Intergovernmental Politics in the Allocation of Block Grant Funds for Substance Abuse in Michigan

This article examines the intersection between federal programmaticgoals and state politics in the allocation of substance-abuseblock-grant money by the State of Michigan. The Alcohol andDrug Abuse and Mental Health Services (ADMS) block grant allowsstates more flexibility in allocating "Drug War" funds. TheADMS formula determines the amount of money going to Michiganbut does not determine the distribution of funds within thestate. An examination of the distribution of ADMS funding amongthe eighteen coordinating agencies in Michigan finds that neitherthe state nor the national formulas distribute funds in a mannerthat reflects substance-abuse deaths. Michigan's formula producesa result consistent with the federal formula, despite the separatestate and national formula negotiations. The process is notone of bargaining or even coercion; it may be described as mutuallyindependent decisionmaking—or parallel policies. Modelsof intergovernmental relations must be revised to include thepossibility of joint synergistic action without coordination.     

Accruing Retirement Costs for Federal Employees

The president's 2003 budget proposed that federal agencies pay the full cost of their employees' pension and retiree health benefits as such benefits are earned starting in 2003. The main reason for the proposed change is to provide policymakers and agency managers with a more complete measure of the cost of providing current services. The main disadvantage of the proposal is that estimates of the accrual costs of retiree health benefits are subject to large errors. The proposed change would not increase total outlays, nor would it affect the budget deficit or surplus.     

Can New York and Los Angeles learn from Kumasi and Bangalore? Costs and benefits of rent controls in developing countries

Abstract

This article presents comparative static estimates of the costs and benefits of rent controls for four developing‐country cities: Cairo, Egypt; Kumasi, Ghana; Bangalore, India; and Rio de Janeiro, Brazil. The results are compared with those from four U.S. cities: New York; Los Angeles; Santa Monica; and Washington, DC.

Rent control regimes and their effects vary widely across cities and countries. Whatever the “average” cost or benefit of controls, all markets have large variances about the average, and the variation is rarely strongly related to income or other household characteristics in a way most people would find desirable. In the countries for which there was direct evidence, landlords were richer than tenants on average, but not remarkably so, and there was considerable overlap in the two income distributions. In Cairo, where there was direct evidence, key money made up much of the difference between controlled rents and market rents. In very strict regimes, substantial reductions in rents were sometimes largely or completely offset by losses in consumer's surplus (Kumasi). Controls that give differential treatment to favored groups like civil servants were found to distribute substantial benefits to those groups without much benefit to others (Bangalore). In countries willing to incur substantial transactions costs of indexation and renegotiation of rents for leases beyond market periods, control may make little difference on average, although a wide variance of benefits remains (Rio).     

Variation of employee benefit costs by age

Health care, pension, and disability plans account for the bulk of employers' benefit costs, as defined in this article. Because those costs tend to rise as employees get older, the age structure of the workforce affects not only employers' costs but ultimately their competitiveness in global markets. How much costs vary depends in large part on the structure of the benefits package provided. The method a company chooses to finance benefits generally varies with its size. This article focuses primarily on the benefit practices of large, private employers. In the long run, such employers pay the costs associated with the demographics of their workers, whereas small employers can often pool costs with other companies in the community. In addition, small employers often offer fewer benefits, and the costs and financing of those benefits are subject to the insurance markets and state regulations. The discussion of benefit packages is illustrated by case studies based on benefits that are typical for three types of organizations--a large traditional company such as steel, automobile, and manufacturing; a large financial services company such as a bank or health care organization; and a medium-sized retail organization. The case studies demonstrate the extent to which the costs of typical packages vary and reveal that employers differ radically in the incentives they offer employees to retire at a specific time. An employer can shift the variation in cost by age by changing the structure of the benefit program. The major forces that drive age differences in benefit costs are the time value of money (the period of time available to earn investment income and the operation of compound interest) and rates of health care use, disability, and death. Those forces apply universally, in the United States and elsewhere, and they have not changed in recent years. However, the marketplace and the prevalence of various types of benefit programs have changed, and those changes have generally resulted in less cost variation by age and more frequent employer selection of benefit packages that exhibit less variation by age.     

