Improving Block Grant Allocation Formulas: More Refined Measures Would Shift Substance Abuse Funds to Smaller, More Rural States
Jan 1, 1998
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In 1992, Congress revised the formula that the federal government uses for distributing Block Grants to the states to provide substance abuse and mental health services. The formula calculates shares based on three formula components that are measured for each state: size of the population in need, cost of providing services, and each state's fiscal capacity. The purpose of this study was to inform Congress about the appropriateness of measures used in the current allocation formula and to identify factors that Congress might wish to take into account in the formula to attain greater equity in the distribution of funds. To this end, the study examines the concept of equity in the structure of the current formula to understand why Congress chose it, and reviews literature, methodologies, and data sources for measuring states' population need for services, cost of services, and fiscal capacity. Next, to evaluate the equity of the current formula, the study develops alternative measures of population need and cost of services based on recent national data, and compares formula allocations using these empirically based standards to the current formula's allocations.
Introduction: Background and Purposes of Study
Principles for Analysis of Allocation Formula
Population in Need of Treatment for Mental Illness
Population in Need of Substance Abuse Prevention and Treatment
Cost of Service Indicators
Measuring States' Financing Capacity
Evaluation of the Effects of Alternative Component Definitions in Allotment Formulas
Conceptual Analysis of the Block Grant Formula
Alternative Measures, Statistical Issues
Cost of Service Regression Analysis
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