What is a block grant in government? As part of the American federal system, block grants exist since 1996. Besides, it is one of the three common kinds of grant-in-aid programs below:
- Categorical grants
- Block grants
- General revenue sharing
If you want to get categorical grants, you need to follow the very competitive application process. The award is only for specific programs, limited activities, and with more administrative conditions than other types of grants. There are four kinds of categorical grants as below:
- Project categorical grants – You need to apply to a particular federal agency. They will review the application and they will award the funds on a competitive basis.
- Formula-projected categorical grants – There is a formula to distribute the funds to the states, you can apply to a state agency, and the states will award the fund on a competitive basis.
- Formula categorical grants – The government will distribute the funds to the eligible recipient through a formula
- Open-end reimbursement categorical grants – The amount of funding reflects the number of program participants.
Now, let us move to block grants. What is a block grant in government? It is a form of grant-in-aid from the federal government. The goal is to provide the state and the local government with some amount of funding to support various purposes. It can be community development, law enforcement, public health, or social services.
Block grants allow the state and the local government to have more flexibility to use the funds if they can meet the administrative conditions under the categorical grants. Based on FY2022, currently, there are 22 funded block grants with a total amount of funds of about $59.1 billion.
General revenue sharing offers state and local government funds with few restrictions. At this time, it is no longer operational.
What Are The Examples of Block Grants
If you want to know more about what is a block grant in government, one of the best ways is to find examples. There are three popular block grant programs for social services as below:
The Community Development Block Grant Program
Known as CDBG, this program is under the administration of the Housing and Urban Development agency (HUD). The goal is to develop viable urban communities. Therefore, it supports decent housing and an ideal living environment.
The concern of this program is low and moderate-income individuals. It has offered up to $160 billion in grants by the middle of 2021.
The grant funds are based on a formula, that depends on a community’s needs. For example, it can be overcrowding, population growth, and the extent of poverty.
Mental Health Block Grant
You can call it MHBG, a program that is available since 1981. It has provided millions of dollars to states. The goal of this grant is to deal with mental illness so it can give better treatments.
The government amended the grant in 1986, and the state must develop services after getting some advice from the Mental Health Planning Councils. Their concern is to support family members and non-treating professional persons.
Social Services Block Grant Program
Maybe, you have heard about SSBG, a program that helps the states and territories to design their social service programs to support the needs of the populations there. The Health and Human Services administers this program to reduce dependency and promote self-sufficiency.
Besides, this program is available to protect children and adults from abuse, exploitation, or neglect. By using this grant, individuals who are unable to take care of their life can stay in their homes or find the best arrangements from institutions.
How To Give The Awards
Block grants allow the state and the local government to add their guidelines and distribute a portion of the grant to other institutions. The government will award the grants in one of several methods. The main four are below:
- Competitive – Bidders will submit an application based on their need or merit asking for a specific amount of funds.
- Formula – The government will use an algorithm to allocate the amounts of funds based on objective needs.
- Continuation funding – Prior grants will be renewed
- Pass-through funding – Federal funds are passed to the states so the federal programs can use it, for example, to support transportation.
Advantages And Disadvantages Of Block Grants
The following discussion explains in more detail the arguments from the block grant advocates and the block grant opponents.
The Advantages
Furthermore, the citizens believe that block grants are available to promote social good. According to the block grant advocates, here are the advantages of block grants:
- The federal administrators cannot reach the grassroots needs and priorities easily. Whereas, the state and the local government agencies are closer to the citizen than the federal administrators. Therefore, block grants help a lot to identify the state and the local government needs.
- The state and the local government agencies are more visible to the citizens than the federal administrators. The public can be easier to watch the accountability of the state and the local government spending the fund.
- Since the state and the local government are more visible and have better accountability, they will find the most efficient way to deliver the program services. As a result, they will focus on the flexibility of block grants to produce better programmatic results at a low cost.
- Flexibility is very important for the states and local governments so they can be more innovative and do more experiments using new approaches or challenges.
- Block grant promotes long-term planning which makes them different from categorical grants. It does not require the state and the local government to compete for receiving the fund. Block grants are based on formulas to distribute the award.
- Block grants solve anything unnecessary and wasteful duplication that exists in the current categorical grant programs. Block grants do not have duplication and waste because the states and the localities can set their priorities and allocate funds based on their needs.
