Block Grants Brought Funding Changes and Adjustments to Program Priorities

Pursuant to a congressional request, GAO reported on how states are using their expanded authority to allocate funds under block grants, focusing on differences between state-administered funding and funding under prior categorical programs.

GAO found that changes in federal funding levels for various activities varied considerably. Only one block grant has received increased appropriations each year, and only one other program has experienced funding increases over the level of categorical programs. Federal funding for the other five block grants reviewed remained from 1 to 29 percent below funding levels under categorical programs. Strategies used by states to offset these reductions include: (1) use of available funds from prior categorical programs; (2) transferring funds among block grants; and (3) increasing the use of state funds. GAO also found that most program areas that were funded under categorical programs have continued to receive funding under block grants, but states have used their expanded authority to establish their own funding priorities. Some programs have not been extensively affected by block grants because of legislative provisions controlling the allocation of funds among certain program areas.