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Federal grants system needs reinvention.

The federal aid system is more fragmented than ever, according to a new report by the U.S. Advisory Commission on Intergovernmental Relations (ACIR).

In 1992, 92 percent of federal grants to state and local governments were funded by only 10 percent of federal-aid money. Despite some successes in consolidating grants in the 1980s, the federal aid system still had 5u6 micro-grants in 1992--82 more than in 1980.

"While federal aid to local governments has declined steeply since 1978, special interests and federal micro-managers have tightened their grip by dividing up the pie," said ACIR member Edward G. Rendell, Mayor of Philadelphia. "Federal help of this sort is counterproductive," he added. "City problems are complex, and we need flexibility to solve them properly."

In 1992, the three largest grant programs--Medicaid, Highway Planning and Construction, and Family Support Payments to States (AFDC)--received 50 percent of all grant monies. Direct federal aid to local governments now amounts to only about 12 percent of all grant funding.

The ACIR report provides support to Vice President Gore's National Performance Review proposal to consolidate 55 existing programs into six broad, flexidble grants and to give state and local governments "bottom-up" authority to consolidate their use of small (under $10 million) grants.

Federal Grant Programs in Fiscal Year 1992: Their Numbers, Sizes, and Fragmentation Indexes in Historical Perspective is available for $10 from ACIR, Suite 450 South, 800 K Street, N.W., Washington, D.C. 20575; (202) 653-5640.
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Publication:Nation's Cities Weekly
Date:Oct 25, 1993
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