- Block grants generate cost savings. The programs reduce the federal administrative costs related to the paperwork requirements. Even though there is no evidence yet about the total administrative costs that have been significantly lowered by converting the categorical grants into block grants.
Critics of Block Grants – The Disadvantages
Back in 2017, there was an attempt to change Medicaid to a block grant program but failed. Luckily, there were several block grant programs still available. For instance, the Community Development Block Grant program (CDBG) from the U.S. Department of Housing and Urban Development. It still exists since 1974.
The critics of block grants came out because of the lack of federal oversight. Also, the proposal to change Medicaid into a block grant program was said to will only endanger the ability of the federal government to ensure the standard level of the service.
Since the block grants have great flexibility to spend the dollars, opponents believe that the federal award can be misused by local agencies. It is almost impossible to track or audit the money from block grants as we can audit the fund of the categorical grants.
To minimize administrative requirements, there are no federal requirements for uniform data, and outcome spending. Therefore, it is not easy to compare the data across the states. To solve this deficiency, Congress has added reporting requirements to certain block grants for documented improvements.
To sum up, what is a block grant in government? For those who disagree about it, it is a disastrous program for the millions of low-income people in the U.S.
The block grants and per-capita caps can disconnect funding from the need. They have a capped amount of federal money and provide it to the states or local governments. Also, they can use the money with little or no oversight at all. According to the Washington Post, block grants mean the presence of massive funding is being cut immediately.
Summary
What is a block grant in government? Block grants give funding to the state and local governments. The goal is to support them in dealing with various purposes.
It can be for funding social services, law enforcement, public health, or supporting more control over the use of the award than the categorical grants.
According to block grant advocates, the grants strengthen the government’s efficiency and the program’s effectiveness. It is because the block grant redistributes power and accountability. From this grant, the federal government involves the state and the local government to become decision-makers.
Also, block grants help a lot to reduce the federal deficit. For example, the Trump Administration’s FY2021 fund request added “Medicaid reform could restore the flexibility, accountability, and integrity, to the State-Federal Partnership”.
The critics of block grants argued that these awards can undermine national objectives. It can be a backdoor that will decrease the government’s expenses on domestic problems. For instance, the opposite side of converting Medicaid into a block grant explains that “block granting Medicaid is a sign of the arbitrary cuts to the disabled individuals, vulnerable seniors, and low-income children”.
As part of the American federal system, block grants exist since 1996. It is one of the three popular kinds of grant-in-aid programs: block grants, categorical grants, and general revenue sharing.
Generally, categorical grants are available with a very competitive application procedure. The grants are only for specific aided programs, for very specific activities with administrative conditions.
Block grants give broader purposes, distributed by formula. The grants give better flexibility in spending the funds, and less administration process than the categorical grants. General revenue-sharing grants have some restrictions on the funding to spend.
FAQ
At this time, here are the most popular questions about: “What is a block grant in government”
What is a formula block grant?
A formula block grant is a funding program you can submit an application, cover the specified requirements, and do not have to compete. The designated recipients can get funds with the help of State Administering Agencies.
Why is it called a block grant?
Block grants are funds from the federal for specific state or local projects. The federal fund supports a block grant but the administrators are the state or the local governments. The funds will support programs related to social welfare.
What is a block grant example?
Block grants are useful for law enforcement, community development programs, and public health.
Who controls block grants?
The administrator of block grants is the state government. The federal government only does little oversight to regulate the use of the money to spend.
What is the purpose of block grants to state or local government?
In the United States, a block grant is a grant-in-aid of a sum of money from the federal government to the U.S. to individual states and local governments. The purpose is to support different programs (social services, community development, and public health)
What is the advantage and disadvantage of block grants?
The advantage of block grants is they support the state’s flexibility in use and it is less restrictive. The disadvantage of the block grant is ineffective funds spent.
What is the biggest matter with federal block grants?
The major problems of block grants are no automatic responses. When communities are vulnerable, block grants cannot respond to the increased need. Also, block grants have less flexibility in funds.
Sources:
- Block Grant: Meaning, History, and Examples
- Block Grants: Perspectives and Controversies
- Block grants would be a disaster. Here’s how we know
