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State and local governments play a vital role in providing government services. In the most recent decadeor which data are available (1999-2008), programs pro-

vided by State and local governments represented about44 percent o all government spending. More than a thirdo State budgets are devoted to education, 20 percent tohealth care programs, and 14 percent to programs relatedto public saety.1

Yet the recent recession has caused the steepest declinein State tax receipts on record. As a result, State and lo-cal governments have turned to the Federal Governmentor assistance. Through the American Recovery andReinvestment Act o 2009 (Recovery Act) and otherkey actions, including expanded Federal support or

many saety net programs administered by States, theFederal Government has responded to the urgent Stateand local needs. Through the Recovery Act, the FederalGovernment is providing over $280 billion in unds toState and local governments. As discussed urther below,these unds have been used to relieve State budget short-alls and, also, to supplement State spending in such ar-eas as transportation and job training. The Recovery Actalso indirectly helps States by providing grants support-ing State and local priorities directly to organizations,small businesses, or individuals.

While these investments are essential, States continueto struggle to close budget gaps. The Federal Governmentwill continue to examine new ways to assist State andlocal governments as they work to tackle these scal chal-lenges.

Already, Federal grants in aid to State and local gov-ernments are a key source o nancing or State and localprograms. In the most recent decade, Federal grants in aidnanced about one-th o State budgets. Although dataare not yet available, that share will likely increase in theperiod rom 2009-2011 due to the Federal Governmentsactions to stabilize State budgets, discussed urther below.

In 2011, outlays or Federal grants in aid will equal$645.7 billion. As shown in Table 17-1, 49 percent o thisaid will be or health programs, with most o the undinggoing to Medicaid. Medicaidwhich oers health insur-ance to low-income Americanswas established by theFederal Government but is administered by the States.The Federal Government normally matches State medi-cal assistance expenditures at more than hal o the costo covered services, on average, though this share wouldbe increased to 67 percent in 2011 under enacted and pro-posed State scal relie, discussed urther below. In 2011,another 19 percent o the aid will go to income securityprograms; 13 percent to education, training, and social

1 Bureau o Economic Analysis, National Income and Product Ac-counts

services; 11 percent to transportation; and the remainderto a variety o other areas.

Though grant outlays will increase rom 2009 to 2010the amounts spent in 2011 will be somewhat below thosein 2010. In 2009, Federal outlays or grants in aid toStates were $538.0 billion, and these outlays are esti-mated to be $653.7 billion in 2010. The drop-o in 2011will be primarily due to the gradual phase-down o theFederal Governments State and local scal relie eortsdetailed below.

The Federal Government also indirectly provides aid toStates through the Federal tax code. In particular, Stateand local governments can issue bonds that pay interestwhich is exempt rom Federal income taxation, allowing

the States and localities to pay a lower interest rate ontheir debt than they would otherwise.2 Also, State and local personal property and income taxes (or, at the taxpay-ers elections, sales taxes) are deductible rom income ortaxpayers who itemize deductions. This may help Statesand localities indirectly by allowing them to tax at higherrates than they otherwise would. Altogether, these twopolicies will cost the Federal Government $109.2 billionin 2011. Such costs are known as tax expenditures, andChapter 16 o this volume, Tax Expenditures, providesa detailed discussion o the denition and measuremento them. Tax expenditures that especially aid State andlocal governments are displayed separately at the end oTables 16-1 and 16-2.3

Table 17-2 at the end o this chapter includes und-ing or every Federal aid program. An Appendix to thischapter includes State-by-State estimates o major grantprograms.

STATE AND LOCAL FISCAL RELIEF

The recent recession has had a sharply negative eecton State and local nances. When the economy entersrecession, State and local governments, absent policychanges, take in less revenue than they otherwise wouldand also see spending increase on programs that benetthe unemployed or low-income populations. This alsohappens to the Federal Governmentan eect on the

2 The Budget also proposes to continue, with modications, the Build America Bonds (BABs) program, which was created in the AmericaRecovery and Reinvestment Act o 2009 and is scheduled to expire a-ter 2010. Under the BABs program, State and local governments issuebonds that pay taxable interest and, in place o the tax exemption, theFederal government directly pays a subsidy to State and local govern-ments that is equal to a share o the interest paid by the State andlocal governments on the bonds. The modied BABs program has beendesigned to provide more support to State and local governments thando tax-exempt bonds, but at the same cost to the Federal Government.

3As described in that chapter, the estimates o individual tax expenditures are derived independently and the gure in the preceding sentence does not account or interactive eects.

17. AID TO STATE AND LOCAL GOVERNMENTS


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248 ANALYTICAL PERSPECTIVES

Federal budget that is detailed in Chapter 3, InteractionsBetween the Economy and the Budget.

Unlike the Federal Government, though, State govern-ments are constrained in the amount that they can bor-row to cover budget shortalls. All states except Vermonthave either constitutional or statutory requirements thatthey balance their budgets and Vermont consistently pro-

duces a balanced budget without a requirement. Whilethe denition o balance varies across the States, thisconstraint orces States to either cut programs or increasetaxes to oset the eects o the recession on their budgets.This policy response works as a drag on the economy rela-tive to their running decits instead, as State and localemployees and contractors lose their jobs as governmentscut back on programs and taxpayers are let with less dis-posable income due to tax increases.

The Federal Government does not collect inormationon projected amounts by which State and local govern-ments must either cut programs or raise taxes to meettheir balanced budget constraints, but outside researchgroups have attempted to quantiy the size o the State-

level shortalls due to the recent recession. According tothe National Council o State Legislatures in their StateBudget Update: November 2009, combined State budgetshortalls or State scal years 2009 and 2010 were in therange o $291 billion and some States are already pre-dicting additional budget shortalls totaling $55 billion in2011 and $69 billion in 2012.

During times o economic expansion, most States ac-cumulate excess unds in budget stabilization or rainyday accounts. These accounts, along with scal year-end balances, peaked at about $69 billion (more than 11percent o total expenditures) as o the end o 2006, ac-cording to the Fiscal Survey o States published jointlyby the National Association o State Budget Ocers andthe National Governors Association in December 2009.While these were the largest reserves relative to the sizeo State budgets in more than 25 years, they have beeninsucient to cover the large shortalls States have aceddue to the recent recession.

In light o the extraordinary economic and scal cir-cumstances acing State and local governments and thenegative ramications or jobs and the economy, the

Administration worked with Congress last year to en-act temporary relie or State and local governments aspart o the Recovery Act. The Recovery Act will provideover $280 billion in unds to State and local governments.These unds supplement State spending in such areas astransportation and job training. They also go toward re-lieving State budget shortalls. This relie is being pri-marily delivered in two ways:

State Fiscal Stabilization Fund. $53.5 billion in relieis being delivered through the State Fiscal StabilizationFund, most o which goes to State and local education programs. $48.6 billion o this unding is split among theStates based on a combination o a States total popula-tion and its population aged 5-24. O this, $39.8 billionor more than 80 percent, must go toward the ongoing op-

erations (such as to pay or teachers salaries and schoolmaintenance) o public schools, both K to 12 schools andinstitutions o higher education, while the remainder is afexible block grant to the States. In exchange or accepting these unds, States must at least maintain the samesupport or their public education systems as in 2006Most o the remainder o the stabilization und is used tound innovative educational initiatives such as reormingteacher pay to, or instance, attract more highly qualiedteachers into hard-to-sta schools and subjects.

Medicaid Federal matching unds. An estimated $84.5billion in relie to States is being provided through therst quarter o 2011 through a temporary change in theFederal Governments share o Medicaid costs. As noted

the Medicaid program is administered by the States, andthe Federal Government shares in the cost o the pro-gram. Absent the Recovery Act, the Federal Governmentwould match about 57 percent o State medical assistanceexpenditures, on average. For all States, the Recovery Acttemporarily increases the Federal Governments shareo the States Medicaid costs by 6.2 percentage points

Additional relie is provided to States that have sueredhigh increases in unemployment.

Evidence suggests that the Recovery Acts State andlocal scal relie has helped these governments avoid taking steps that would have otherwise harmed economicgrowth and cost jobs. According to an analysis by theCouncil o Economic Advisers (CEA), States that receivedmore Medicaid payment relie through the beginning oJuly had experienced better labor market outcomes, con-trolling or other actors.4 Furthermore, the CEA ounda positive relationship between total Recovery Act payments to the States through the beginning o July andchange in employment in such areas as public saety, education, health care, and other sectors where State govern-ments provide a large amount o nancial support.

