner. We recognize and support a
continued federal role in protecting the basic rights of all our citizens and in addressing issues
beyond the capacity of individual states. At the same time, the federal government must recognize
that there are problems that can be best addressed at the state and local levels.
The Governors are committed to a revitalized and strong partnership with Congress and
the administration to bring a new balance to federalism. We believe these issues are crucial to
the future viability of our separate governments and to a revival of citizen participation in the
affairs of government.
Permanent policy
Adopted Annual Meeting 1993; revised Winter Meeting 1994 and Annual Meeting 1994.
APPENDIX C
NGA POLICY
PRINCIPLES TO GUIDE THE
RESTRUCTURING OF THE
FEDERAL-STATE PARTNERSHIP
NATIONAL
GOVERNORS
NGA Policy
ASSOCIATION
EC-15. PRINCIPLES TO GUIDE THE RESTRUCTURING OF THE
FEDERAL-STATE PARTNERSHIP
15.1
Preamble
The Governors believe that the next two years will present an enormous opportunity to
restructure the federal-state relationship. The Governors urge Congress to take advantage of this
opportunity both to examine the allocation of responsibilities among the levels of government and
to maximize state flexibility in areas of shared responsibility. However, the Governors believe that
children must be protected throughout this process.
As the federal government begins to move toward a balanced budget, the pressure to reorder
federal priorities and curtail federal grants will increase. Already, numerous proposals for program
consolidation and reduction are on the table.
Although federal budget cuts are needed, the Governors are concerned about the cumulative
impact on the states of federal budgetary decisions. The federal budget must be balanced by true
savings, not by shifting costs to the states.
The Governors recognize the special responsibility of government at all levels in meeting the
needs of children and families. Governors have taken the lead in carrying out these responsibilities
in the past. They believe that the federal government must maintain a financial role in assisting
states and localities to continue to meet these responsibilities.
15.2
Welfare Reform
All Governors recognize the importance of a federal role in financing income assistance to
families and children. However, the continuation of the current welfare system is unacceptable.
Tinkering and changes at the margin will not be sufficient. Congress should create a new, simpler,
and more responsive federal role.
The Governors have not yet reached consensus on whether cash and other entitlement
assistance should remain available as federal entitlements to needy families or whether it should be
converted to a state entitlement block grant. They do agree, however, that in either case states should
have the flexibility to enact welfare reforms without having to request federal waivers. Although the
Governors recognize the legitimate interest of the federal government in setting broad program
goals in cooperation with states and territories, they also believe that states should be free from
prescriptive federal standards, including key aspects of the welfare system, such as work require-
ments, benefits to teen parents and to legal immigrants, and time limits on benefits.
15.2.1
A State Entitlement Block Grant Program. The Governors believe that block grants as discussed in
this section should be entitlements to states and not discretionary grant programs. The Governors
view any block grant proposal as an opportunity for Congress and the president to provide needed
flexibility for states, not as a primary means to reduce the federal budget deficit. Block grants
should include a clear statement of purpose, including mutually agreed-upon goals for the block
grant and the measures that will be used to judge the effectiveness of the block grant. The block
grants must recognize the nation's interest in:
services to children;
moving recipients from welfare to work; and
reducing out-of-wedlock births.
HALL OF THE STATES I 444 NORTH CAPITOL STREET I WASHINGTON D.C. 20001-1572 I 202-624-5300
Under this concept, there should be no micromanagement and states should be required only
to ensure that the funding received is used to provide services for poor children and their families.
Although each state would be required to describe their program in a state plan and to provide
periodic reports to the public, state plans would not be subject to federal approval or federal revision.
Financial and compliance audits would be conducted to ensure that funds were properly spent, and
states would be required to pay back any misspent funds. Specific program outcome data will be
collected by the states and publicly reported.
Block grant funding should be guaranteed over five years at levels agreed to among the states,
Congress, and the administration. The Governors will work with Congress and the administration
to provide appropriate budget adjustments that recognize agreed-upon national priorities, inflation,
and demand for services.
In return for this broad flexibility, states would consider an initial allotment based on the
average of several prior years. Federal funds would be automatically available under a capped
entitlement structure, instead of being subject to annual discretionary appropriations. There would
be no maintenance-of-effort provisions, and states would be allowed to keep all savings as long as
the federal allocation was spent. Unexpended federal funds would remain available to states to
maximize flexibility and to encourage the creation of a "rainy day" fund and would not be subject to
reallocation by the federal government.
To provide for significant changes in the cyclical economy and for major natural disasters, an
additional amount should be set aside each year for automatic and timely distribution to states that
experience a major disaster, higher-than-average unemployment, or other indicators of distress.
15.2.2
An Individual Entitlement Program. If the federal government preserves the federal entitlement of
all needy families to assistance, the Governors believe the current Aid to Families with Dependent
Children (AFDC) program should be replaced by a new national program that establishes clear
policy objectives and certain minimum standards, but provides states with broad flexibility to design
key program elements.
Federal policy objectives and standards could include, but should not exceed, the following.
