Block grant
Encyclopedia
In a fiscal federal form
of government
, a block grant is a large sum of money granted by the national government to a regional government with only general provisions as to the way it is to be spent. This can be contrasted with a categorical grant
which has more strict and specific provisions on the way it is to be spent.
An advantage of block grants is that they allow regional governments to experiment with different ways of spending money with the same goal in mind, though it is very difficult to compare the results of such spending and reach a conclusion. A disadvantage is that the regional governments might be able to use the money if they collected it through their own taxation systems and spend it without any restrictions from above.
government has provided large sums of money through block grants, under a policy that has come to be known as "devolutionary" or "new federalism
." Block grants replaced the previous policy of revenue sharing
(1972–87).
According to the General Accounting Office, from 1980 to 2001 the number of federal block grant programs went from 450 to 700. The grants are aimed at a wide range of activities from education to healthcare, transportation, housing and counterterrorism.
In the United States, the formulas for how much money states receive favors small states. Most grant programs have a minimum amount per state - usually 0.5% or 0.75% of the total money given to states in the program.
For instance, in 2003, under the State Homeland Security Grant Programs and Critical Infrastructure Protection Grants, Wyoming
, the least populous state, received $17.5 million and California, the most populous state, received $164 million. In fiscal year 2004 Wyoming is guaranteed to receive a minimum of $15 million and California, the most populated state, $133 million. Wyoming receives $35.3 per person and California receives $4.7 per person.
Similar patterns exist for other block grant formulas. An analysis exists in the book Sizing Up the Senate
.
Major criticisms of block grants are that:
Fiscal federalism
As a subfield of public economics, fiscal federalism is concerned with "understanding which functions and instruments are best centralized and which are best placed in the sphere of decentralized levels of government"...
of government
Government
Government refers to the legislators, administrators, and arbitrators in the administrative bureaucracy who control a state at a given time, and to the system of government by which they are organized...
, a block grant is a large sum of money granted by the national government to a regional government with only general provisions as to the way it is to be spent. This can be contrasted with a categorical grant
Categorical grant
Categorical grants are grants, issued by the United States Congress, which may be spent only for narrowly-defined purposes. Additionally, recipients of categorical grants are often required to match a portion of the federal funds...
which has more strict and specific provisions on the way it is to be spent.
An advantage of block grants is that they allow regional governments to experiment with different ways of spending money with the same goal in mind, though it is very difficult to compare the results of such spending and reach a conclusion. A disadvantage is that the regional governments might be able to use the money if they collected it through their own taxation systems and spend it without any restrictions from above.
United States
Since the 1970s, the United StatesUnited States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
government has provided large sums of money through block grants, under a policy that has come to be known as "devolutionary" or "new federalism
New Federalism
New Federalism is a political philosophy of devolution, or the transfer of certain powers from the United States federal government back to the states...
." Block grants replaced the previous policy of revenue sharing
Revenue sharing
Revenue sharing has multiple, related meanings depending on context.In business, revenue sharing refers to the sharing of profits and losses among different groups. One form shares between the general partner and limited partners in a limited partnership...
(1972–87).
According to the General Accounting Office, from 1980 to 2001 the number of federal block grant programs went from 450 to 700. The grants are aimed at a wide range of activities from education to healthcare, transportation, housing and counterterrorism.
In the United States, the formulas for how much money states receive favors small states. Most grant programs have a minimum amount per state - usually 0.5% or 0.75% of the total money given to states in the program.
For instance, in 2003, under the State Homeland Security Grant Programs and Critical Infrastructure Protection Grants, Wyoming
Wyoming
Wyoming is a state in the mountain region of the Western United States. The western two thirds of the state is covered mostly with the mountain ranges and rangelands in the foothills of the Eastern Rocky Mountains, while the eastern third of the state is high elevation prairie known as the High...
, the least populous state, received $17.5 million and California, the most populous state, received $164 million. In fiscal year 2004 Wyoming is guaranteed to receive a minimum of $15 million and California, the most populated state, $133 million. Wyoming receives $35.3 per person and California receives $4.7 per person.
Similar patterns exist for other block grant formulas. An analysis exists in the book Sizing Up the Senate
Sizing Up the Senate
Sizing Up the Senate: The Unequal Consequences of Equal Representation, by Frances E. Lee and Bruce I. Oppenheimer, is a book that analyzes the behavior of United States Senators based on the size of the states they represent....
.
Major criticisms of block grants are that:
- the award process can be manipulated so that grants can be distributed to reward the federal administration's own party (by favoring states with governors of that party, for example);
- at the local level, the same sort of partisan favoritism may occur when the state distributes the funds to local government units;
- dispersing the funds through state or local governments makes federal oversight of their proper use very difficult.
- moderate discretion, used in general purposes by the state from the government, most money in these compared to categorial grants and general revenue sharing