BLOCK GRANTS

WHEREAS, many federal and state policymakers support consolidating and streamlining the large number of federal grant-in-aid programs for states by pooling federal funding for various programs and services into lump-sum payments, or block grants, to states at substantially reduced funding levels; and

WHEREAS, past experience indicates that funding increases for block grants lag far behind those for categorical programs that perform similar functions; and

WHEREAS, large entitlement funds such as Medicaid and AFDC where federal funding automatically increases as more people become eligible for public assistance, could turn into block grants with capped funding levels; and

WHEREAS, some governors are willing to accept huge cuts in federal funds, up to 25 percent less than states are currently receiving, as a tradeoff for their freedom in deciding how to spend the money they receive from the federal government; and

WHEREAS, currently, federal funding for entitlement programs such as AFDC and Medicaid automatically increases as the need for these programs rises. Under a block grant, federal funds will no longer rise automatically as more people qualify for public assistance. As the economy worsens during a recession and more people have to apply for aid, states will either be forced to cut the level and quality of services or deny assistance to many of those who need temporary help from the government. In either case, families and their children will end up suffering and recessions will be deeper and last longer; and

WHEREAS, block grant proposals will spell fiscal disaster for states and localities, causing each state to lose millions, or even billions of federal dollars over the next seven years, which will compel states and localities to either cut services or raise taxes in order to make up the difference; and

WHEREAS, children will bear the brunt of these block grant budget cuts through proposed reductions in programs that target needy children, including the school lunch and breakfast programs, food stamps, the nutrition program for women, infants and children (WIC), Medicaid and AFDC; and

WHEREAS, there is no evidence that pooling money for various programs under a block grant will save money, as a study by the Urban Institute demonstrated that existing block grant programs only achieve 2 percent to 5 percent savings in administrative costs:

RESOLVED, that the FPE/AFT will engage in intensive lobbying efforts to stop the block grants bandwagon by exposing the harmful effects of these initiatives on public employees, families, children, communities, and state and local finances; and

RESOLVED, that the FPE/AFT will educate its members and the public as to the damaging effects block grants and resulting reductions in federal funds will have on programs and services at the state and local level, including the potential for mass layoffs of public employees through downsizing and privatization efforts; and

RESOLVED, that the FPE/AFT opposes any initiatives to reduce federal funding for programs benefiting needy children, particularly the school lunch programs; and

RESOLVED, that the FPE/AFT will counter any rhetoric advanced by federal and state lawmakers that block grants will enable states to do more with less by emphasizing the direct connection between the loss of federal funds from the conversion of programs into block grants and the loss of vital programs, services and public employee jobs.