15.2.2.1
Time-Limited Aid to Families with Dependent Children. Assistance in the form of cash grants
to families and children should be available for a time-limited period; during this time, activities
should take place to help recipients make the transition from welfare to work.
15.2.2.2
Social Contract. The expectations and responsibilities of both the recipient and the govern-
ment should be clearly defined, and incentives and sanctions should be designed to ensure that those
responsibilities are carried out. States should be granted broad flexibility in defining the components
of the social contract, including requirements to begin work before the maximum
Receipt of assistance should be conditional upon ongoing compliance with the social contract.
15.2.2.3
Support Services. State programs could include, as appropriate, the education, training, and
support services necessary to help participants become self-sufficient. Such services should be
funded either as a component of the income support program or through broader block grants.
15.2.2.4
Long-Term Assistance. Continued federal, state, county, and local assistance under the nation-
al program after the time-limited period should be dependent upon a requirement of work or
work-related activities unless no job, community service work opportunity, or community service
placement is available. Federal funds equivalent to the assistance payment should be available to
the states to support the creation of needed work. States should be allowed to create work directly
and through subsidies to the private sector. The ongoing financial needs of children must be
addressed in any time-limited system.
15.2.2.5
Flexibility. States oppose prescriptive federal management of the AFDC program. Federal
guidelines should be reasonably general in nature and states should have broad statutory authority
to adjust benefit levels and to determine the form and condition of assistance. This flexibility should
be in the form of allowable options and should not require federal waivers or plan approval.
States should have the ability to extend assistance on a case-by-case basis, with full federal
financial participation, for a limited period beyond the federal standard in order to ensure that
recipients complete education or job training programs; complete treatment for substance abuse or
other physical or mental impairments; or resolve emergency situations, such as homelessness.
03-29-95 07:25PM FROM ED/OPE POLICY DEV
TO 4013095
P002/003
TALKING POINTS REGARDING BLOCK GRANTS FOR HIGHER EDUCATION
The federal role in postsecondary education is to provide access and equal opportunity for students of
all income levels. Block grants without strict regulations are unlikely to be as targeted as federal aid, and will
not be uniform across states. Moreover, the costs of operating separate state systems would be significantly
higher with 50 systems than with one federally managed system.
Equity:
Benefits may not go to the neediest students: Financial aid provided by the states through block
grants would probably not be targeted to the neediest students. Many state scholarship programs do
not target needy students as is done on the federal level through the need analysis system.
Decreased uniformity of benefits: Block grants would decrease uniformity of benefits across
regions, types of students, and types of institutions. Significant disparities could exist across states.
Decreased diversity: The federal government has an appreciation for diversity in higher education
that is not shared by all states. Some states might choose not to support some types of schools such
as historically black colleges and universities.
Reduction in mobility: State block grants will probably reduce mobility of students. Currently,
many students attend colleges outside of their home states, creating diversity in the higher education
system. If block grants are created, many states will provide benefits only to students who attend
colleges in that state thereby reducing student choice and decreasing the diversity of student bodies.
Money may not be spent on education: If higher education funds are blocked with other social
programs, states may choose to spend money that is now designed for postsecondary education in
other areas thereby reducing access to postsecondary education for lower income students. Today,
seventy percent of student financial aid is provided by the federal government, and many students
would not be able to continue their educations without that money.
Less aid may be available: States may choose to provide grants rather than loans. Accordingly,
fewer dollars may be available to students to pay tuition.
Efficiency:
Duplicative loan systems: Each state would need a loan delivery system to handle loan origination,
servicing and collection; these systems are less efficient when they are small because fixed costs to
design and operate are significant. States would also need to guarantee loans or to raise capital
through state bonds.
Duplicative student aid delivery systems: Currently, need analysis is handled by one federally
administered central processor. If block grants are provided to states, each state would need to
establish a need analysis system and a distribution mechanism.
Increased administrative costs: Fifty state student aid systems would be much more costly to
operate than a federally managed system because the fixed costs of system design and
implementation are significant. Currently, ED has roughly 1300 employees and spends about $500
million to manage all aspects of student aid (including aid delivery, legal assistance, oversight, IG
activities, etc.). Total costs for 50 states systems would be significantly more than what ED
currently spends.
Administrative complexity: Most colleges and universities serve students from multiple states. If
financial aid is provided through block grants, those schools will need to learn the rules and.
03-29-95 07:25PM
FROM ED/OPE POLICY DEV
TO 4013095
P003/003
regulations of multiple states rather than simply administer one federal program.
Complexity for students: Students would be eligible for different amounts of student aid depending
upon where their schools are located: As part of determining where to go to school, students would
need to consider the amount of financial aid available in each state. This information may not be
readily available to students. Lack of information could discourage students from attending
postsecondary education. Additionally, many students would have to repay loans from multiple
states if they attend schools in multiple states.
Lack of accountability: To ensure proper use of block grants, states would need to design systems
to ensure accountability. Such systems, including gatekeeping, are difficult to design; and operate,
and burden on schools will increase if schools must adhere to multiple state accountability systems
rather than one federal system.