In light o the projected shortalls in State and localbudgets and the need to continue bolstering job creationand the economy, the Budget proposes a six-month ex-tension o the Recovery Acts Federal Medical AssistancePercentage (FMAP) relie through the end o June2011. This will help State and local governments to avoidpotential program cuts or tax increases to balance theirFY 2011 budgets. (FY 2011 starts in July 2010 or manyo these governments.)

4 The Economic Impact o the American Reinvestment and RecoveryAct o 2009, September 10, 2009.

Several proposals in the 2011 Budget aect Federal aidto State and local governments and the important rela-

tionships between the levels o government. Highlights othese proposals are presented below.

HIGHLIGHTS OF FEDERAL AID TO STATES AND LOCALITIES


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17. AID TO STATE AND LOCAL GOVERNMENTS 249

Natural Resources and Environment

Grant outlays or natural resources and environmentprograms are estimated to be $8.5 billion in 2011.

The 2011 Budget requests $3.3 billion or the CleanWater and Drinking Water State Revolving Funds (SRFs).The Federal SRF unding provides grants to States or

low-interest loans to communities through a combinationo Federal capitalization, State matches, State leverag-ing, interest, and loan repayments. Since loan interestand principal payments are returned to the program, theSRFs continue to generate unding or new loans evenwithout continued Federal unding. The Federal contri-bution to water and waste water inrastructure has beensubstantially incorporated into SRFs. These Funds, com-bined, now produce approximately $5 billion in repay-ments each year. As the Funds have grown, the need orFederal capitalization will decline over the next decade.Some ongoing contribution will be maintained to ensurethat the neediest communities are adequately served. For2011, the Environmental Protection Agency proposes a

new approach to helping small drinking water systems, aswell as reorms to improve the long-term nancial, mana-gerial, and environmental sustainability o the SRFs. Aspart o that strategy, the Administration is working to en-sure that Federal dollars provided through the SRFs actas a catalyst or ecient system-wide planning; improve-ments in technical, nancial and managerial capacity;and the design, construction and on-going managemento sustainable water inrastructure.

The Budget requests $1.3 billion, a 14 percent increaserom 2010 enacted and the highest level ever, or grantsthat support eligible States and Tribes that implementenvironmental programs. Included in this increase is $25million to aid States in permitting activities or green-house gas (GHG) emissions under the New Source Reviewand Title V operating permits programs. Additionally, theBudget recognizes State scal constraints and providessubstantial increases or select State and tribal programs,including a $45 million increase or State water pollutioncontrol grants and a $58 million increase or air qualitymanagement grants. The Budget includes $30 million ora new tribal multimedia grant program targeted at Tribesand tribal consortia that can implement environmentalprogram requirements on tribal lands.

Transportation

Federal grants support State and local highway, tran-sit, and airport construction programs. For 2011, grantoutlays or transportation are estimated to be $68.2 bil-lion.

Fullling the Presidents campaign promise, the Budgetincludes $4 billion to create a National InrastructureInnovation and Finance Fund to invest in projects o re-gional or national signicance. This marks an importantdeparture rom the Federal Governments traditional wayo spending on inrastructure through grants to specicStates and localities. Established as a new operationalunit within the Department o Transportation, the Fund

will directly provide resources or projects through grantsor loans or a blend o both, and will eectively leveragenon-Federal resources, including private capital. TheFund will allocate resources based on demonstrable meritand analytical measures o perormance. The Fund wilprovide planning, easibility, and analytical capacity tohelp sponsors identiy projects rom around the country

and then careully select the most worthwhile.The Administration recommends extending the cur-

rent surace transportation authorization through March2011, during which time it will work with Congress to re-orm surace transportation programs and put the systemon a sustainable nancing path. Careul considerationis needed to design a Federal surace transportation pro-gram that leads to higher perorming investments, in-creases peoples transportation options, promotes a sustainable environment, and makes the Nations economymore productive. Further, the Federal program mustgenerate the best investments to reduce congestion andimprove saety. To do so, the Administration seeks to integrate economic analysis and perormance measuremen

in transportation planning to ensure that taxpayer dollars are better targeted and spent.

As part o the Presidents Partnership or SustainableCommunities initiative, the Budget includes $530 mil-lion to help State and local governments invest smarterin transportation inrastructure and leverage that investment to advance sustainable development. This is part othe Federal Governments eort to stimulate comprehen-sive regional and community planning eorts that integrate transportation, housing, and other critical invest-ments.

Building on the historic $8 billion down payment pro-vided through the Recovery Act, the Budget includes $1billion or high speed rail which supports the Presidentsve-year, $5 billion pledge in the 2010 Budget. The

Administration is dedicated to working with States andproject sponsors to identiy high speed rail projects thatwill provide the greatest transportation, social, and environmental benets, while maximizing the return on tax-payer dollars.

Community and Regional Development

Grant outlays or community and regional develop-ment programs are estimated to be $22.5 billion in 2011.

The Budget unds $4 billion in State and local pro-grams, including Fireghter Assistance Grants, or equip-ping, training, exercising, and hiring rst responders. Othis amount, unding o $1.1 billion or the Urban AreaSecurity Initiative will direct resources to the metropolitan vicinities with the highest threat based on a risk management methodology. Funding o $600 million providesessential support to the transportation sector through theTransit and Port Security Grant Programs. The Budgetalso supports disaster response and resilience eortsby unding the Disaster Relie Fund (DRF) at $1.95 billion. The DRF is used in the instance o a Presidentially-declared disaster or emergency by the Federal EmergencyManagement Agency to assist State and local govern-


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ments in the response, recovery, and mitigation againstemergency and disaster events.

The Administration supports tribal sel-determinationand will assist tribal governments in enhancing theirmanagement capacity. The Budget provides increasedunding to better compensate Tribes or the work theyperorm in managing Federal programs under sel-deter-

mination contracts and sel-governance compacts. In ad-dition, the Budget includes proposals to oster better co-ordination between the Departments o the Interior andJustice on Indian law enorcement issues.

Education, Training, Employment, and Social

Services

Grant outlays or education, training, employment, andsocial service programs are estimated to be $84.1 billionin 2011.

The Budget supports the Administrations new visionor the Elementary and Secondary Education Act (ESEA).The reauthorized law would encourage States to adopt

higher, clearer standards that set the expectation that ev-ery student will graduate rom high school ready or col-lege and a career. The new law would support dramaticimprovements in the quality o assessments to measurecomplex skills and help teachers identiy and respond tostudents strengths and needs. The reauthorization wouldalso recognize and reward schools or helping studentsmake important gains, even i they are not yet at grade-level, and oer new fexibility or successul States anddistricts to pursue new solutions to helping all studentsmeet high standards. At the same time, the law wouldrequire vigorous eorts to turn around persistently low-perorming schools, applying comprehensive strategiesthat put children rst. In support o these eorts, theBudget provides a $3 billion increase in unding or K to12 education programs authorized in the ESEA and the

Administration will request up to $1 billion in additionalunding i Congress successully completes ESEA reau-thorization. Together, these measures would representthe largest unding increase or K to 12 ESEA programsever requested. The Budget also provides $900 million orSchool Turnaround Grants.

The $4 billion Race to the Top, created by the RecoveryAct, began a competition among States to spur systemicand innovative reorm across our areas: supporting highacademic standards; improving teacher eectiveness anddistributing eective teachers more equitably; using data toimprove achievement; and turning around low-perormingschools. Not all States will receive Race to the Top grants,but the competition itsel has galvanized key stakehold-ers across the Nation to reorm State laws and to developnew plans or liting student achievement. The Budget pro-

vides $1.4 billion to continue the Presidents Race to theTop challenge and to expand the competition rom Statesto school districts that are ready or comprehensive reorm.

Increasing the number o great teachers, especially indisadvantaged schools, will require major new eorts tohelp all teachers improve their skills; recognize and re-ward excellence in the classroom; and help struggling

teachers improve or, i need be, exit the classroom. Todaytaxpayers invest nearly $3 billion a year in a teacher quality block grant that heavily supports investments withlittle evidentiary support or impact on increasing learn-ing. As part o the overhaul o ESEA, the Administrationwill require States taking ormula unds to develop thepreconditions or an eective human capital system

beginning with strong evaluation systems. At the sametime, the Administration will invest $950 million in anew competitive und or States and districts that sup-port bold approaches to recruiting, developing, retainingand rewarding more eective teachers, particularly in thelowest-perorming schools. The Administration is also in

vesting $405 million in supporting successul and innova-tive pathways into teaching and school leadership.