Litigation Costs, Budget Impacts, and Cost Containment Strategies: Evidence from California Cities

Litigation costs are straining many municipalities' budgets and creating more uncertainty and flux in their annual budgetary processes. A 1996 mail survey of California cities conducted by the League of California Cities, to which 210 cities (45 percent) responded, shows that the level of litigation-driven budgetary strain is intensifying. The budgetary impacts of litigation have been quite substantial, no matter whether measured in terms of overall impact, percent increase, frequency and magnitude of budget amendments, actual dollar costs, or the tendency to settle cases just to save money. Population size makes a lot of difference in the level and type of impact as well as the cost containment strategies implemented by a city. Generally, the larger the city (and the more diverse), the greater the strain litigation costs have put on the budget. A higher percentage of big cities (over 100,000) than smaller ones blame rising costs on police liability, personal injury, civil rights, tort, Americans With Disabilities Act, Fourteenth Amendment and Fourth Amendment claims. Frivolous cases are a problem for cities of all sizes. So, too, are the rising incidences of rights-related cases being filed against cities by their own employees as well as private individuals. This trend will likely increase as the nation's population ages and diversifies ethnically and racially.     

Regional stabilization: a model for policy decision

A policy simulative model with the main purpose of simulating the effects of alternative policy moves and obtaining an accurate read-out of resulting urban-suburban conditions is the focus of this paper. The model deals with the movement of various population groups and the resulting effects on some very broad indicators of city-suburban life, rather than with particular topics like transportation, land use and the like. The level of abstraction is thus intermediate and is directed at providing practical policy suggestions for a particular city—Newark—for which the model is calibrated. The model, however, is general enough in nature so that it can be applied to other urban-suburban complexes and therefore the policy suggestions made on a fairly broad basis. The outputs of the model are graphically represented to show the results of alternative policies which then may be compared. As a side benefit the inputs to the model can also serve as a “social report” on the present status of an area. Policy questions to be answered by the model include: Should a city budget be directed somewhat differently? Should a city ask the state or federal government for funding and for how much? What may be expected from imposing a city sales tax, weighing the revenue benefit against costs of lost sales or citizens? And last, would the federal government not be better off by simply giving money to the poor directly instead of to cities?     

Costly,Regressive, and Ineffective: How Sensitive Is Public Support for the Mortgage Interest Deduction in the United States?

ABSTRACT

Although the mortgage interest deduction enjoys broad public support, critics argue that the policy disproportionately benefits wealthy households, fails to expand homeownership opportunities to households on the margins, and costs the federal government an extraordinary amount of money in foregone tax revenue. Drawing on data collected through an online experiment, this analysis tests the sensitivity of public support to these critiques. The findings reveal that support for the mortgage interest deduction declines when respondents are presented with information about the cost, effectiveness, or distribution of benefits associated with the deduction. Support among renters is more sensitive to framing effects than that among homeowners. Republicans are less sensitive to framing effects than Democrats when the deduction is framed as distributing benefits unequally, but more sensitive to these effects when the issue is framed as costly. However, all groups register their lowest level of support when told that the mortgage interest deduction is not an effective tool for expanding ownership opportunities.     

The Fiscal Consequences of Changing Federal and State Revenue Policies: The Case of Small Oregon Cities

This article examines the fiscal consequences for twelve, smallOregon cities of recent changes in federal and state intergovernmentalrevenue policies. Many small local governments have experienceddouble revenue reverses in recent years—reductions inown-source revenues because of economic decline as well as decreasesin intergovernmental revenues, especially federal aid. The twelvesmall cities are compared with all 241 cities in Oregon andthe 136 Oregon cities in the 1,000 to 49,999 population range.Using aggregate and interview data, a major finding is thatalthough stabilization and/or decline in federal-state revenuesharing and entitlement program funds have accentuated difficultlocal revenue situations, economic decline has been the moreimportant contributor to the fiscal stress of the twelve smallmunicipalities. Most of the twelve cities had limited fiscalcapacity—as indicated by low assessed property valuations—makingit difficult to produce sufficient revenue to meet basic publicservice needs. These cities were also unable to get citizenapproval of increases in property taxes.     