DRAFT/WORKING DOCUMENT
3/13/95 - 2:44 pm - Page 1
U.S. Department of Education
NPR Phase II Reinvention Strategies
Accomplishments to Date
The FY 1996 budget for the U.S. Department of Education (ED) totals $30.4 billion (5,060 FTE), and
reflects President Clinton's commitment to education as the key investment in the nation's future. The
President's agenda includes the Goals 2000: Educate America Act, the Improving America's Schools
Act (IASA), the School-to-Work Opportunities Act, and the Student Loan Reform Act-some of the
most significant legislative successes of the first two years of the Clinton Administration. The challenge
presented to the Department by NPR II is how to complete the reinvention started by the
Administration, while sustaining, indeed accelerating, the momentum achieved by these successes in
the face of severe Congressional attacks.
Department of Education Cost Savings
Achieved Prior to NPR II:
Projected Effects 1995 - 2000
Mandatory
Student Loan Reform savings
$6.8 billion
Direct Loans savings
$5.2 billion
Discretionary
86 ED programs eliminated
$4.6 billion
or consolidated in FY 94, 95,
and 96 budgets
ED personnel reduced
$0.1 billion
(5,131 to 4,698)
Total savings
$16.7 billion
While the Department's accomplishments are significant, we recognize that there are still too many
programs, too much regulation, too much concentration on process and too little on performance, and
too big and complex a bureaucracy.
To achieve our long-term aim of a customer-responsive agency, we must focus on the four agency
priorities identified in our strategic plan as essential to our mission: 1) promoting school reform focused
on challenging K-12 standards; 2) creating comprehensive school-to-work systems in every state;
3) promoting access to high-quality postsecondary education and lifelong learning; and 4) becoming a
high-performance organization. The first three priorities respond strategically to the challenge of
meeting the national education goals and the fourth priority aims to make the Department fit for the task.
Improvements would build on the best ideas from research and the field, as we have done in Goals 2000,
IASA, and School-to-Work. We would use modern technology and customer-responsive approaches to
strengthen these priorities, while cutting programs and operations that simply get in the way.
DRAFT/WORKING DOCUMENT
3/13/95 - 2:44 pm - Page 2
Much has been accomplished. The Department is two-thirds of the way toward reinvention. The
challenge now is to move forward in the current political environment to complete our task. Issues to
consider are:
How can we maintain the President's commitment to education and management improvement in the
context of a Congress that is attempting to undermine the President's agenda?
How can we credibly present a long-term vision of where the Department is heading and our sense of
urgency about the need to reform education, while carefully phasing in improvement activities that
reflect the research-driven reforms we just- passed in the 103rd Congress?
How can the Department contribute appropriately to deficit reduction, without blurring the distinction
between the Administration and the opposition, who will propose cuts-far more draconian ones than
ours-regardless of what we do?
Completing Reinvention
Our vision for completing reinvention of the U.S. Department of Education, to support the mission as
defined in our strategic plan, is in four areas:
I.
Performance. Create seven new performance partnerships covering all priority areas of our
strategic plan.
II. Leadership. Continue to expand our family involvement initiative, and launch a reading initiative.
Make the Administration a visible leader on issues that are critical to realizing the national
education goals.
III. Customer-driven operations. Focus operations on improving customer service and performance
rather than process and compliance monitoring, while reducing regulations by at least 50 percent by
1997. Support customers through implementing new, coherent, and sustained research institutes;
building a world-class information system; monitoring for improvement; and providing jargon-free
"Idea Books" that provide research-based information on what works in education.
IV. Streamlining-budget savings and reduced bureaucracy. Focus on core priorities. Cut almost
everything else.
Terminate or consolidate over 100 previously funded programs that are lower priority activities
that distract us from our mission. Delete from the legislation another 124 previously unfunded
programs.
Reduce bureaucracy, with 16 percent fewer staff, fewer principal offices, and fewer regional
offices, and with fewer organizational layers involved in hiring, purchasing and contracting
operations:
Save $3.843 billion more through 2000 by focusing on mission and achieving efficiencies.
DRAFT/WORKING DOCUMENT
3/13/95 2:44 pm - Page 3
These are substantial proposals, and they are each worth undertaking. However, we also urge prudence,
coupled with diligence and continuous improvement. We do not have all the answers and are concerned
that moving too fast could lead to unexpected failures or misconceptions about ED's priorities and
motives, and thereby undermine our effectiveness and serve opponents of the President's agenda.
I. Performance Partnerships
Target: Propose five performance partnerships initially, while moving toward eight partnerships
covering every major ED program area by 1998. ED believes strongly in a results-driven policy, but we
also believe that the performance measures must be valid. In a number of programs substantial work
remains in developing valid performance indicators. While our strategic plan provides for the first time a
set of performance indicators for the Department, data systems to support these indicators are just
beginning to be developed. Few real-world examples exist of the successful application of performance
incentives and accountability approaches in education. We have a strong beginning with Goals 2000 and
School to Work, but we must do more with the field to create better performance measures and more
effective accountability systems.