As part o a $1.8 billion investment in the SupportingStudent Success initiative, the Budget unds comprehen-sive supports so that students are mentally and physicallyhealthy and ready to learn. The initiative also reormsthe 21st Century Community Learning Centers programto ocus unding on models that redesign and extend the

school day, week or year to provide additional time or students to engage in academic activities, additional time orenrichment activities, and time or educators to collaborate and improve instruction. Also as part o this initiative, the Budget includes dedicated support or PromiseNeighborhoods, modeled ater the Harlem Childrens Zonewhich aims to improve college going rates by combining arigorous K-12 education with a ull network o supportiveservices in an entire neighborhood. This initiative wouldsupport comprehensive programs that address the needs ochildren and youth in a targeted area rom beore the timethey are born to their attendance in college. The core principle behind this initiative is that combining both eectiveacademic programs and strong health and social servicesystems can combat the eects o poverty and improve theeducation and lie outcomes o children.

The Department o Education unds dozens o programsthat narrowly limit what States, districts, and schoolscan do with unds. Some o these programs have littleevidence o success, while others are demonstrably ailingto improve student achievement. The Presidents Budgeteliminates six programs and consolidates 38 others into11 new programs that emphasize using competition toallocate unds, giving communities more choices aroundactivities, and using rigorous evidence to und whatworks. Building on the Recovery Act, the Administrationalso proposes $500 million to expand the Investing inInnovation Fund, which will expand proven modelsandund and evaluate promising onesor achieving studentsuccess. Finally, the Budget dedicates unds or the rigor-ous evaluation o education programs to permit scalingup what works and eliminating what does not.

The Administration supports pending legislation thatwill establish a new Early Learning Challenge Fundadministered by the Department o Education and theDepartment o Health and Human Services to help Statesimprove the quality o early childhood programs to helpchildren enter school ready to succeed.


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The Budget refects the Administrations investmentin improving science, technology, engineering, and math-ematics (STEM) outcomes and creating the next gen-eration o scientists and engineers who can help driveeconomic growth in the coming decades. The Budget pro-

vides $300 million in new grants to States to develop andimplement curricula and improve teaching and learning

in science and math aligned to new high standards. TheBudget also dedicates $150 million within the Investingin Innovation Fund to competitive grants or school dis-tricts, nonprots, and other organizations to test, vali-date, and scale promising strategies to improve teachingand accelerate student learning in STEM subjects. TheDepartment o Education will work with the NationalScience Foundation and other Federal agencies to iden-tiy the most eective interventions that can help States,schools, and teachers improve STEM outcomes.

The Budget refects the Administrations commitmentto rigorous evaluations that distinguish between whatworks and what doesnt to avoid wasting taxpayer dol-lars. Compared to two years ago, the current request rep-

resents an increase o over 20 percent in the investmentin the development, evaluation, and dissemination o edu-cation interventions that increase student learning andachievement through the Institute o Education Sciences.

Additional unds will be used to evaluate Federal edu-cation programs rigorously, particularly investmentslaunched under the Recovery Act. The increase in edu-cation research and evaluation will provide practitionersand policy makers with eective tools or preparing stu-dents or success in college and the workorce.

Health

Grant outlays or health related programs are estimat-ed to be $317.6 billion in 2011.

In addition to the six-month extension o the RecoveryActs FMAP relie described in the previous section, thisBudget puts orward a robust set o proposals to strength-en Medicaid and the Childrens Health InsuranceProgram (CHIP) program integrity actions, including pro-posals aimed at preventing raud and abuse beore theyoccur, detecting it as early as possible when it does oc-cur, and vigorously enorcing all penalties and recours-es available when raud is identied. It proposes $250million in additional resources that, among other things,will help to expand the Health Care Fraud Prevention &Enorcement Action Team (HEAT) initiative, a joint e-ort by the Departments o Health and Human Servicesand Justice. As a result, the Administration will be betterable to minimize inappropriate payments, close loopholes,and provide greater value or program expenditures tobeneciaries and taxpayers.

The Budget increases resources or the Ryan Whiteprogram to support the care and treatment needs or anestimated 10,000 additional persons living with HIV/

AIDS who are unable to aord health care and relatedsupport services.

Income Security

Grant outlays or income security programs are estimated to be $121.7 billion in 2011.

The Budget provides $7.6 billion or the SpeciaSupplemental Nutrition Program or Women, Inantsand Children (WIC) to ully serve all eligible individu

als. This unding supports more than 10 million participants in the WIC program, which is critical to the healtho pregnant women, new mothers, and their inants. TheBudget also supports a strong Child Nutrition and WICreauthorization package that will ensure that schoolchil-dren have access to healthy meals and to help ulll thePresidents pledge to end childhood hunger. The Budgetprovides $10 billion over 10 years or program reormsaimed at improving program access, establishing highstandards or the nutritional quality o ood available inschool, exploring new strategies or reducing hunger andimproving childrens ood choices, and improving programmanagement.

The President continues to support the nutrition provi-

sions incorporated in the Recovery Act. Participants inthe Supplemental Nutrition Assistance Program (SNAP)will continue to receive enhanced benets at an average

value o about $20 per person per month. The Budget alsoproposes to extend the Recovery Act provision in SNAPthat temporarily eliminates the time limits or certainworking-age, low-income adults without dependents oran additional scal year. This extension helps remove access barriers to SNAP and increase ood purchasing pow-er among some o hardest-to-reach populations.

The Budget provides critical support or young children and their amilies by building on historic increasesprovided in the Recovery Act. The Budget provides anadditional $989 million or Head Start and Early HeadStart to continue to serve 64,000 additional children andamilies unded in the Recovery Act. The Budget also pro

vides an additional $1.6 billion or the Child Care andDevelopment Block Grant (CCDBG), in preparation orreauthorization to expand child care opportunities andimprove health, saety, and outcomes or children. Thisrequest will allow States to provide child care subsidiesto 1.6 million children, approximately 235,000 more thancould have been served without the additional unds.

The Budget includes $3.3 billion or the Low IncomeHome Energy Assistance Program (LIHEAP) to help low-income amilies with their home heating and cooling expenses. In addition, the Administration proposes a trigger mechanism to provide automatic increases in energyassistance whenever there is a spike in energy costs orlarge numbers o amilies in poverty. The trigger allowsthe program to be more responsive to volatile energy mar-kets and to increased demand or energy assistance duringtimes o economic hardship. Using probabilistic scoringthe Administration expects the trigger to provide roughly$2 billion in additional assistance in FY 2011 and $6.5 billion over ten years.

The Administration proposes to allow States to electcash assistance in lieu o low-income housing tax cred-its (LIHTC) or 2010 to nance certain low-income resi-


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dential rental properties, extending a provision in theRecover Act. States would be required to use the cashassistance by December 31, 2012, to nance the construc-tion or rehabilitation (including acquisition) o qualiedlow-income housing projects generally subject to the samerental requirements and recapture rules as properties -nanced with LIHTC. The Department o the Treasury

would be provided additional authority to ensure that thecash assistance is used in compliance with LIHTC rules.

The Presidents Budget requests $19.6 billion or theHousing Choice Voucher program to help more than twomillion extremely low- to low-income amilies with rentalassistance to live in decent housing in neighborhoods otheir choice. The Budget continues unding or all existingmainstream vouchers and provides fexibility to supportnew vouchers that were leased and $85 million in specialpurpose vouchers or homeless and at-risk o homelessnessamilies with children and persons with disabilities. The

Administration remains committed to working with theCongress to ocus the goals and objectives o the program.In addition, the Administration would like to address the

programs costly ineciencies, alleviate the administrativeburdens on the Public Housing Authorities, and establish aunding mechanism that is transparent and predictable inorder to serve more needy amilies.

The Budget provides $9.4 billion or the Project-BasedRental Assistance program to preserve approximately 1.3million aordable rental units through increased undingor contracts with private owners o multiamily proper-ties. This critical investment will help extremely low- tolow-income households to obtain or retain decent, sae,and sanitary housing.

The Budget requests $350 million to und the rstphase o a multi-year initiative to regionalize the HousingChoice Voucher program and convert Public Housing toproperty-based rental assistance. The primary goals othe Transorming Rental Assistance initiative are toimprove the physical condition and management o thepublic housing stock, increase the mobility o assistedamilies, and streamline the Department o Housing andUrban Developments (HUDs) oversight o its rental as-sistance programs.

By providing $250 million in 2011, the Budget continuesHUDs eort to make a range o transormative investments inhigh-poverty neighborhoods where public and assisted hous-ing is concentrated. A central element o the Administrationsplace-based agenda, this Choice Neighborhoods initiative willinvest in public, private, and nonprot partners that havetransormative neighborhood interventions and provide thegreatest returns on Federal investment.

