What is a Block Grant?
The definition of a Block Grant is a lump sum of federal government funds awarded to a state, county, or city government for use in a general purpose.
The Federal role in administering block grants is less active when compared to other types of grants. They generally do not specify application requirements, negotiate awards, or evaluate the effects. Federally mandated fiscal, administrative, and planning requirements are set to the lowest levels essential to meet the federal goals. The regional grantees are allowed to allocate the grant money at their discretion in accordance with local needs. This provides the regional governments with the flexibility to design programs and distribute resources that target a wide array of issues.
The first U.S. Block Grants
The first five block grants were established by the United States federal government from the mid-60's to the mid-70's. The initial block grants were the Community Development Block Grant, the Partnership for Health Act, the Omnibus Crime Control and Safe Streets Act, the Comprehensive Employment and Training Act, and Title XX of the Social Security Act.
The Partnership for Health Act (PHA) of 1966, also known as Comprehensive Health Planning Act, consolidated separate health program authorizations so that $23 million in grants could be awarded by the states directly to local governments and community non-profits.
The Omnibus Crime Control and Safe Streets Act of 1968 formed the Law Enforcement Assistance Administration (LEAA) and provided over $100 million in grants to states in order to improve local law enforcement and community crime control efforts.
The Comprehensive Employment and Training Act (CETA) of 1973 issued block grants to the Department of Housing and Urban Development for vocational training and summer jobs for the nation's young adults.
In 1974, the Community Development Block Grant (CDBG) was enacted to support community development at a local level. Read more about this important block grant in the next section.
Title XX of the Social Security Act gave grants in 1975 to the states to provide child care for working parents, rehabilitation centers for the disabled, and help for the elderly living alone.
Community Development Block Grant
The Community Development Block Grant (CDBG), as mentioned above, was instated in 1974 and took effect in 1975. It was the first block grant to completely bypass the states completely and award federal funds directly to local city and county governments.
So what is the Community Development Block Grant? The Community Development Block Grant replaced categorical programs that had been administered by the Department of Housing and Urban Development. CDBG funds authorize many local government activities including housing rehabilitation, social service facility maintenance, and general public improvements and economic development. Large counties, cities within major metropolitan areas, and suburban cities with a population greater than 50,000 can apply for a grants under this program. The amount received is calculated by formulas that take into account housing overcrowding, population, population growth lag, dilapidated housing, and poverty levels.
The Community Development Block Grant is noteworthy because it is the longest running HUD program and still exists to this day. As recently as 2005, HUD was provided with $11.5 billion in Community Development Block Grants to award to the states of Louisiana, Texas, Mississippi, Alabama, and Florida in their efforts to rebuild the Gulf Coast after Hurricanes Katrina, Rita, and Wilma.