Proposals for immediate consideration and adoption:
Vocational Education (FY 1996: $1.2 billion). As part of the GI Bill for America's Workers, the
President is proposing a performance partnership that replaces 23 separate vocational education
programs currently authorized under the Carl D. Perkins Vocational and Applied Technology Act
with a single state grant program to support school-to-work systems, based on challenging, industry-
approved performance standards. In return for increased flexibility, the partnership would identify a
state-proposed set of performance measures (e.g., percent of students achieving skill standards;
percent employed in the field they trained for; percent going to postsecondary education) that would
be benchmarked to state academic standards and industry-supported skills standards. Based on these
standards, states would establish accountability systems for local educational agencies, and the
Secretary would be able to hold states accountable using both sanctions and rewards. States would
evaluate their career and technical education systems against these standards and take corrective
actions with poor-performing districts. [S&E savings of $15 million]
Adult Education (FY 1996: $490 million). The President proposes to consolidate 12 federal
programs for adult education and literacy into a single state grant that would do away with separate
state and local categorical programs and set-asides. Federal, state, and local governments would
focus on a core set of performance measures (e.g., learning gains, GED attainment) and use " One-
Stop Career Centers" to refer adults only to programs known to provide high-quality services. [S&E
savings of $8 million].
Campus-Based programs (FY 1996: $1.4 billion). This partnership would consolidate three
programs which provide participating postsecondary institutions with three different forms of student
assistance: Work-Study, Supplemental Education Opportunity Grants, and Perkins Loans. As part
of the partnership, the Department proposes that the Perkins Loan revolving fund be
terminated-with two-thirds of it being returned to the federal government, providing $4 billion in
long-term savings. Pooled funds would be available for student aid of any sort.
DRAFT/WORKING DOCUMENT
3/13/95 - 2:44 pm - Page 4
In exchange for pooled funding, institutions would establish performance measures addressing how
they have effectively packaged campus-based aid with other federal, state, and institutional aid
available to meet student financial need, including aid for students with "exceptional need." [Savings
of $1.7 billion in revolving fund by 2000].
Postsecondary institutional gatekeeping. This partnership would greatly streamline the current
gatekeeping system, which is plagued by regulatory rigidity and complexity, insufficient focus on
quality and results, and lack of sensitivity to the differences among postsecondary providers of
education and training. Postsecondary institutions would be partners with the federal government,
with performance measures based on the level of their financial and administrative capabilities and
on student outcomes.
An institution with high performance in these areas would be given relief from numerous
requirements, such as internal audits and evaluations by the State Postsecondary Review Entities.
would receive program reviews that were more limited in content and frequency, and would be freed
from other specific rules and regulations (for example, delayed disbursement of student loans for
first-time students and detailed requirements on how to provide entrance and exit counseling).
[Substantial S&E savings by postsecondary institutions].
Public Libraries programs (FY 1996: $107 million). This partnership with state grantees would
consolidate programs for public library services and public library construction to support the
attainment of challenging academic performance standards and adult literacy goals. In exchange for
the flexibility afforded by pooled funding, states would enter into performance agreements with the
federal government to increase access to reading, supplementary materials, new technologies, and
out-of-school services supportive of more challenging standards for student performance and adult
literacy, particularly for disadvantaged populations.
States would be asked to target one or more of the following areas for support: access to reading,
supplementary materials, and new technologies to enable all children to read to challenging
standards; public dissemination of curriculum standards and materials that support their attainment;
and access to materials used in literacy training programs to help reinforce adult literacy
development. States would encourage greater cooperation across public libraries, local school
systems, and adult literacy program providers to support programs in the after-hours and summer.
Performance indicators would include the extent to which public libraries offered expanded access to
disadvantaged populations (e.g., through extended hours or mobile or satellite facilities in low-
income areas), as measured by increased rates of book circulation in low-income areas.
Three additional areas-vocational rehabilitation, K-12 education improvement, and services to at-
risk populations-are recommended for later implementation of performance partnerships. The
President's recent legislative accomplishments in these areas have brought significant improvements that
need time to take hold. These partnerships would be phased in over time, using knowledge gained from
waivers and experience with the Goals 2000 Ed-Flex demonstrations. With respect to at-risk
populations, considerable indicator development is required before the federal government could provide
safeguards to ensure these populations are making adequate academic progress.
Vocational Rehabilitation (FY 1996: $2.119 billion). This partnership would cover the Vocational
Rehabilitation State Grants program plus at least. three other smaller categorical programs (Supported
DRAFT/WORKING DOCUMENT
3/13/95 - 2:44 pm - Page 5
Employment State Grants, the Migratory Workers program, and the Projects with Industry program)
that could reasonably be consolidated into state grants.
