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

Following the shift of the Small Cities Community DevelopmentBlock Grant program in 1982 from federal to state control, foursouthern states—Alabama, Georgia, Louisiana, and NorthCarolina—adopted policies intended to reduce, if not eliminate,the federal emphasis on housing rehabilitation and other activitiesthat benefit lower income groups. These states now emphasizepublic works projects, which benefit a broader spectrum of thepopulation, as well as policies designed to spread funds broadlyacross communities. As a result, the share of funds going tosmaller communities has increased substantially. States alsoappear to be allocating fewer funds to poorer communities thandid federal officials, although to date the difference is notsubstantial.