The TANF/SSI connection

Interactions and overlap of social assistance programs across clients interest policymakers because such interactions affect both the clients' well-being and the programs' efficiency. This article investigates the connections between Supplemental Security Income (SSI) and Temporary Assistance for Needy Families (TANF) and TANF's predecessor, the Aid to Families with Dependent Children (AFDC) program. Connections between receipt of TANF and SSI are widely discussed in both disability policy and poverty research literatures because many families receiving TANF report disabilities. For both states and the individuals involved, it is generally financially advantageous for adults and children with disabilities to transfer from TANF to SSI. States gain because the federal government pays for the SSI benefit, and states can then use the TANF savings for other purposes. The families gain because the SSI benefits they acquire are greater than the TANF benefits they lose. The payoff to states from transferring welfare recipients to SSI was substantially increased when Congress replaced AFDC with TANF in 1996. States retained less than half of any savings achieved through such transfers under AFDC, but they retain all of the savings under TANF. Also, the work participation requirements under TANF have obligated states to address the work support needs of adults with disabilities who remain in TANF, and states can avoid these costs if adults have disabilities that satisfy SSI eligibility requirements. The incentive for TANF recipients to apply for SSI has increased over time as inflation has caused real TANF benefits to fall relative to payments received by SSI recipients. Trends in the financial incentives for transfer to SSI have not been studied in detail, and reliable general data on the extent of the interaction between TANF and SSI are scarce. In addition, some estimates of the prevalence of TANF receipt among SSI awardees are flawed because they fail to include adults receiving benefits in TANF-related Separate State Programs (SSPs). SSPs are assistance programs that are administered by TANF agencies but are paid for wholly from state funds. When the programs are conducted in a manner consistent with federal regulations, the money states spend on SSPs counts toward federal maintenance-of-effort (MOE) requirements, under which states must sustain a certain level of contribution to the costs of TANF and approved related activities. SSPs are used for a variety of purposes, including support of families who are in the process of applying for SSI. Until very recently, families receiving cash benefits through SSPs were not subject to TANF's work participation requirements. This article contributes to analysis of the interaction between TANF and SSI by evaluating the financial consequences of TANF-to-SSI transfer and developing new estimates of both the prevalence of receipt of SSI benefits among families receiving cash assistance from TANF and the proportion of new SSI awards that go to adults and children residing in families receiving TANF or TANF-related benefits in SSPs. Using data from the Urban Institute's Welfare Rules Database, we find that by 2003 an SSI award for a child in a three-person family dependent on TANF increased family income by 103.5 percent on average across states; an award to the adult in such a family increased income by 115.4 percent. The gain from both child and adult transfers increased by about 6 percent between 1996 (the eve of the welfare reform that produced TANF) and 2003. Using data from the Department of Health and Human Services' TANF/SSP Recipient Family Characteristics Survey, we estimate that 16 percent of families receiving TANF/SSP support in federal fiscal year 2003 included an adult or child SSI recipient. This proportion has increased slightly since fiscal year 2000. The Social Security Administration's current procedures for tabulating characteristics of new SSI awardees do not recognize SSP receipt as TANF We use differences in reported TANF-to-SSI flows between states with and without Separate State Programs to estimate the understatement of the prevalence of TANF-related SSI awards in states with SSPs. The results indicate that the absolute number of awards to AFDC (and subsequently) TANF/SSP recipients has declined by 42 percent for children and 25 percent for adults since the early 1990s. This result is a product of the decline in welfare caseloads. However, the monthly incidence of such awards has gone up-from less than 1 per 1,000 child recipients in calendar years 1991-1993 to 1.3 per 1,000 in 2001-2003 and, for adult recipients, from 1.6 per 1,000 in 1991-1993 to 4 per 1,000 in 2001-2003. From these results we conclude that a significant proportion of each year's SSI awards to disabled nonelderly people go to TANF/SSP recipients, and many families that receive TANF/SSP support include adults, children, or both who receive SSI. Given the Social Security Administration's efforts to improve eligibility assessment for applicants, to ensure timely access to SSI benefits for those who qualify, and to improve prospects for eventual employment of the disabled, there is definitely a basis for working with TANF authorities both nationally and locally on service coordination and on smoothing the process of SSI eligibility assessment. The Deficit Reduction Act of 2005 reauthorized TANF through fiscal year 2010, but with some rules changes that are important in light of the analysis presented in this article. The new law substantially increases effective federal requirements for work participation by adult TANF recipients and mandates that adults in Separate State Programs be included in participation requirements beginning in fiscal year 2007. Thus SSPs will no longer provide a means for exempting from work requirements families that are in the process of applying for SSI, and the increased emphasis on work participation could result in more SSI applications from adult TANF recipients.     