Performance agreements would replace the existing highly prescriptive legislation, which has
specified everything from how state Vocational Rehabilitation agencies are organized to the
timetable for making an eligibility determination for individual clients. New performance measures
could include the percent of clients in competitive employment and the level of client earnings,
adjusted for client capability. [Move from mandatory to discretionary produces savings of $500
million].
Educational Improvement (FY 1996: $1.985 billion). This partnership would be built around Goals
2000 and include Eisenhower Professional Development State Grants (IASA-II), Safe and Drug-
Free Schools (IASA-IV) and Innovative Educational Program Strategies (IASA-VI). States would
have to put in place a Goals 2000 plan (or its equivalent) with performance targets and student
performance indicators specified in their plan in exchange for the flexibility to pool funds across
authorities to achieve targeted improvements.
At-risk populations-Schoolwide performance partnerships (FY 1996: $7.897 billion). This
partnership would retain funding safeguards for target populations (low-income, limited-English
proficient, migrant, and American Indian students) down to the school building-level, but enable
schools to pool funding streams in exchange for being accountable to districts and states for
improving academic performance.
This partnership would be an extension of the schoolwide option in Title I and in no way means a
reduction in our commitment to members of these populations. Targeting is retained down to the
school level because it preserves a special federal role for traditionally underserved populations who
look to the federal government to ensure access to programs. By focusing on performance at the
point where services are delivered, we can strengthen our commitment to enabling all students to
succeed.
II. ED Leadership: Family Involvement and Reading Initiatives
Target: Use the Department's leadership role to focus national efforts on areas of opportunity,
including 1) family involvement partnership for learning and 2) learning to read. ED does not
necessarily need a program to have an impact on learning. Taking advantage of ED's unique national
position in education, we can mobilize the nation's creative energies and widespread willingness to
support students. Two initial leadership opportunities are:
Family Involvement Partnership for Learning. The ongoing national initiative to encourage families
and the wider community to take a more active role in children's learning is based on 30 years of
research showing that greater family involvement is a critical link to achieving a high-quality
education and a safe, disciplined learning environment for every student. This message has
resonated with the public, businesses, and community and religious groups - over 120 national
organizations have signed on to the initiative.
DRAFT/WORKING DOCUMENT
3/13/95 - 2:44 pm - Page 6
Reading Partnership to Support High Standards. The Department's proposed initiative to encourage
reading is both a natural extension of the family involvement initiative, and a recognition that new
research on teaching reading should enable schools to bring increasing numbers of students to high
reading levels. Reading is the skill that is essential to achieving high standards across all subjects.
The Department's strategic plan includes proposed performance indicators for these initiatives:
Surveys of parents will indicate that larger percentages say that schools are more open and
responsive to their involvement and that students are doing better in school as a result of increased
family involvement.
Between 1994 and 1998, the proportion of students who meet or exceed proficiency levels in reading
on the National Assessment of Educational Progress will increase by 10 percentage points.
III. Customer-Driven Operations
Our value as an agency is determined by what we accomplish for our customers-intermediate
customers, such as states, school systems, postsecondary institutions, and community organizations, and
our ultimate customers, families and students of all ages. While we must insure the integrity of our
programs, we must do nothing to impede the enormous creativity of America's students, teachers, and
education leaders, or to reduce their capacity to meet challenging academic standards. To transform our
agency into a customer-responsive, results-driven organization, as outlined in priority #4, the Department
must radically reinvent its regulatory process and build a world-class information network.
Regulatory Reinvention
Target: Make the regulatory process customer friendly. The Department's Regulatory Reinvention
report to the Vice President has outlined initial steps to achieve this target and implement a true
partnership with our customers. The Department will:
Apply pathbreaking ED principles for regulating: ED will regulate only when essential to improve
the quality and equality of services to its customers-learners of all ages-and then in the most
flexible and least burdensome way possible.
Reinvent the regulatory process by viewing regulations from the perspective of the customer:
1) eliminate obsolete and unnecessary regulations; 2) "scour" regulations for excessive
prescriptiveness; 3) consult customers and partners regularly about regulatory choices, using regional
meetings, electronic options, and other outreach strategies to solicit and respond to customers' views
about ED rulemaking; and 4) carry reinvention into customer service and compliance.
Streamline the process for customers seeking federal grants for education programs:
eliminate 25 percent of grant regulations for FY 1996 and another 25 percent by FY 1997.
Performance measures will track progress with respect to reducing scope (e.g., number of new
regulations) and depth (e.g., specification of detailed processes).
DRAFT/WORKING DOCUMENT
3/13/95 - 2:44 pm - Page 7
Create performance incentive initiatives that apply outcome criteria to assess and reward progress:
replace detailed "how to" rules and allow for experimentation; reward high-performance institutions
with less federal control; and support institutional performance that maintains the integrity of ED
programs for the benefit of the ultimate customers-students.
Provide leadership across the Executive Branch: Convene cabinet agencies to reduce the overall
federal burden of regulations (and associated statutes) on education customers and to involve these
customers in this regulatory review.
Supporting Continuous Performance Improvement
Target: Use new technology and information systems to provide customers with sound information to
support improvements in teaching and learning. Use performance indicators to make informed
improvement decisions at national and provider levels.
