The Consequences of Shifting Control: Federal and State Distribution of Small Cities CDBG Funds in Four Southern States

Abstract

Following the shift of the Small Cities Community Development Block Grant program in 1982 from federal to state control, four southern states-Alabama, Georgia, Louisiana, and North Carolina-adopted policies intended to reduce, if not eliminate, the federal emphasis on housing rehabilitation and other activities that benefit lower income groups. These states now emphasize public works projects, which benefit a broader spectrum of the population, as well as policies designed to spread funds broadly across communities. As a result, the share of funds going to smaller communities has increased substantially. States also appear to be allocating fewer funds to poorer communities than did federal officials, although to date the difference is not substantial.