Contact: Ron Roach (916) 441-0490
Getting serious consideration in Congress are proposals to give the responsibilities for operating huge federal health and social services programs to the states. Tens of billions of dollars would be sent to states with few strings attached, or in the form of block grants, to pay for health, education, employment and training programs.
Consideration of this change is tremendous news for taxpayers. If this system of federal funding is adopted, it would afford each state the opportunity to make significant changes in programs that have been shown to be so wasteful when administered at the federal level.
Block granting dollars to states is an important policy objective. Funding needed programs in this manner can reduce costs over time through greater flexibility and efficiency at the state and local levels.
During the recent National Taxpayer Conference (NTC) annual meeting, leaders of taxpayer groups from around the country, including Cal-Tax, focused on the block grant issue.
While the NTC recognizes block grants as potential catalysts for needed reforms, members of the organization warn that such a system should not be used as an excuse to increase state and local taxes because of changes in federal funding.
Increases in local taxes would undercut the opportunity to restructure programs in ways that will decrease future liabilities and change behavior of those who would view current programs as permanent entitlements.
An underlying premise of any block grant funding decision must be flexibility to change benefit levels or modify programs to decrease future liabilities and change behavior. State and local governments must be able to avoid the need for tax increases. They must have freedom to be creative with approaches that will strategically target assistance where it will do the most good without waste.
State and local governments should not see block grants as federal handouts, but rather an opportunity for freedom to make adjustments that will deliver services more efficiently.
#