Make ED a leader in the knowledge revolution by building an education knowledge network.
Comprehensive electronic access will enable ED to provide our customers-families, schools, and
governments-access to the best practical information available from researchers and educators
around the world. We will work with other federal, state, and private organizations to provide on-
line electronic connections to federal program information-ED reports, state standards, and Goals
2000 plans and information on the most promising strategies for improvement.
New comprehensive education support centers and education laboratories will be linked
electronically to one another and to the Department, and will be accessible on line to districts and
schools around the country.
The "On-line Library" will offer common assistance "tools" (e.g., needs assessments, school
performance profiles, parent satisfaction surveys).
"Idea books" promote best practice through clear, common-sense descriptions and applications
of the best that research has to offer.
Our one-stop shop (1-800-USA-Learn) will offer guarantee call-back within 24 hours and
family-friendly hours to respond to weekend and evening calls.
Use performance for program feedback and resource allocation. The Department can be a leader in
implementing the Government Performance and Results Act by building on its performance-driven
strategic plan. The Under Secretary is meeting quarterly with each program office to develop
performance indicators supporting the Department's strategic plan. ED evaluations are being aligned
to support indicator development, and results are fed into budget determinations.
Organize quality-improvement monitoring teams across the Department to replace current stovepipe
monitoring by individual program offices. As part of an overall reorganization, program monitoring
and expert assistance will be provided through a matrix structure that draws upon expertise across
the agency. Teams monitoring particular regions will model the kind of integrated quality reviews
focused on improving performance we will be expecting states and local education agencies to use.
Cross-agency monitoring teams offer guidance to grant recipients on how to continuously improve
DRAFT/WORKING DOCUMENT
3/13/95 - 2:44 pm - Page 8
programs toward enabling all students to reach challenging standards. Their work will coordinate
with new comprehensive assistance centers to provide continuous, high-intensity assistance to states
and school systems.
IV.
Streamline ED Around Strategic Plan Priorities-Reduce Budget and
Bureaucracy
The day to day management of 240 discrete. programs has seriously taxed the Department's capacity to
focus on its fundamental role in improving education for all students. ED's first-ever strategic plan seeks
to set a limited number of critical priorities, allowing the agency to eliminate what it does not do best and
save the taxpayers money.
Eliminate and consolidate programs
Target: Eliminate through termination or consolidation over 100 ED programs currently funded and
remove from the books another 124 unfunded programs. These proposals focus ED on those programs
most critical to its mission and strategic plan. The rest are eliminated, however justifiable they may be in
their own right.
To achieve these targets, ED will:
Build on significant initial accomplishments: 59 funded ED programs were proposed for elimination
in FY 1994, 1995, and 1996, and another 27 funded programs were reduced by consolidating 39
programs into 12.
Propose for 1997-2000 to eliminate 17 programs totaling $1.7 billion through 2000. Programs
proposed for elimination are of questionable effectiveness (e.g., Magnet Schools); have served their
purpose (e.g., Civil Rights Training and Advisory Services); are inconsistent with ED's mission (e.g.,
International Education Exchange); or are duplicative (e.g., Perkins Loans Capital Contributions).
Cut from legislation 124 unfunded programs that clutter the books and may even require regulation.
Make ED work more efficiently
Target: Cut unnecessary requirements and streamline internal operations while improving customer
service-reduce regulations and grant competitions by half and staff by 16 percent.
Dramatically reduce unnecessary work, including unproductive regulations, unread reports, and
unjustifiable numbers of small discretionary grant competitions. Two examples are: reducing
regulations to cover less than 20 percent of the newly reauthorized IASA programs; and cutting by
50 percent ED discretionary grant competitions by 1997 ( mainly by reducing the number of small
awards (those under $250,000), which currently account for 80 percent of all awards).
Reduce bureaucracy, not services. This redefinition of ED's work translates into better service at
less cost.
DRAFT/WORKING DOCUMENT
3/13/95 - 2:44 pm - Page 9
Reduce staff-down by 800 positions, or 16 percent, from 5,131 FTE to 4,300 FTE over the
years 1995 to 2000.
Restructure the Department
Target: Trim the bureaucracy through consolidations and devolving responsibility and organize key
functions around matrices that link substantive program expertise with essential operations. Cut the
number of principal operating components by 3, and regional offices from 10 to 4.
Eliminate three principal operating components by the beginning of FY 1998 (move OIIA into
Secretary's office, eliminate the office of the Under Secretary and move it into the office of the
Deputy Secretary, and consolidate management and CFO offices).
Consolidate regional offices from 10 to 4, while enhancing their capacity for outreach by creating
four technologically-modern regional offices with sophisticated telecommunications capacity.
Devolve Office of Management authority for smaller actions in personnel and contracting to
principal offices for all grades below a GS-13 and for all contracts below a specified minimum
amount (e.g., $100,000).