As part o the Presidents Partnership or SustainableCommunities Initiative, the Budget includes $150 millionto help stimulate comprehensive regional and communityplanning eorts that integrate transportation and hous-ing investments that result in more regional and local sus-tainable development patterns, reduce greenhouse gases,and increase more transit accessible housing choices orresidents. HUDs Sustainable Communities Initiative alsoexpands and better coordinates Federal eorts to incentiv-ize State and local governments to plan or and implement

pre-disaster mitigation strategies. Coordinating hazardmitigation eorts with related sustainability goals andactivities will reduce risks while protecting lie, propertyand the environment. Combined with the Department oTransportations unding or strengthening the capacityo States and local governments to make smarter inrastructure investments and the Environmental Protection

Agencys technical assistance, this interagency partnership aims to lower the cost o living while improving thequality o lie in local communities. It will do so by providing more coordinated housing and transportation optionsimproving environmental quality, and better leveragingFederal investments.

The Administration will boost unding orUnemployment Insurance (UI) integrity eorts and pro-pose legislative changes that would reduce improper payments by over $4 billion and employer tax evasion by al-most $300 million over 10 years.

Administration o Justice

Grant outlays or administration o justice programsare estimated to be $5.4 billion in 2011.

The Budget includes $600 billion, an additional $302million, to support the hiring or retention o police ocersin communities across the country. Supporting the hiringo police ocers will help States and communities preventthe growth o crime as the Nations economy recovers.

The Budget includes $538 million, an increase o $120million, to support women victims o violence, includingdomestic abuse and sexual assault victims.

The Budget also provides $330 million or the StateCriminal Alien Assistance Program to assist States andlocalities in identiying, determining the status o, andconducting removal proceedings or incarcerated illegalaliens. The Budget also provides $144 million or prisoner reentry programs, including an additional $100 millionor the Oce o Justice Programs to administer grant programs authorized by the Second Chance Act and $30 million or residential substance abuse treatment programsin State and local prisons and jails. These programsreduce recidivism by providing counseling, job trainingdrug treatment, and other transitional assistance to or-mer prisoners as they reintegrate into the job market andcommunity lie.

The Budget includes $19 million to support 45 additional FBI agents or Indian country and $256 million ingrants and technical assistance to increase public saetyeorts in tribal areas. The unding or additional FBIagents will be provided on a reimbursable basis throughthe Department o the Interior. The Departments oJustice and the Interior will coordinate the deployment oFederal public saety resources to best address the publicsaety needs in Indian Country.

General Government

Grant outlays or general government programs are estimated to be $7.5 billion in 2011.


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The Recovery Act created the Build America Bond pro-gram as an optional new lower cost borrowing incentiveor State and local governments on taxable bonds issuedin 2009 and 2010 to nance new investments in govern-mental capital projects. Under the current program, theDepartment o the Treasury makes direct subsidy pay-ments to State and local governmental issuers in a subsidy

amount equal to 35 percent o the coupon interest on thebonds. The Administration proposes to make the success-ul Build America Bond program permanent at a reduced

subsidy level designed to be approximately revenue neutralin comparison to the Federal tax losses rom traditional taxexempt bonds. The Administration also proposes to expandthe Build America Bond program beyond new investmentsin governmental capital projects to include certain addi-tional program uses or which State and local governmentsmay use tax-exempt bonds under existing law. The proposed

modications to the Build America Bond program would beeective or bonds issued beginning in 2011.

In recent decades, Federal aid to State and local govern-ments has become a major actor in the nancing o certaingovernment unctions. The rudiments o the present systemdate back to the Civil War. The Morrill Act, passed in 1862,established the land grant colleges and instituted certain ed-erally required standards or States that received the grants,as is characteristic o the present grant programs. Federal

aid was later initiated or agriculture, highways, vocationaleducation and rehabilitation, orestry, and public health.In the depression years, Federal aid was extended to meetincome security and other social welare needs. However,Federal grants did not become a signicant actor in FederalGovernment expenditures until ater World War II.

Table 171 displays trends in Federal grants to Stateand local governments since 1960. Section A showsFederal grants by unction. Functions with a substan-tial amount o grants are shown separately. Grants orthe national deense, energy, social security, and veteransbenets and services unctions are combined in the otherunctions line in the table.

Federal grants or transportation increased to $3.0 bil-lion, or 43 percent o all Federal grants, in 1960 ater ini-tiation o aid to States to build the Interstate HighwaySystem in the late 1950s.

By 1970 there had been signicant increases in the rel-ative amounts or education, training, employment, socialservices, and health (largely Medicaid).

In the early and mid-1970s, major new grants werecreated or natural resources and environment (construc-tion o sewage treatment plants), community and regionaldevelopment (community development block grants), andgeneral government (general revenue sharing).

Since the late 1970s changes in the relative amountsamong unctions refect steady growth o grants or health(Medicaid) and income security. The unctions with the larg-est amount o grants are health; income security; education,training, employment, and social services; and transporta-tion, with combined estimated grant outlays o $500.9 bil-lion, or more than 93 percent o total grant outlays in 2009.

The increase in total outlays or grants overall since1990 has been driven by increases in grants or health,which have increased more than six-old, rom $43.9 bil-lion in 1990 to $268.3 billion in 2009. The income security;education, training, employment, and social services; andtransportation unctions also increased substantially, butat a slower rate than or health.

Section B o the table distributes grants between mandatory and discretionary spending.

Funding or grant programs classied as mandatory is determined in authorizing legislation. Fundinglevels or mandatory programs can only be changed bychanging eligibility criteria or benet ormulas established in law and are usually not limited by the an

nual appropriations process. Outlays or mandatorygrant programs were $328.2 billion in 2009. The threelargest mandatory grant programs are Medicaid, withoutlays o $250.9 billion in 2009; Temporary Assistanceor Needy Families, $17.9 billion; and child nutritionprograms, $15.1 billion.

The unding level or discretionary grant programs isdetermined annually through appropriations acts. Outlaysor discretionary grant programs were $209.7 billion in2009. The largest our discretionary programs in 2009were Federal-aid Highways, $36.0 billion; Tenant BasedRental Assistance, $16.0 billion; Accelerating Achievementand Ensuring Equity (Education or the Disadvantaged)$15.8 billion; and Special Education, $12.5 billion.

Table 172 at the end o this chapter identies discre-tionary and mandatory grant programs separately. Formore inormation on these categories, see Chapter 11Budget Concepts in this volume.

Section C o Table 171 divides grants among three major categories: payments or individuals, grants or physical capital, and other grants. Grant outlays or paymentsor individuals, which are mainly entitlement programsin which the Federal Government and the States sharethe costs, have grown signicantly as a percent o totalgrants. They increased rom about a third o the totalin 1960 to slightly less than two-thirds in the mid-1990sand have remained about that proportion since then.

These grants are distributed through State or local governments to provide cash or in-kind benets that consti-tute income transers to individuals or amilies. The majorgrant in this category is Medicaid. Temporary Assistanceor Needy Families, child nutrition programs, and housingassistance are also large grants in this category.

Grants or physical capital assist States and localitieswith construction and other physical capital activitiesThe major capital grants are or highways, but there arealso grants or airports, mass transit, sewage treatmentplant construction, community development, and otheracilities. Grants or physical capital were almost hal o

HISTORICAL PERSPECTIVES


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total grants in 1960, shortly ater grants began or con-struction o the Interstate Highway System. The relativeshare o these outlays has declined, as payments or indi-

viduals have grown. In 2009, grants or physical capitalwere $75.2 billion, 14 percent o total grants.

The other grants are primarily or education, trainingemployment, and social services. These grants were 20percent o total grants in 2009.