Incentivizing self‐regulation: Federal vs. state‐level voluntary programs in US climate change policies

How does program sponsorship influence the design of voluntary programs? Why and how do voluntary programs on climate change sponsored by the state and federal governments in the United States vary in their institutional design? Scholars emphasize the signaling role of voluntary programs to outside stakeholders, and the excludable benefits that induce firms to take on non‐trivial costs of joining voluntary programs. Scholars have noted several types of benefits, particularly reputational benefits programs provide, but have not systematically studied why different programs emphasize different types of benefits. We suggest that excludable benefits are likely to take different forms depending on the institutional context in which program sponsors function. We hypothesize that federal programs are likely to emphasize less tangible reputational benefits while state programs are likely to emphasize more tangible benefits, such as access to technical knowledge and capital. Statistical analyses show the odds of a voluntary program emphasizing tangible benefits increases by several folds when the program is sponsored by the state as opposed to federal government.     

Recent trends in workers' compensation

Workers' compensation provides cash benefits and medical care to employees who are injured on the job and survivor benefits to the dependents of workers whose deaths result from work-related incidents. Workers' compensation programs in the 50 states and the District of Columbia and federal programs together paid $56.0 billion in medical and cash benefits in 2004, an increase of 2.3 percent over 2003 payments. Of the total, $26.1 billion was for medical care and $29.9 billion was for cash benefits. Employers' costs for workers' compensation in 2004 were $87.4 billion, an increase of 7.0 percent over 2003 spending. Workers' compensation programs and spending vary greatly from state to state. As a source of support for disabled workers, workers' compensation is currently surpassed in size only by Social Security Disability Insurance (DI), which covers impairments of any cause that are significant, long-term impediments to work. Although most recipients of workers' compensation recover and return to work, those with lasting impairments may become eligible for DI benefits, subject to an offset to avoid excessive wage replacement from both programs.     

The benefits and costs of the Section 8 housing subsidy program: A framework and estimates of first‐year effects

This paper provides estimates for a comprehensive set of social benefits and costs associated with the federal Housing Choice Voucher ( Section 8 ) program. The impact categories for which we provide empirical estimates include the value of the voucher to recipients; additional services and public benefits induced by voucher receipt; improvements in children's health, education, and criminal behaviors; the costs of voucher provision; the labor supply impacts on voucher recipients; and community effects. These estimates rest largely on empirical analyses of the effect of voucher receipt on several recipient and taxpayer behaviors and outcomes that occur in the first year of voucher receipt. The analysis distinguishes benefits and costs accruing to program participants, nonparticipants—including taxpayers and property owners—and society as a whole. Our analysis suggests that the program is likely to meet the efficiency standard of positive net social benefits. © 2011 by the Association for Public Policy Analysis and Management.     

How Weak Recognition and Measurement in the Federal Budget Encouraged Costly Policy: The Case of "Supervisory Goodwill"

The budget process is the primary means by which federal policymakers allocate resources. The failure of the budget to recognize and measure the full cost of federal programs encourages the Congress and president to skew resource allocation toward policies whose budgetary costs are underestimated. These "low-cost" policies often increase costs to taxpayers without providing taxpayers with benefits. Recent examples of this phenomenon are found in the "supervisory goodwill" cases. This article reviews these cases, the budgetary weaknesses they identify, the influence these weaknesses had on legislators, and the unnecessary costs for taxpayers that result from the supervisory goodwill policy. Specifically, the federal budget did not recognize the cost that would result from encouraging financial institutions to assume the assets and liabilities of insolvent savings and loans. The budget's recognition of costs failed a second time by not recording expenditures when the government abrogated its contracts with acquirers. Both actions raised costs to taxpayers unnecessarily. In addition to analyzing budgetary weaknesses and their potential costs, this article also reviews two proposed budgetary reforms that could address the budgetary failures highlighted by the supervisory goodwill cases.     