Expand the work begun in cross-agency quality monitoring to other essential functions, including
matrix organizations for information dissemination and publication support, performance
measurement and information systems development, in-house staff development, and customer
service. Functional matrices will link program experts with centralized support staff to ensure
optimum performance and effectiveness, for example, by organizing program staff and evaluation
staff in teams to work together on performance indicator and information systems.
Mission-driven budget savings
Target: Reduce spending by the approximately $3.8 billion in savings through 2000 derived from
improved focus on mission. Such selected reductions could be achieved without forsaking the
President's commitment to his education agenda.
Opponents of the President's agenda have put forth proposals that could erase the gains already made.
Fragmentation and near-elimination of the federal role are proposed in the ABC bill (Alexander, Bennett,
and Coats). A super-cabinet Department of Education and Employment proposed by House Republican
leadership (Gunderson and Goodling) would submerge the Department's mission within a mega-
bureaucracy. It is likely that the Republican Congress will continue to put forward substantial budget
reductions in programs for children, especially education, as typified by the initial round of FY 1995
House rescissions.
The Department has already enacted or proposed legislation and policy changes which would save $16.7
billion between 1995 and 2000. Reforms for NPR II that serve our mission and make us work better will
produce additional justifiable cost savings. However, when cost savings are not produced through gains
in efficiency but become the end in themselves, we play directly into the hands of opponents of the
President's education agenda.
DRAFT/WORKING DOCUMENT
3/13/95 - 2:44 pm - Page 10
Unfortunately, the political reality is that whether or not we propose making cuts and savings, Congress
will do it anyway. Moreover, some of the cuts we are proposing based on our mission and strategic plan
are politically sensitive. For example, eliminating the revolving fund seems to fly in the face of the
President's commitment to postsecondary education. Many programs we are proposing to trim or cut out
have strong supporters.
Possible New Savings 1997-2000
($ in millions)
Source
1997
1998
1999
2000
Source Totals
Program reductions
$230
$328
$468
$467
$1,493
Perkins Loan Funds
200
400
500
600
1,700
S&E
20
30
40
60
150
Rehabilitation Services
50
100
150
200
500
Annual Totals
$500
$858
$1,157
$1,326
Grand Total
$3,843
Additional savings are possible for 1997 through 2000:
$1.5 billion from terminating 17 categorical programs (see appendix) including programs which have
served their purpose (e.g., Chapter 1 Capital Expenses, Reading is Fundamental), duplicate other
programs (e.g., Perkins Capital Contributions), or will not contribute to the Department's mission
(e.g., International Education domestic programs). Past sponsorship of some of the programs (e.g.,
Hatfield, Kennedy, Harkin) should be weighed along with evaluation results (e.g., Magnet Schools
are popular, but may not effectively achieve the intended purpose of desegregation).
$4 billion recovered over a ten-year period from the $6 billion Perkins Loan revolving funds now
held at individual schools. Net recovery over the years 1997 to 2000 will yield $1.7 billion. Average
loans of $1,300 at 5 percent interest are awarded to 764,000 students. If the federal government
reclaims the capital it provided over the years, it would reduce funds available for new student aid,
but this could be offset by an increase in loan limits under the Direct Loan program. The reduction
could decrease the appeal of the campus-based performance partnership proposal. As pointed out in
past discussions with Hill staffers, any such cut in campus-based programs would also detract from
the effectiveness of student aid as a wedge issue dividing Congressional Republicans and the
Administration.
$150 million in additional administrative savings is possible by doubling the FTE decrease from 8.4
to 16 percent by 2000. Fewer FTE will be needed with the decrease in programs from elimination or
consolidation. The number of principal offices will also be reduced by combining similar
headquarters staffs, and 10 regional offices will be consolidated into 4.
DRAFT/WORKING DOCUMENT
3/13/95 - 2:44 pm - Page 11
$500 million in savings will be achieved by changing Rehabilitation Services from a mandatory to a
discretionary program. By not providing the currently mandated inflation increase, about $60
million per year is saved. Because the programs will be included in a performance partnership, no
further reduction would be made.
DRAFT/WORKING DOCUMENT
3/13/95 - 2:44 pm - Page 12
Appendix
NPR Phase II: Programs Suggested for Elimination
(Phased in Over Time)
Program
1996 Estimate
(in thousands)
Capital expenses for private school children
$20,000
Inexpensive book distribution
10,300
Magnet schools
111,519
Training and advisory services
14,000
Foreign language assistance
10,912
Training in early childhood education and violence counseling
9,600
Federal Perkins loans capital contributions
158,000
Federal Family Education Loan Program (FFEL) Administrative Account
30,000
Minority teacher recruitment
3,000
Minority science improvement
5,839
International education domestic programs
52,283
Faculty development fellowships
3,732
School, college and university partnerships
3,893
National Diffusion Network
14,480
Eisenhower regional mathematics and science education consortia
15,000
Civic education
4,463
International education exchange
3,000
TOTAL
$470,000
DRAFT/WORKING DOCUMENT
3/13/95 - 2:44 pm - Page 13
Capital Expenses for Private School Children
Formula grant program. This program is a particular interest of Senator Arlen Specter (Chairman,
Labor-HHS-Education Appropriations Subcommittee). Reimburses LEAs for the costs of providing
portable vans and remodeling of space to provide Title I services to children enrolled in religious
schools. There has been a recent decline in the number of states that use their full allocation, since
many of the start-up costs of providing instructional space have already been met.