Section D o this table shows grants as a percentage oFederal outlays, State and local expenditures, and grossdomestic product. Grants have increased as a percent-age o total Federal outlays rom 11 percent in 1990 to 15

Table 171. TRENDS IN FEDERAL GRANTS TO STATE AND LOCAL GOVERNMENTS(Outlays in billions o dollars)

Actual Estimate

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2009 2010 2011

A Distribution o grants by unction:

Natural resources and environment 01 02 04 24 54 41 37 40 46 59 63 88 85Agriculture 02 05 06 04 06 24 13 08 07 09 09 12 11

Transportation 30 41 46 59 130 170 192 258 322 434 554 722 682

Community and regional development 01 06 18 28 65 52 50 72 87 202 174 212 225

Education, training, employment, and social services 05 11 64 121 219 171 218 309 367 572 740 1117 841

Health 02 06 38 88 158 245 439 936 1 248 1 978 2683 2946 3176

Income security 26 35 58 94 185 279 368 584 687 909 1032 1218 1217

Administration o justice * 07 05 01 06 12 53 48 48 58 54

General government 02 02 05 71 86 68 23 23 21 44 42 71 75

Other * 01 01 02 07 08 08 08 21 26 35 91 91

Total 70 109 241 498 914 1059 1353 2250 2859 4280 5380 6537 6457

B Distribution o grants by BEA category:

Discretionary N/A 29 102 210 533 555 633 940 1167 1817 2097 2814 2509

Mandatory N/A 80 139 288 381 504 720 1310 1692 2463 3282 3723 3948

Total 70 109 241 498 914 1059 1353 2250 2859 4280 5380 6537 6457

C Composition:

Current dollars:

Payments or individuals1 25 37 87 168 326 501 773 1444 1826 2739 3567 3945 4192

Physical capital 1 33 50 71 109 226 249 272 396 487 608 752 1113 1075

Other grants 12 22 83 222 362 309 309 410 546 933 1061 1478 1191

Total 70 109 241 498 914 1059 1353 2250 2859 4280 5380 6537 6457

Percentage o total grants:

Payments or individuals1 353% 341% 362% 336% 357% 473% 571% 642% 639% 640% 663% 604% 649%

Physical capital 1 473% 457% 293% 219% 247% 235% 201% 176% 170% 142% 140% 170% 166%

Other grants 174% 202% 345% 445% 396% 292% 228% 182% 191% 218% 197% 226% 184%

Total 1000% 1000% 1000% 1000% 1000% 1000% 1000% 1000% 1000% 1000% 1000% 1000% 1000%

Constant (FY 2005) dollars:

Payments or individuals1 133 188 373 535 711 835 1076 1757 2032 2739 3282 3549 3719Physical capital 1 196 279 314 300 449 395 376 500 565 608 635 925 870

Other grants 123 192 550 1 034 1 111 666 530 579 670 933 911 1249 981

Total 453 659 1237 1869 2271 1896 1981 2836 3268 4280 4829 5723 5570

D Total grants as a percent o:

Federal outlays:Total 76% 92% 123% 150% 155% 112% 108% 148% 160% 173% 153% 176% 168%

Domestic programs2 180% 183% 232% 217% 222% 182% 171% 216% 220% 235% 197% 230% 225%

State and local expenditures 148% 155% 201% 240% 274% 220% 189% 228% 222% 245% 259% N/A N/A

Gross domestic product 14% 16% 24% 32% 34% 26% 24% 31% 29% 34% 38% 45% 42%

E As a share o total State and local gross investments:

Federal capital grants 246% 255% 254% 260% 354% 302% 219% 260% 220% 220% 212% N/A N/A

State and local own-source nancing 754% 745% 746% 740% 646% 698% 781% 740% 780% 780% 788% N/A N/ATotal 1000% 1000% 1000% 1000% 1000% 1000% 1000% 1000% 1000% 1000% 1000% N/A N/A

N/A: Not available* 50 million or less1 Grants that are both payments or individuals and capital investment are shown under capital investment2 Excludes national deense, international aairs, net interest, and undistributed osetting receipts


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Table 172. FEDERAL GRANTS TO STATE AND LOCAL GOVERNMENTSBUDGET AUTHORITY AND OUTLAYS(In millions o dollars)

Function, Category, Agency and Program

Budget Authority Outlays

2009Actual

2010Estimate

2011Estimate

2009Actual

2010Estimate

2011Estimate

National Deense

Discretionary:

Department o Homeland Security:

Federal Emergency Management Agency:State and Local Programs 190 48 26 82 49

Energy

Discretionary:

Department o Energy:Energy Programs:

Energy Eciency and Renewable Energy 12,342 297 385 455 5,425 5,161

Mandatory:

Tennessee Valley Authority Fund 544 502 588 544 502 588

Total, Energy ......................................................................................................................................... 12,886 799 973 999 5,927 5,749

Natural Resources and Environment

Discretionary:

Department o Agriculture:

Farm Service Agency:Grassroots Source Water Protection Program 5 5 5 5

Natural Resources Conservation Service:

Watershed Rehabilitation Program 3 5 2 1 5 2

Watershed and Flood Prevention Operations 164 20 155 276 103

Forest Service:

State and Private Forestry 262 316 307 266 387 311

Management o National Forest Lands or Subsistence Uses 5 3 3 5 3 3

Department o Commerce:National Oceanic and Atmospheric Administration:

Operations, Research, and Facilities 647 164 164 536 105 105

Pacic Coastal Salmon Recovery 80 80 65 87 74 75

Procurement, Acquisition and Construction 7 6

Department o the Interior:

Oce o Surace Mining Reclamation and Enorcement:Regulation and Technology 66 71 60 57 62 69

Abandoned Mine Reclamation Fund 28 3 76 48 20

United States Geological Survey:Surveys, Investigations, and Research 6 6 6 5 6 6

United States Fish and Wildlie Service:

State and Tribal Wildlie Grants 75 90 90 68 78 81

Cooperative Endangered Species Conservation Fund 75 85 85 95 98 99

Landowner Incentive Program 16 20 16

National Park Service:

Urban Park and Recreation Fund 1 1

National Recreation and Preservation 60 68 51 61 66 55

Land Acquisition and State Assistance 24 40 50 52 28 28

Historic Preservation Fund 84 80 55 83 85 76

Environmental Protection Agency:

State and Tribal Assistance Grants 9,294 4,938 4,772 3,446 5,630 5,526

percent in 2009. Grants as a percentage o domestic pro-grams were 20 percent in 2009. As a percentage o totalState and local expenditures, grants have increased rom19 percent in 1990 to 26 percent in 2009.

Section E shows the relative contribution o physicalcapital grants in assisting States and localities with grossinvestment. Federal capital grants are estimated to be 21percent o State and local gross investment in 2009.


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Table 172. FEDERAL GRANTS TO STATE AND LOCAL GOVERNMENTSBUDGET AUTHORITY AND OUTLAYSContinued(In millions o dollars)



2009Actual

2010Estimate

2011Estimate

2009Actual

2010Estimate

2011Estimate

Hazardous Substance Superund 40 40 43 53 333 291

Leaking Underground Storage Tank Trust Fund 295 97 97 81 156 135Total, discretionary ............................................................................................................................... 11,219 6,111 5,850 5,153 7,465 7,001

Mandatory:


Bureau o Land Management:Miscellaneous Permanent Payment Accounts 110 101 91 108 102 96

Minerals Management Service:

National Forests Fund, Payment to States 9 5 5 9 5 5

Leases o Lands Acquired or Flood Control, Navigation, and Allied Purposes 39 2 2 39 2 2

States Share rom Certain Gul o Mexico Leases 25 2 2 25 2 2

Coastal Impact Assistance 250 250 25 172 187

Oce o Surace Mining Reclamation and Enorcement:Payments to States in Lieu o Coal Fee Receipts 85 85 95 46 48 68

Abandoned Mine Reclamation Fund 90 147 163 65 89 110

Bureau o Reclamation:Bureau o Reclamation Loan Program Account 6 5 6 5


Federal Aid in Wildlie Restoration 367 508 628 304 376 490

Cooperative Endangered Species Conservation Fund 54 59 65 54 59 65

Sport Fish Restoration 497 477 455 446 500 503

National Park Service:Land Acquisition and State Assistance 8 1 1 1 3

Department o the Treasury:

Financial Management Service:Payment to Terrestrial Wildlie Habitat Restoration Trust Fund 5 5 5 5

Corps o Engineers-Civil Works:South Dakota Terrestrial Wildlie Habitat Restoration Trust Fund 21 5 4 5 4

Total, mandatory ................................................................................................................................... 1,566 1,652 1,511 1,132 1,371 1,535

Total, Natural Resources and Environment ........................................................................................ 12,785 7,763 7,361 6,285 8,836 8,536

Agriculture

Discretionary:

Department o Agriculture:Departmental Management:

Departmental Administration 15 7

National Institute o Food and Agriculture:

Extension Activities 498 520 504 467 607 585

Research and Education Activities 296 318 380 277 325 414

Integrated Activities 63 65 30 30 50 40

Agricultural Marketing Service:Payments to States and Possessions 2 2 3 14 2 2

Farm Service Agency:

State Mediation Grants 4 4 4 4 5 5

Total, discretionary ............................................................................................................................... 878 909 921 799 989 1,046Mandatory:


Agricultural Marketing Service:Payments to States and Possessions 49 55 55 19 38

Farm Service Agency:

Aquaculture Assistance 50 50

Commodity Credit Corporation Fund 88 223 43 88 223 43

Total, mandatory ................................................................................................................................... 187 278 98 138 242 81

Total, Agriculture .................................................................................................................................. 1,065 1,187 1,019 937 1,231 1,127


