The National Budget: A Tool of Federalism Congress authorizes programs, establishes rules for how programs will operate, decides how much discretion states/local gov’t will have Purpose of national grants –Supply state and local gov’ts with revenue –Establish minimum national standards –Equalize resources among the states –Attack national problems but minimize the growth of national agencies

Types of Federal Grants Project Formula Categorical Block (Flexible) Differences: –How much discretion the national gov’t uses in making the grant decision –What kinds of requirements the national gov’t puts on how the funding can be spent Often overlap within a program

Project Grants Federal Gov’t supports states for specific activities Usually –Competitive process that states apply for –Fixed amount of time for grant –Strict guidelines on spending

Formula Grants For specific purposes Distributed to states based on procedures in granting legislation –Simplest = population

Categorical Grants Made for specific purposes Tightly monitored so money is spent exactly as directed –Most strings attached –Often require states to match percentage of federal dollars

Block Grants For more generalized governmental functions Few requirements or strings Specific amounts set by federal gov’t

Federal Grant Programs National School Lunch Program Community Development Block Grant National research grants (NIH, NSF) Federal Aviation Administration Airport Improvement Program

Explore the website and consider: Which states get the most grants (in $)? What grant categories are the largest?