Inexpensive Book Distribution
Sole source award through a contract with Reading is Fundamental, Inc. (RIF). New legislation
requiring that priority be given to funding projects serving special-needs children has had little
effect, since the turnover rate for projects is very low.
Magnet Schools
Provides grants to LEAs to operate magnet schools that are part of a federally-approved or court-
ordered desegregation plan. New legislation requires the Department to give priority to applicants
who propose to operate new or significantly revised magnet schools or to those that propose
innovative education programs.
Training and Advisory Services
Supports the provision of technical assistance and training by SEAs and Desegregation Assistance
Centers (DACs) to districts that are desegregating on the basis of race, sex, or national origin. SEA
efforts have been too diffuse to have a major impact, so the Department would fund only the DACs
in 1996.
Foreign Language Assistance
Particular interest of Senator Mark Hatfield (Chairman, Appropriations Committee). New legislation
created a two-part program to improve foreign language learning: 1) a project grant program, at least
75 percent of which is to be used at the elementary level; and 2) Incentive Payments to LEAs, based
on a formula of the number of elementary students enrolled in language programs. If the program is
funded in 1996, the Department would fund only project grants.
Training in Early Childhood Education and Violence Counseling
Particular interest of Senator Tom Harkin (Ranking Minority Member, Labor-HHS-Education
Appropriations Subcommittee). Demonstration grant program to institutions of higher education to
recruit and train students for careers in 1) early childhood development and care, and 2) counseling
of young children affected by violence. FY 1996 would provide the third and final year of funding
for a small number of projects that have limited national impact. Proposed for phase-out in 1996.
Federal Perkins Loans Capital Contributions
Supplements postsecondary student loan funds available from the repayment of outstanding loans to
the program's institutional revolving funds. Approximately 2,700 participating institutions currently
administer Perkins Loans revolving funds, with total assets of about $6 billion. Revolving funds
comprise 30 years of Federal capital contributions, institutional matching, and repayment by students
of previous loans.
DRAFT/WORKING DOCUMENT
3/13/95 - 2:44 pm - Page 14
Federal Family Education Loan Program (FFEL) Administrative Account (Discretionary)
Minority Teacher Recruitment
Provides grants to institutions of higher education to support programs to encourage minority
students to enter the teaching profession.
Minority Science Improvement
Provides grants to minority institutions of higher education to develop and maintain science
education programs and to increase the participation of minorities in the fields of science,
mathematics, and engineering. Funds are used to purchase equipment, develop curricular materials,
and support advanced faculty training.
International Education Domestic Programs
Includes 10 domestic programs. These project-grant and fellowship programs support
comprehensive language and area study centers within the United States, research and curriculum
development, and opportunities for American scholars to study abroad.
Faculty Development Fellowships
Authorizes 3- to 5-year grants to institutions of higher education to help current faculty from under
represented groups obtain doctoral degrees and participate in short-term professional development
programs specifically designed to advance the careers of under represented minorities.
School, College, and University Partnerships
Supports projects that improve retention and graduation rates at secondary schools; improve the
academic skills of students at public and nonprofit private secondary schools; increase student
opportunities to continue their education after secondary school; and enhance students' prospects for
employment after secondary school. Partnership agreements can involve high schools, institutions of
higher education, businesses, organizations, and community agencies.
National Diffusion Network
A favorite of many Members of Congress, including Representative Obey, and most recently,
Senator Mark Hatfield. The program identifies and provides information about effective and
promising education practices, and provides technical assistance to help districts and schools
implement those practices.
Eisenhower Regional Mathematics and Science Education Consortia
Created and funded primarily through the efforts of Senator Mark Hatfield. Consortia (10 awards in
1995) focus on providing training and other assistance to classroom teachers, administrators, and
other educators to promote the use of high-level instructional material, teaching methods, and
assessments in classrooms. The consortia operate with the advice of a regional advisory board and
coordinate their activities with other mathematics and science education reform efforts and with
other technical assistance providers.
Civic Education
Appropriations support from Senator Arlen Specter. A single award is provided to the Center for
Civic Education to educate students about the history and principles of the Constitution of the United
DRAFT/WORKING DOCUMENT
3/13/95 - 2:44 pm - Page 15
States, and to foster civic competence and responsibility through the program known as "We the
people The Citizen and the Constitution." Funding is made available to all 435 congressional
districts.
International Education Exchange
Supports awards to independent nonprofit educational organizations to make available to educators
from eligible countries curricula and teacher training programs in civics and government education
and economic education developed in the United States. (From the eligibility criteria in the law it
appears that only one existing organization can qualify for these funds.)