Development of Federal Grant programs and policy

• 1860s: Land grants to promote higher education• 1887: first cash grants for agricultural experiment

stations• 1930s: grants for health, welfare, labor• 1960s-2000s: grant program explosion

– 1962 – 160 programs

– 1967 – 379 programs

– 1995 – 618 programs

Development of Federal Grant programs and policy

• Equal Opportunity Act (1964) “War on Poverty”– Title II-A: Community Action Programs

• Purpose: to stimulate local communities to develop programs to attack poverty

• Up to 90% federal financing of approved projects

• “…developed, conducted, and administered with the maximum feasible participation of residents…”

Development of Federal Grant programs and policy

• 1966: Demonstration (Model) Cities Act– “…improving quality of urban life…the most

critical domestic problem facing the United States…”

– Small number (10-20) of model cities to be designated for generous and assistance. 63 were included.

– Demonstration agencies to be closely tied to local elected officials’ discretion

Development of Federal Grant programs and policy

• 1966: “Creative Federalism” hearings– duplication and overlap of programs– Lack of uniformity across programs

• Failure of federal priorities to recognize local needs

• Variety of matching fund requirements

• Promoted programs based on “easy money”

– Uncertainty about amounts and timing– Grantsmanship more important than needs

Development of Federal Grant programs and policy

• 1967: The Green Amendment– Local poverty agencies must be designated by

state/local governments– Shift in emphasis from political action to

service provision

Develop Development of Federal Grant programs and policy

• Nixon’s “New Federalism”– General Revenue Sharing– Block grants

• Urban community development (CDBG)• Manpower training (CETA)• Never enacted

– Education– Transportation– Rural community development– Law enforcement

CDBG Objectives

• Benefit low- and moderate-income persons

• Prevent of eliminate slums or blight

• Meet urgent community needs

Unique Characteristics of CDBG

• Predictable flow of funds to states, localities

• Flexible, locally controlled use

Development of Federal Grant programs and policy

• Omnibus Budget Reconciliation Act, 1981– Consolidated 57 categorical grants into 9 block

grant programs– “Everything that can be run by state and local

governments we shall turn over to state and local governments”

– Small Cities Community Development Grants

Distribution of CDBG funds

• State and local officials are important in determining redistributive effects of CDBG funds

• Tendencies of state/local governments – targeting CDBG funds varies

– tend to spread benefits widely

• Benefit coalitions shape federal program outcomes• Benefit coalitions with a strong federal partner are

more likely to succeed in obtaining targeted funds

Factors affecting CDBG Targeting

• Unemployment in the state

• Proportion of funds allocated by state officials

• Competitiveness of state politics

• Changes in other federal aid

• Community needs