Federal grants to locals on rise

Grant Funding for State and Local IT Initiatives

State and local governments will receive $384 billion in federal grant outlays this calendar year, a figure that's expected to climb by nearly 15 percent by 2006, according to a market intelligence company.

Reston, Va.-based Input released a report that indicates federal grant outlays to state and local governments will steadily rise to $440 billion in three years.

The largest dollar-value increases will be in the health, income security and transportation program areas. Subsequently, grant allocations for the natural resources, commerce and housing, community and regional development, and energy and general government programs will decrease.

Input culled and examined the grant information from the Bush administration's fiscal 2004 proposed budget.

As many state and local governments grapple with balancing their budgets, they are looking to the federal government for more financial assistance, especially in homeland security matters as jurisdictions try to upgrade their communications systems.

"With deficits mounting and the cost of delivering services to citizens also rising, state and local governments are relying heavily on federal grant money to move programs and projects ahead," the report said, including technology projects.

The report said the Office of Management and Budget estimated that more than 600 active grant programs are available to state and local governments, and more than 150,000 awards will be made this year.

Last year, states and municipalities received about $352 billion in grant outlays.