Federal Largesse: Not by Pork Barrel Politics Alone

9.24.2013 | It’s not always about pork. While pork-barrel politics is alive and well, it’s not the only force driving how (and where) federal dollars are doled out.  In an analysis of federal largess by major metropolitan area, BRR’s Sarah Rechkow finds that the density of the nonprofit sector, the state capital’s location, and percentage of people in poverty had a lot to do with how much federal grant money cities got.

In “The Delegated State and the Politics of Federal Grants,” (a BRR working paper available here), Reckhow analyzes federal grant distributions to metros from 1991 through 2010 and the “stimulus” of the American Recovery and Reinvestment Act.

She finds that in state and local governments’ race for federal grants, a better yardstick for measuring “winners” vs. “losers” is the capacity of a metro to contract out public services; that is, the more nonprofits on the ground and more active metro planning agencies, the more likely a metro area is to be awarded the big contracts for things like social service provisions, housing, and transportation grants.

Comparing four metro areas—Columbus, Ohio; Gulfport-Biloxi, Mississipi; Las Vegas; and New Haven-Milford, Connecticut—Reckhow finds they all had “relatively slow steady growth in grant dollars per capita from 1991 to 2005. Columbus, the state capital, had the highest grant dollars per capita, and Las Vegas had the lowest. The gap between the two was approximately $1500 in grants per capita in the 1990s, though it grew slightly by 2005.”

In 2006, Gulfport-Biloxi spiked to the top, in the wake of Hurricane Katrina, but was back to pre-Katrina levels by 2008. Then:

In 2009, there is evidence of stimulus grant bumps in three of the metropolitan areas—Columbus, New Haven, and Gulfport-Biloxi—but the bump is most dramatic for Columbus. Meanwhile, Las Vegas, arguably the metropolitan area that was most severely affected by the recession, experienced a slight decrease in per capita grant allocations for 2009 and 2010. The gap between Columbus and Las Vegas is particularly large by 2010—approximately $3500.

Across three administrations (Bill Clinton, George W. Bush, and Barack Obama), nonprofit density, the state capital’s location, and the percentage of people in poverty stand out as the three key variables that explain why some metros got more federal grants than others. Of two other statistically significant factors noted, African-American’s percentage of the population is positive while metropolitan diffusion—the centralization of local governments in a metro area—is negative, but “the substantive significance of this variable is relatively small.

Yet the importance of nongovernmental civic infrastructure is made clear by ARRA spending on Neighborhood Stabilization Program grants that began under Bush on a formula basis but were amended under Obama to be competitive (known as “NSP2”).

Although the Las Vegas metropolitan area ranked second nationally for foreclosures in 2008, Las Vegas was not awarded one of the 56 NSP 2 grants. The City of Columbus—in cooperation with Franklin County and several nonprofit organizations—was awarded over $23 million in NSP 2 funds. The NSP 2 program shows how competitive grant programs may further benefit communities with a strong institutional infrastructure for program implementation, particularly those with a dense nonprofit sector.

And while federal funds do get to areas of greater need, “the federal government’s reliance on states and nonprofits for program implementation means that high poverty areas will be better served if they also have the organizations and institutions that attract federal grants.”

The implications are clear:

Areas that lack a high density of nonprofit organizations are not as well equipped to attract federal grants and utilize funds to provide services to area residents. The reliance of the federal government on the delegated state for service delivery has enormous implications for access to services among needy populations and the equity of federal funding distribution on a national scale.

Reckhow’s findings point to another worrisome trend, the suburbanization of poverty, which she and BRR chair Margaret Weir, as well as others, have documented. Poverty has been increasingly rapidly in suburban areas. Take Houston. As Elizabeth Kneebone and Alan Berube point out, from 2000 to 2011, the number of poor residents in the city of Houston grew by more than one-third while the suburban poor population more than doubled. As a result, Houston’s suburbs have become home to the majority of the region’s poor for the first time.

The suburbs have been caught by surprise by this trend and are ill-equipped to address the needs of poor families. There are few social service agencies on the ground in the suburbs, and the network of nonprofits is slim, which does not bode well for poor families, especially if federal grants are drawn to those areas with the most robust networks.

Perhaps more suburbs should take a lesson from Houston. As Kneebone and Berube document:

Houston’s Neighborhood Centers has created a unique model that allows it to be both scaled and local, reaching region-wide in ways tailored to the distinctive needs and assets of each community The organization operates an annual budget of approximately $275 million that draws on dozens of federal, state, and private funding sources to deliver a range of services in urban and suburban communities  alike. To scale successfully, Neighborhood Centers has made significant investments in its administrative capacity, committing staff and resources to the active maintenance of contracts and grants and to the evaluation of program data and outcomes.

It’s a model more suburban communities, and metro areas more widely, should adopt.

Photo / Wilhelm Joys Andersen

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