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Federal Block Grants: Boondoggle or Boon For Local Government?

Critics cite waste, but proposals gain support

By Staff writer of The Christian Science Monitor / February 15, 1995


MENTION ''block grants'' at the Department of Justice and senior officials trot out horror stories.

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The now-defunct Law Enforcement Assistance Administration block grant wasted millions of dollars, they say, by sending checks to localities around the country without proper oversight. A Louisiana sheriff bought a tank for ''crowd control,'' Justice claims, while in Indiana funds went for an airplane that ended up carrying the governor around.

But over at the Department of Housing and Urban Development (HUD), officials talk about block grants more reverently. HUD's 20-year-old Community Development Block Grant Program allows states and cities wide latitude to fight urban blight. In the Marshall Heights section of Washington, D.C., such money helped turn a dying cluster of stores into a shopping center. Across the country, empty lots and shuttered buildings have become parks and community centers.

Federal block grants -- broad aid programs that allow wide local discretion in how the money is used -- are official Washington's latest crush.

Innovation by those closest to problems is the hoped-for effect of block-granting programs. ''Devolution'' of authority to state and local government has gained some appeal, especially with the new Republican majority in Congress and in the statehouses.

House Republicans want to turn much of the federal welfare system into eight block grants, an unprecedented idea for an entitlement program.

They also want to block-grant crime-fighting. Some senators suggest turning Medicaid over to the states as block grants.

President Clinton's proposed budget is sprinkled with new block grants: The Labor Department wants to consolidate 70 job-training programs. HUD wants to combine 12 public-housing programs. The Department of Transportation proposes a new ''trust fund'' -- essentially, a block grant for federal transportation monies.

But are block grants the right kind of government for a broad array of programs?

Thirty years after the first block grant began, the 15 block grants currently in existence account for only about 15 percent of federal outlays to state and local governments. Typically, Congress has set them up for lower-priority programs, says David Walker, author of a new book, ''The Rebirth of Federalism.''

The history of block grants, as the opening anecdotes illustrate, is mixed. But the stories of individual programs themselves are also ambiguous. Though the Law Enforcement Assistance Administration (LEAA) is generally remembered as a failure and Community Development Block Grants generally viewed as a success, pluses and minuses apply to each.

Pluses and minuses

When pressed, a Justice Department official can come up with innovations spawned by LEAA that remain in use today, such as a program that focused on career criminals and one targeting drugs and crime.

At HUD, officials can rattle off stories of swimming pools and tennis courts being built in wealthy suburbs, in the name of ''community development,'' or local officials going to Las Vegas with block-grant money. ''If those happened [and we found out about it],'' a HUD official is quick to add, ''we made them pay it back.''

Stories of waste, fraud, and abuse may be titillating, but they can be found in every corner of government, and with all manner of federal grants.

''The key issue on block grants is really control -- who gets to decide how the money is spent,'' says a federal government expert on block grants. This expert, who dealt with the old law-enforcement block grants from a major city, says that the abuses largely took place early on and that as time went on, the mandate was refined and regulations added. For a variety of reasons, the program died in 1979.

''The reason Justice is so upset now about the [proposed] block grant,'' he says, ''is they won't be able to say they put 100,000 new cops on the street,'' the centerpiece of President Clinton's 1994 crime bill. Clinton has threatened to veto the block-grant bill.

House Republicans want a public-safety block grant that allows a broad range of uses, from hiring new police to buying equipment to funding crime-prevention programs like midnight basketball.

The challenge with any block grant is to marry a national goal with local flexibility and enough oversight to keep the money from becoming a slush fund for state and local officials.