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2009Actual

2010Estimate

2011Estimate

2009Actual

2010Estimate

2011Estimate

Commerce and Housing CreditMandatory:

Department o Commerce:National Oceanic and Atmospheric Administration:

Promote and Develop Fishery Products and Research Pertaining to American Fisheries 31 8 8 6 29 14

Federal Communications Commission:

Universal Service Fund 1,602 2,096 2,157 1,602 2,096 2,157

Total, mandatory ................................................................................................................................... 1,633 2,104 2,165 1,608 2,125 2,171

Total, Commerce and Housing Credit ................................................................................................. 1,633 2,104 2,165 1,608 2,125 2,171

Transportation

Discretionary:

Department o Transportation:Federal Aviation Administration:

Grants-in-aid or Airports 1,100 3,938 3,856 3,459Grants-in-aid or Airports (non-add obligation limitations)1 3,515 3,515 3,515

Federal Highway Administration:

Emergency Relie Program 766 886 567

Highway Inrastructure Investment 27,212 2,417 11,185 7,078

Highway Inrastructure Programs 650 59 267

Appalachian Development Highway System 10 75 36 18

Federal-aid Highways 36,049 38,910 40,118

Federal-aid Highways (non-add obligation limitations)1 39,715 41,107 41,363

Miscellaneous Appropriations 167 293 44 147 181

Miscellaneous Highway Trust Funds 7 72 61 58

Federal Motor Carrier Saety Administration:Motor Carrier Saety Grants 256 449 397

Motor Carrier Saety Grants (non-add obligation limitations)1 307 310 310

National Highway Trac Saety Administration:

Highway Trac Saety Grants 502 713 694Highway Trafc Saety Grants (non-add obligation limitations)1 620 620 621

Federal Railroad Administration:Emergency Railroad Rehabilitation and Repair 20

Intercity Passenger Rail Grant Program 90 6 18

Rail Line Relocation and Improvement Program 25 35 40 40

Capital Assistance or High Speed Rail Corridors and Intercity Passenger Rail Service 8,000 2,500 1,000 2 388 1,225

Alaska Railroad Rehabilitation 1

Federal Transit Administration:

Transit Capital Assistance 7,188 570 2,459 1,884

Fixed Guideway Inrastructure Investment 750 76 252 192

Job Access and Reverse Commute Grants 33 17 11

Interstate Transer Grants-transit 1 1 1 1

Washington Metropolitan Area Transit Authority 150 150 33 78

Formula Grants 1 740 635 373

Grants or Energy Eciency and Greenhouse Gas Reductions 75 11

Capital Investment Grants 2,557 1,998 1,820 2,483 2,617 2,425

Technical Assistance and Workorce Development 29 4

Rail Transit Saety Oversight Program 16 8

Discretionary Grants (Highway Trust Fund, Mass Transit Account) 16 17 17

Greenhouse Gas and Energy Reduction 5

Greenhouse Gas and Energy Reduction (non-add obligation limitations)1 53

Livable Communities 46

Livable Communities (non-add obligation limitations)1 30 7

Formula and Bus Grants 7,264 9,252 8,844

Formula and Bus Grants (non-add obligation limitations)1 9,247 8,343 8,272

Pipeline and Hazardous Materials Saety Administration:

Pipeline Saety 35 39 45 35 40 44


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2009Actual

2010Estimate

2011Estimate

2009Actual

2010Estimate

2011Estimate

Total, discretionary ............................................................................................................................... 47,136 5,734 3,060 55,338 72,080 68,063

Total, obligation limitations (non-add)1 53,404 53,895 54,441

Mandatory:

Department o Homeland Security:United States Coast Guard:

Boat Saety 119 115 106 110 114 105

Department o Transportation:Federal Aviation Administration:

Grants-in-aid or Airports (Airport and Airway Trust Fund) 1 3,686 3,476 3,373

Federal Highway Administration:Federal-aid Highways1 29,761 42,586 42,217

Right-o-way Revolving Fund Liquidating Account 12 12

Miscellaneous Appropriations 1 55 2 55

Federal Motor Carrier Saety Administration:Motor Carrier Saety Grants1 300 305 307

National Highway Trac Saety Administration:Highway Trac Saety Grants1 543 587 600

Federal Transit Administration:

Greenhouse Gas and Energy Reduction1 38

Livable Communities1 307

Formula and Bus Grants1 9,247 8,361 8,001

Total, mandatory ................................................................................................................................... 43,645 55,485 54,949 100 169 105

Total, Transportation ............................................................................................................................. 90,781 61,219 58,009 55,438 72,249 68,168

Community and Regional Development

Discretionary:

Department o Agriculture:Oce o the Secretary:

Healthy Foods, Healthy Neighborhoods Initiative 35 23

Rural Utilities Service:Distance Learning, Telemedicine, and Broadband Program 331 88 50 122 54 83

Rural Water and Waste Disposal Program Account 1,919 551 534 585 966 1,086

Rural Housing Service:

Rural Community Facilities Program Account 298 77 37 207 144 114

Rural Business_Cooperative Service:

Rural Business Program Account 239 139 58 116 189 133

Department o Commerce:

Economic Development Administration:

Economic Development Assistance Programs 408 255 246 243 422 481


Federal Emergency Management Agency:

State and Local Programs 4,694 3,991 4,001 2,529 2,870 6,251

United States Fire Administration and Training 4 4 4 3 5 5

Mitigation Grants 11

Disaster Relie 703 3,301 1,268 6,525 7,478 4,636Department o Housing and Urban Development:

Community Planning and Development:

Community Development Fund 6,867 4,405 4,336 6,408 7,230 8,022

Community Development Loan Guarantees Program Account 6 6 5 8

Brownelds Redevelopment 10 18 22 32 29

Empowerment Zones/enterprise Communities/renewal Communities 16 17 17

Oce o Lead Hazard Control and Healthy Homes:

Lead Hazard Reduction 240 139 139 168 196 183


Bureau o Indian Aairs and Bureau o Indian Education:

Operation o Indian Programs 155 159 159 149 158 158

Indian Guaranteed Loan Program Account 21 26 8 9 35 9


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2009Actual

2010Estimate

2011Estimate

2009Actual

2010Estimate

2011Estimate

Appalachian Regional Commission 67 67 67 62 65 67

Delta Regional Authority 13 13 13 9 13 13Denali Commission 12 13 12 60 79 57


Mandatory:

Department o Housing and Urban Development:Community Planning and Development:

Community Development Loan Guarantees Program Account 3 3 3 3

Neighborhood Stabilization Program 116 1,260 1,107

Community Development Loan Guarantees Liquidating Account 3

Total, mandatory ................................................................................................................................... 3 3 .......... 119 1,260 1,107

Total, Community and Regional Development ................................................................................... 15,990 13,255 10,967 17,368 21,221 22,474

Education, Training, Employment, and Social Services

Discretionary:

Department o Commerce:National Telecommunications and Inormation Administration:

Public Telecommunications Facilities, Planning and Construction 18 18 20 24 23

Inormation Inrastructure Grants 2 1 1

Department o Education:

Oce o Elementary and Secondary Education:

Indian Student Education 118 123 123 114 108 121

Impact Aid 1,361 1,272 1,272 1,297 1,457 1,281

Accelerating Achievement and Ensuring Equity 25,807 15,864 15,044 15,797 22,157 20,928

Education Improvement Programs 5,703 5,098 3,501 5,247 5,442 5,244

State Fiscal Stabilization Fund 53,542 12,430 32,117 8,995

Oce o Innovation and Improvement:

Innovation and Instructional Teams 822 958 5,805 653 885 1,128

Oce o Sae and Drug-Free Schools:Supporting Student Success 610 289 1,786 651 597 511

Oce o English Language Acquisition:

English Learner Education 686 744 794 667 714 724

Oce o Special Education and Rehabilitative Services:

Special Education 22,831 12,367 11,776 12,536 16,553 17,705

Rehabilitation Services and Disability Research 739 148 288 165 525 502

American Printing House or the Blind 23 25 25 21 30 25

Oce o Vocational and Adult Education:

Career, Technical and Adult Education 1,923 1,997 1,924 2,005 2,074 1,953

Oce o Postsecondary Education:

Higher Education 353 364 353 387 520 387

Oce o Federal Student Aid:

Student Financial Assistance 64 64 61 67 51

Institute o Education Sciences 310 48 55 34 120 128

Hurricane Education Recovery 60 120

Department o Health and Human Services:

Administration or Children and Families:

Promoting Sae and Stable Families 63 62 62 63 62 62

Children and Families Services Programs 13,507 8,944 9,941 8,793 12,118 10,467

Administration on Aging:

