The federal statistical system in an era of block grants

Business Economics, April, 1996 by Edward J. Spar

The federal statistical system in the block grant era must be viewed from a broad perspective, including issues such as budgets and consolidation. The combination of devolution to the states and declining federal statistical budgets will require the statistical agencies to establish new priorities for their programs and pad new ways to produce and deliver information. If some of the answers to data development and dissemination problems are to be solved through public-private partnerships, funkier research is required in order for both sides to understand how to measure needs and outcomes. The next step is to establish priorities for these issues, determine which must be addressed immediately and begin to look for solutions.

Federal statistical agencies are experiencing the effects of the many radical changes occurring throughout the federal government. These include budget reductions, attempts either to consolidate or to eliminate agencies or even whole departments, and the desire on the part of Congress to "devolve" federal programs to the states. In the current budget climate and the possible changes in the structure of agencies, this article will focus on the current move on the part of Congress to "devolve" federal social programs through block grants to the states, and how this may affect the federal statistical system.

Presently, there are more questions about the issue of block grants, than answers. For example:

1. Can the federal statistical system respond to the needs of state and local governments?

2. To what degree should they respond?

3. Even if it were feasible, should these federal agencies participate in the evaluation of local outcomes?

4. What are the responsibilities vs. capabilities of the federal statistical agencies?

5. What do the states expect from the federal government, especially at a time when these agencies will be expected to do more with less?

6. What can the states do by themselves, what do they want to do, and where do they need help?

CONGRESSIONAL BLOCK GRANTS AND PERFORMANCE PARTNERSHIPS

The current Congress of the United States is undertaking an experiment in restructuring the federal-state relationship for domestic social policy. Whether we call it the end of the welfare state or the dismantling of the responsibility of the federal government to its citizens, much of the decision-making regarding who will receive funding for those in poverty will now "devolve" to the states. This will be accomplished through the creation of block grants, in which many social programs would be consolidated into a handful of grants. States would receive fixed grants to design and run their own programs.

Earlier block grant experiences provided important lessons; the most successful grants had provisions to measure and assess impact, and the least effective were those for which accountability was missing.

In 1988 a General Accounting Office report: "Block Grant, Federal-State Cooperation in Developing National Data Collection Strategies," pointed out that when there was no national leadership, state reports on block grant activities could not be aggregated to provide a national picture.

The report identified six conditions that can increase data comparability:

1. National leadership in directing the development of model criteria and standardized forms;

2. States' recognition of the need for block grant data;

3. Federal funding to support data collection activities;

4. Designated national-level staff to work with state officials;

5 State officials involvement in the design of the systems; and

6. Federal statutes to encourage cooperation in data collection.

Any proposed legislation (H.R.4, The Welfare Reform Act, although vetoed by the President in its current form, is a good example) that covers the block grants mentioned at the beginning of this article includes requirements for state reporting. For example, any state receiving block grant funds will have data collection and reporting requirements and will have to report aggregate data to the Secretary of Health and Human Services (HHS), including employment status, average earnings, average age of the children, age, race and educational attainment of the adults receiving such assistance. The bill also states: "The Secretary may conduct research on the effects, costs, and benefits of state programs funded under this part." The key word here is "may." This open-ended approach is very different from the Performance Partnership approach discussed below. The bill also allocates $10 million to the Census Bureau annually to pay for an expansion of the Survey of Income and Program Participation to evaluate the impact of block grants for temporary assistance for needy families.

The Council of Governor's Policy Advisors and the Rockefeller Institute of Government conducted a survey of states to determine the degree of preparedness for block grants on the part of states. Although most states were actively planning for the devolution of program responsibility to the states, several states were taking a "wait and see" approach that included minimal effort to plan. The report emphasized the need for faster data collection, data sharing and more efficient, linked-data systems for social services. What is not known is how many states do not currently have the technical capability to develop these systems.