States Use Several Strategies To Cope With Funding Reductions Under Social Services Block Grant

In response to a congressional request, GAO reviewed the implementation of the social services block grant created by the Omnibus Budget Reconciliation Act of 1981.

The social services block grant (SSBG) was created in 1981 and gave states greater program authority. The SSBG eliminated several requirements, including day care, and it reduced federal funding. Between 1981 and 1983, the 13 states GAO visited experienced decreases in funding ranging from 8.3 percent to 20 percent. Changes in federal, state, and other funding were important concerns in establishing program priorities. Although funding in 1982 and 1983 was below 1981 levels, total expenditures for social services increased during this period in 11 of these 13 states. The increase was primarily due to increased state and other nonfederal block grant programs. In 1983, all of the states obtained supplemental jobs bill funds, and several states used more federal Medicaid funds to provide social services. However, considering a national inflation factor, total expenditures declined in 11 of the 13 states. States attempted to maintain program continuity; however, the reduced allocations caused states to reorder the priorities of individual service areas, reduce or eliminate services, and alter client eligibility criteria. Few organizational changes were made under the SSBG, and there was little change in the involvement of state elected officials or the citizen input processes.