Aging Services Programs 1,569 1,493 1,602 1,435 1,577 1,560


Bureau o Indian Aairs and Bureau o Indian Education:

Operation o Indian Programs 103 159 111 98 138 108

Department o Labor:

Employment and Training Administration:

Training and Employment Services 5,886 3,208 3,378 3,768 5,357 3,201

Community Service Employment or Older Americans 419 549 325 168 315 388


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2009Actual

2010Estimate

2011Estimate

2009Actual

2010Estimate

2011Estimate

State Unemployment Insurance and Employment Service Operations 92 87 87 35 95 84

States Paid Leave Fund 49 11Unemployment Trust Fund 1,364 970 964 953 1,230 1,022

Corporation or National and Community Service:Domestic Volunteer Service Programs, Operating Expenses 11

National and Community Service Programs, Operating Expenses 47

Operating Expenses 464 695 803 315 430 648

Corporation or Public Broadcasting 461 506 466 461 506 466

District o Columbia:

District o Columbia General and Special Payments:Federal Payment or Resident Tuition Support 35 35 35 35 35 35

Federal Payment to Jump Start Public School Reorm 20 20 20 20

Federal Payment or School Improvement 54 74 52 54 74 52

National Endowment or the Arts:

National Endowment or the Arts: Grants and Administration 71 56 53 51 65 53

Institute o Museum and Library Services:Oce o Museum and Library Services: Grants and Administration 258 265 248 248 260 262


Mandatory:

Department o Education:

Oce o Special Education and Rehabilitative Services:

Rehabilitation Services and Disability Research 2,975 3,085 3,085 2,766 2,986 3,080



Promoting Sae and Stable Families 371 372 372 388 331 365

Social Services Block Grant 1,700 1,700 1,700 1,854 2,118 1,832

Department o Labor:Employment and Training Administration:

Federal Unemployment Benets and Allowances 686 686 686 276 507 720

Total, mandatory ................................................................................................................................... 5,732 5,843 5,843 5,284 5,942 5,997Total, Education, Training, Employment, and Social Services .......................................................... 145,008 62,325 66,785 73,986 111,715 84,143

Health

Discretionary:

Department o Agriculture:Food Saety and Inspection Service:

Salaries and Expenses 51 50 50 49 50 50


Health Resources and Services Administration:

Health Resources and Services 2,847 2,847 2,847 3,060 2,987 2,987

Centers or Disease Control and Prevention:

Disease Control, Research, and Training 2,358 2,434 2,358 2,331 2,397 2,335

Substance Abuse and Mental Health Services Administration 2,669 2,746 2,755 2,888 2,870 2,963

Departmental Management:Public Health and Social Services Emergency Fund 394 426 426 671 277 277

Prevention and Wellness Fund 700 158 314

General Departmental Management 139 147 147 239 286 284

Department o Labor:

Occupational Saety and Health Administration:Salaries and Expenses 104 104 117 104 104 117

Mine Saety and Health Administration:




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2009Actual

2010Estimate

2011Estimate

2009Actual

2010Estimate

2011Estimate

Mandatory:

Department o Health and Human Services:Centers or Medicare and Medicaid Services:

Grants to States or Medicaid 254,890 292,678 285,213 250,924 275,383 296,726

Childrens Health Insurance Fund 13,834 13,529 13,504 7,547 8,903 10,285

State Grants and Demonstrations 609 583 629 498 980 1,036

Child Enrollment Contingency Fund 2,113 73 82 200 200

Departmental Management:

General Departmental Management 10 10 9 11

Total, mandatory ................................................................................................................................... 271,456 306,873 299,428 258,969 285,475 308,258

Total, Health .......................................................................................................................................... 280,727 315,636 308,137 268,320 294,613 317,594

Income Security

Discretionary:


Food and Nutrition Service:Commodity Assistance Program 384 251 250 361 289 275

Special Supplemental Nutrition Program or Women, Inants, and Children (WIC) 7,360 7,257 7,603 6,480 7,704 7,467

Department o Health and Human Services:Administration or Children and Families:

Low Income Home Energy Assistance 5,100 5,100 3,300 4,533 4,993 3,648

Reugee and Entrant Assistance 532 531 678 544 571 675

Payments to States or the Child Care and Development Block Grant 4,120 2,120 2,918 2,346 3,387 3,195

Department o Homeland Security:Federal Emergency Management Agency:

Emergency Food and Shelter 300 200 100 284 216 100

Department o Housing and Urban Development:Public and Indian Housing Programs:

Public Housing Operating Fund 4,455 4,760 4,781 4,449 4,574 4,775

Revitalization o Severely Distressed Public Housing (HOPE VI) 120 198 65 317 289 262

Native Hawaiian Housing Block Grant 10 13 10 4 7 9

Tenant Based Rental Assistance 16,217 18,084 19,355 15,981 17,739 19,076

Project-based Rental Assistance 292 232 322 279 277 322

Public Housing Capital Fund 6,414 2,475 2,024 3,207 4,044 4,394

Prevention o Resident Displacement 1

Native American Housing Block Grant 1,152 700 574 644 878 721

Choice Neighborhoods 313 8

Transorming Rental Assistance 350 53

Community Planning and Development:

Homeless Assistance Grants 3,167 1,852 2,034 1,484 1,872 2,173

Home Investment Partnership Program 4,071 1,807 1,633 1,915 2,242 4,034

Housing Opportunities or Persons with AIDS 308 332 337 317 333 304

Rural Housing and Economic Development 26 15 26 18

Permanent Supportive Housing 3 10 15

Housing Programs:

Homeownership and Opportunity or People Everywhere Grants (HOPE Grants) 4 Housing or Persons with Disabilities 248 297 89 337 291 295

Housing or the Elderly 763 817 271 979 921 949


Unemployment Trust Fund 3,504 3,267 3,421 3,110 3,619 2,309


Mandatory:


Agricultural Marketing Service:

Funds or Strengthening Markets, Income, and Supply (section 32) 993 1,056 982 929 1,056 982


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2009Actual

2010Estimate

2011Estimate

2009Actual

2010Estimate

2011Estimate

Food and Nutrition Service:

Supplemental Nutrition Assistance Program 5,872 6,355 6,149 5,624 6,627 6,237Commodity Assistance Program 21 21 21 8 9 9

Child Nutrition Programs 15,003 16,863 19,221 15,083 17,136 19,040



Payments to States or Child Support Enorcement and Family Support Programs 4,282 4,788 4,255 4,352 4,710 4,324

Low Income Home Energy Assistance 2,000 1,460

Contingency Fund 5,000 4,355 1,072 4,329 3,406

Payments to States or Foster Care and Adoption Assistance 7,218 7,381 7,456 6,858 7,403 7,442

Child Care Entitlement to States 2,917 2,917 3,717 2,952 2,925 3,417

Temporary Assistance or Needy Families 17,059 17,059 17,408 17,861 17,754 17,595


Unemployment Trust Fund 807 612 31 807 612 31

Department o the Treasury:Departmental Oces:

Grants to States or Low-Income Housing Projects in Lieu o Low-Income Housing CreditAllocations 2,930 3,615 2,265 29 4,975 2,685

Total, mandatory ................................................................................................................................... 62,102 60,667 67,860 55,575 67,536 66,628

Total, Income Security .......................................................................................................................... 120,645 110,960 118,158 103,169 121,818 121,705

Social Security

Mandatory:

Social Security Administration:

Federal Disability Insurance Trust Fund 24 28 21 45 26 25

Veterans Benefts and Services

Discretionary:

Department o Veterans Aairs:

Veterans Health Administration:Medical Services 650 755 855 650 755 855

Departmental Administration:

Grants or Construction o State Extended Care Facilities 325 100 85 129 148 207

Grants or Construction o State Veterans Cemeteries 42 46 46 30 32 32

Total, discretionary ............................................................................................................................... 1,017 901 986 809 935 1,094

Total, Veterans Benefts and Services .... ............. .............. ............. .............. .............. ............. ........... 1,017 901 986 809 935 1,094

Administration o Justice

Discretionary:


Departmental Management and Operations:

National Security Special Events, State and Local Reimbursement 20 18

Department o Housing and Urban Development:

Fair Housing and Equal Opportunity:Fair Housing Activities 54 71 60 46 53 63

Department o Justice:

Legal Activities and US Marshals:Assets Foreiture Fund 21 21 21 14 21 21

Oce o Justice Programs:

