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