Toward a Regulatory Budget

A regulatory budget would require the federal government to treat compliance costs incurred by the private sector as if they were incurred by the government, without requiring the government to actually assume those costs. For example, EPA could be given a regulatory compliance budget of say $80 billion in FY98. A regulatory budget would provoke an annual debate in Congress on the size of EPA's or OSHA's budget. Such a debate would force the proponents to weigh the benefits and costs of various regulatory programs, something now lacking in the political process.
Interest in a regulatory budget reflects the slight gains in the quality of regulatory decision making resulting from mandatory regulatory review. It is now apparent that better information about the costs, benefits, and distributional consequences of regulation will not automatically improve regulatory decision making-although it would not hurt.     

Making Government Accountable: Lessons from a Federal Job Training Program

This article describes the evolution of a performance measurement system in a government job training program. In this program, a federal agency establishes performance measures and standards for substate agencies. The performance measurement system's evolution is at least partly explained as a process of trial and error characterized by a feedback loop: The federal agency establishes performance measures, the local managers learn how to game them, the federal agency learns about gaming and reformulates the performance measures, possibly leading to new gaming, and so on. The dynamics suggest that implementing a performance measurement system in government is not a one-time challenge but benefits from careful monitoring and perhaps frequent revision.     

FEDERAL EMPLOYMENT AND TRAINING POLICY: A VIEW FROM THE LOCAL LEVEL OF GOVERNMENT

To maximize the use of human capital, employment and training resources need to be redirected to meet four objectives: (1) reduce welfare dependency by helping people gain skills for self-sufficiency, (2) prepare a new workforce through better education of youth, (3) retrain dislocated workers, and (4) develop an employment system that links workers and jobs through the coordination of institutions. Suggestions for federal, state, and local initiatives to meet these objectives are spelled out. Particular emphasis is placed upon both a significant revitalization of the federal role in employment and training and a reassessment of traditional approaches.     

The concept of the level playing field: Assessing fairness in electoral competition

In 2019, the High Court of Australia used the term ‘level playing field’ no less than 18 times when considering limits on electoral campaign expenditure. This article examines the usefulness of this metaphor when assessing the opportunity to compete in elections on an equal basis. It shows that the metaphor is often used in electoral jurisprudence and by electoral monitoring bodies, but rarely subject to analysis. One place where it has been analysed is in the democratisation literature, where it is defined in terms of access to state resources, media, and the law. However, it needs further elaboration to make it useful in analysing the fairness of electoral competition in established democracies. The assumption of only two teams, incumbents and opposition, needs to be modified through considering the hierarchy of incumbency benefits. A case study of the 2019 Australian federal election illustrates the differential access to state resources of electoral contenders as well as the need to add the role of private money to the attributes of the playing field. It finds that although there has been some levelling of the playing field at the State and Territory level, at the federal level there has been further tilting.     

The economics of political campaign finance: FECA and the puzzle of the not very greedy grandfathers

This paper introduces a structural model of campaign finance which permits estimation of the marginal costs of raising money as well as the marginal benefits of spending and saving money. The model is estimated for the 1986 through 1990 election cycles; the results demonstrate that the probability of retirement hinders an incumbent's ability to raise money and that incumbents willingly trade off electoral security for financial gain.     