Justice Assistance 139 180 170 246 185 204

State and Local Law Enorcement Assistance 4,294 1,687 1,434 2,335 2,664 1,937

Juvenile Justice Programs 338 394 263 345 333 348

Community Oriented Policing Services 1,181 537 720 227 606 737

Violence against Women Prevention and Prosecution Programs 584 394 441 318 541 451

Equal Employment Opportunity Commission:



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2009Actual

2010Estimate

2011Estimate

2009Actual

2010Estimate

2011Estimate

Federal Drug Control Programs:

High-intensity Drug Tracking Areas Program 213 239 210 217 195 211

State Justice Institute:State Justice Institute: Salaries and Expenses 4 5 5 4 5 5


Mandatory:

Department o Justice:

Legal Activities and US Marshals:Assets Foreiture Fund 537 516 447 413 403 500

Oce o Justice Programs:

Crime Victims Fund 591 660 750 519 567 697


Departmental Oces:Treasury Foreiture Fund 184 150 150 100 180 150

Total, mandatory ...................................................................................................................................1,312 1,326 1,347 1,032 1,150 1,347

Total, Administration o Justice .......................................................................................................... 8,166 4,884 4,721 4,810 5,783 5,372

General Government

Discretionary:


Administration or Children and Families:Disabled Voter Services 1

Department o the Interior:United States Fish and Wildlie Service:

National Wildlie Reuge Fund 14 14 14 14 14 14

Insular Aairs:Assistance to Territories 51 57 56 50 55 54

Trust Territory o the Pacic Islands 1 1

District o Columbia:District o Columbia Courts:

Federal Payment to the District o Columbia Courts 248 261 247 241 309 306

Deender Services in District o Columbia Courts 52 55 55 45 65 63

District o Columbia General and Special Payments:

Federal Support or Economic Development and Management Reorms in the District 54 60 46 54 60 46

Election Assistance Commission:Election Reorm Programs 106 75 78 105 75

Election Data Collection Grants 6 4

Total, discretionary ............................................................................................................................... 525 522 418 489 613 559

Mandatory:


Forest Service:

Forest Service Permanent Appropriations 578 493 453 522 584 453

Department o Energy:

Energy Programs:

Payments to States under Federal Power Act 3 3 3 3 3 3


Customs and Border Protection:Reunds, Transers, and Expenses o Operation, Puerto Rico 84 92 90 92 92 90


Minerals Management Service:Mineral Leasing and Associated Payments 1,839 1,648 1,960 1,839 1,648 1,960

National Petroleum Reserve, Alaska 16 5 12 16 5 12

Geothermal Lease Revenues, Payment to Counties 13 13

Oce o Surace Mining Reclamation and Enorcement:

Payments to States in Lieu o Coal Fee Receipts 123 142 28 254 78


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Table 172, Federal Grants to State and LocalGovernments-Budget Authority and Outlays, providesdetailed budget authority and outlay data or grants bybudget account, including proposed legislation. This ta-ble displays discretionary and mandatory grant programsseparately.

OTHER INFORMATION ON FEDERAL AID

TO STATE AND LOCAL GOVERNMENTS

Additional inormation regarding aid to State and localgovernments can be ound elsewhere in this Budget andin other documents.

Major public physical capital investment programsproviding Federal grants to State and local governmentsare identied in Chapter 20, Federal Investment.

Data or summary and detailed grants to State andlocal governments can be ound in many sections o aseparate volume o the Budget entitledHistorical Tables.Section 12 o that document is devoted exclusively togrants to State and local governments. Additional inor-mation on grants can be ound in Section 6 (Compositiono Federal Government Outlays); Section 9 (FederalGovernment Outlays or Investment: Major PhysicalCapital, Research and Development, and Education andTraining); Section 11 (Federal Government Payments orIndividuals); and Section 15 (Total (Federal and State andLocal) Government Finances).

In addition to these sources, a number o other sourceso inormation are available that use slightly dierent

concepts o grants, provide State-by-State inormationprovide inormation on how to apply or Federal aid, ordisplay inormation about audits.

Current and updated grant receipt inormation by State and local governments can be ound onUSAspending.gov. This public website also containscontract and loan inormation and is updated twice permonth. Additional current and updated inormationabout grants provided specically by the Recovery Actcan be ound onRecovery.gov.

The Bureau o the Census in the Department oCommerce provides data on public nances, includingFederal aid to State and local governments. The Bureausmajor reports and databases on grant-making include:

Federal Aid to States, a report on Federal grantspending by State or the most recently completedscal year.

The Consolidated Federal Funds Report is an annual document that shows the distribution o Federaspending by State and county areas and by local governmental jurisdictions.

The Federal Assistance Awards Data System(FAADS) provides computerized inormation aboutcurrent grant unding. Data on all direct assistanceawards are provided quarterly to the States and tothe Congress.

The Federal Audit Clearinghouse maintains an online database (harvester.census.gov/sac) that pro




2009Actual

2010Estimate

2011Estimate

2009Actual

2010Estimate

2011Estimate


National Wildlie Reuge Fund 7 10 10 9 10 10Insular Aairs:

Assistance to Territories 28 28 28 33 27 29

Payments to the United States Territories, Fiscal Assistance 149 177 146 149 177 146

Department-Wide Programs:

Payments in Lieu o Taxes 382 395 409 521 395 409


Alcohol and Tobacco Tax and Trade Bureau:

Internal Revenue Collections or Puerto Rico 473 422 439 473 422 439

Internal Revenue Service:Build America Bond Payments 2,870 3,315 2,870 3,315

Corps o Engineers-Civil Works:Permanent Appropriations 4 4 4 4 4 4

Total, mandatory ................................................................................................................................... 3,699 6,289 6,869 3,702 6,491 6,948

Total, General Government .................................................................................................................. 4,224 6,811 7,287 4,191 7,104 7,507Total, Grants .......................................................................................................................................... 695,141 587,920 586,589 537,991 653,665 645,714

Discretionary ........................................................................................................................... 303,238 146,870 145,910 209,743 281,376 250,924

Transportation obligation limitations (non-add)1 53,404 53,895 54,441

Mandatory ................................................................................................................................ 391,903 441,050 440,679 328,248 372,289 394,7901 Mandatory contract authority provides budget authority or these programs, but program levels are set by discretionary obligation limitations in appropriations bills and outlays are

recorded as discretionary This table shows the obligation limitations as non-additive items to avoid double counting


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vides access to summary inormation about auditsconducted under OMB Circular A133, Audits toStates, Local Governments, and Non-Prot Organi-zations. Inormation is available or each auditedentity, including the amount o Federal money ex-pended by program and whether there were auditndings.

The Bureau o Economic Analysis, also in theDepartment o Commerce, publishes the monthlySurveyo Current Business, which provides data on the nationalincome and product accounts (NIPA), a broad statisti-cal concept encompassing the entire economy. These ac-counts include data on Federal grants to State and localgovernments. Data using the NIPA concepts appear inthis volume in Chapter 28, National Income and Product

Accounts.The Catalog o Federal Domestic Assistance is a pri-

mary reerence source or communities wishing to applyor grants and other domestic assistance. The Catalog isprepared by the General Services Administration and

contains a detailed listing o grant and other assistanceprograms; discussions o eligibility criteria, applicationprocedures, and estimated obligations; and related inor-mation. The Catalog is available on the Internet at www.cda.gov.

APPENDIX: SELECTED GRANT DATA BY STATE

This Appendix displays State-by-State spending orthe selected grant programs to State and local govern-ments shown in the ollowing table, Summary o GrantPrograms by Agency, Bureau, and Program. The pro-grams selected here cover more than 80 percent o totalgrant spending.

The rst summary table shows the obligations or eachprogram. The second summary table, Summary o GrantPrograms by State, shows the obligations or each Stateor these programs. Both o these tables combine und-

ing provided in the Recovery Act with unding providedthrough other authority.

The third summary table, Summary o Recovery ActGrants by Agency, Bureau, and Program shows obliga-tions made rom unding provided by the Recovery Act orthe grant programs rom the rst summary table. Forthose grant programs created by the Recovery Act, such as

the State Fiscal Stabilization Fund, the amounts in thistable are the same as in the rst table. The ourth summary table, Summary o Recovery Act Grants by Stateshows the amounts or each State rom unding providedby the Recovery Act.

The individual program tables display obligations oreach program on a State-by-State basis, consistent withthe estimates in this Budget. These tables combine unding provided by the Recovery Act with unding providedthrough other authority. Each table reports the ollowinginormation:

The Federal agency that administers the program.

The program title and number as contained in the

Catalog o Federal Domestic Assistance.

The budget account number rom which the pro-gram is unded.

Act

Government Grants State and Local 2009 2010 2011

Documents

Transcript of Government Grants State and Local 2009 2010 2011