Structural Reform and Administrative Reform and Flexibility

Under the current system, states must deal with more than 300 separate programs related to welfare, food stamps, housing and job training. These programs are administered by different agencies at the federal level and are subject to extensive, complicated rules and regulations, which often conflict across program lines. Block grants offer states an opportunity to develop programs and policies based on local needs rather than a one-size-fits-all federal perspective.

Congress will likely approve legislation consolidating numerous federal programs into the following block grants:

• Temporary assistance for Need Families: This block grant consolidates Aid to Families with Dependent Children (AFDC), Emergency Assistance, and AFDC job training funds.
• Child Protection (Child Welfare)
• Child Care: This block grant consolidates AFDC child care and the Child Care and Development Block Grant
• Employment and Training/Workforce Development
• Medicaid

This document addresses Michigan's plans to implement the first three block grants mentioned above. Recommendations on the Medicaid block grant will follow.

Significant new flexibility for states will also likely be granted in Food Stamps.

Block Grant Characteristics/Features

States are given greater flexibility to use funds based on their own priorities and to design programs and allocate resources as they determine to be appropriate. Administrative, planning, fiscal and other types of reporting requirements are kept to the minimum amount necessary to ensure that national goals are being accomplished. The level of funding in each of the block grants is based on past individual state expenditures. In some cases the program growth rate may be reduced and in others the funding level may be capped. Some of the block grants have provisions for contingency or "rainy day" funds or loans.

The block grants will provide significant flexibility for the states including:

Consolidation of Programs which simplifies administration and procedures and results in improved efficiencies and effectiveness;

Transferability which permits transfer of resources to areas of greatest need or priority as determined by the state;

Carry-forward which permits transferring and saving money for future years in order to deal with emergencies or contingencies.

Current Status of Legislation in Congress

Congress is in the final stages of passing legislation creating the block grants previously described. It is expected that final Congressional action will occur by mid-November, 1995.

Implementation Dates