Modeling SSI financial eligibility and simulating the effect of policy options

This article simulates eligibility for Supplemental Security Income (SSI) among the elderly, analyzes factors affecting participation, and looks at the potential effects of various options to modify financial eligibility standards for the federal SSI program. We find that in the estimated noninstitutional elderly population of 30.2 million in the United States in 1991, approximately 2 million individuals aged 65 or older were eligible for SSI (a 6.6 percent rate of eligibility). Our overall estimate of the rate of participation among eligible elderly is approximately 63 percent, suggesting that more than a third of those who are eligible do not participate in the program. The results of our analysis of factors affecting participation among the eligible elderly show that expected SSI benefits and a number of demographic and socioeconomic variables are associated with the probability of participation. We also simulate the effects of various policy options on the poverty rate, poverty gap, annual program cost, the number of participants, and the average estimated benefits among participants. The simulations consider the potential effects of five policy alternatives: Increase the general income exclusion (GIE) from $20 to $80. Increase the earned income exclusion (EIE) from $65 to $260. Increase the federal benefit rate (FBR) by $50 for individuals and $75 for couples and eliminate the GIE. Increase the asset threshold to $3,000 for individuals and $4,500 for couples. Increase the asset threshold to $6,000 for individuals and $9,000 for couples. Using 1991 microdata from the Survey of Income and Program Participation (SIPP) matched to Social Security Administration administrative records and making adjustments reflecting aggregate program statistics, we present the results of our simulations for December 1999. The results show substantial variation in the simulated effects of the five policy alternatives along the various outcome dimensions considered. The simulated effects on the poverty gap of the elderly population range from a 7.9 percent reduction ("Increase the GIE from $20 to $80") to a 0.1 percent reduction ("Increase the EIE from $65 to $260"). All simulated interventions are expected to increase the rate of SSI participation among the elderly from a high of 20.3 percent ("Increase the GIE from $20 to $80") to a low of 0.5 percent ("Increase the EIE from $65 to $260"). We also find that the interventions that have greater estimated effects in terms of increased participation and reduced poverty tend to cost more. At the high end, we estimate that increasing the GIE from $20 to $80 could raise annual federal SSI cash benefit outlays by about 46 percent, compared with only 0.9 percent for increasing the EIE from $65 to $260. Similar to the EIE intervention, raising the resource thresholds by 50 percent would reduce the overall poverty gap of the elderly by only 0.2 percent, would increase SSI participation only modestly (by 1.3 percent), but would entail slightly higher program costs (by 1.4 percent). Increasing the asset threshold by 200 percent would have higher estimated effects on all three outcomes, but it would still be associated with relatively low increases in both costs and benefits. Finally, the simulated effects on the three key outcomes of increasing the FBR by $50 for individuals and $75 for couples, combined with eliminating the GIE, are relatively large but are clearly less substantial than increasing the GIE from $20 to $80. This work relies on data from the SIPP matched to administrative data on federal SSI benefits that provide a more accurate picture of SSI participation than has been feasible for previous studies. We simulate eligibility for federal SSI benefits by applying the program rules to detailed information on the characteristics of individuals and couples based on the rich array of demographic and socioeconomic data in the SIPP, particularly the comprehensive information SIPP provides on assets and monthly income. A probit model is estimated to analyze factors affecting participation among the eligible elderly. Finally, we conduct the policy simulations using altered program rules represented by the policy alternatives and predicted participation probabilities to estimate outcomes under simulated program rules. We compare those simulated outcomes to observed outcomes under current program rules. The results of our simulations are conditional on the characteristics of participants and eligibles in 1991, but they also reflect aggregate adjustments capturing substantial changes in overall participation and program benefit levels between 1991 and 1999.     

Exploring Aggregate vs. Relative Public Trust in Administrative Agencies that Manage Spent Nuclear Fuel in the United States

Trust is a key component of democratic decision‐making and becomes even more salient in highly technical policy areas, where the public relies heavily on experts for decision making and on the information provided by federal agencies. Research to date has not examined whether the members of the public place different levels of trust in the various agencies that operate within the same policy subsystem, especially in a highly technical subsystem such as that of nuclear energy and waste management. This paper explores public trust in multiple agencies operating within the same subsystem, trust in each agency relative to aggregate trust across agencies that operate within the nuclear waste subsystem, and trust in alternative agencies that have been suggested as possible players in the decision‐making process. We find that trust accorded to different federal agencies within the nuclear waste subsystem varies. The variation in trust is systematically associated with multiple factors, including basic trust in government, perceptions about the risks and benefits of nuclear energy/waste management, party identification, and education. These findings have significant implications for research on public trust in specific government agencies, alternative policy entities, and for policy makers who want to design robust and successful policies and programs in highly technical policy domains.