Federal aid to state and local governments to provide public services has risen dramatically in recent years, but the localities are confused by directions from Washington on how to spend the money, the Advisory Commission on Intergovernmental Relations said yesterday.
In the summary report of a 14-volume study of federal grants to state and local governments, the ACIR, an appointed federal monitoring body, said the $80-billion-a-year system constitutes federal interference in local affairs and must be reformed.
Former New York Mayor Abraham Beame, the new ACIR chairman, said the aid helps feed inflation, because localities are often required to spend more money to match federal grants.
Among other recommendations in its five-part plan for improving the grant system, ACIR said the president and Congress should reevaluate the role played by each governmental level in the programs now funded by federal aid.
In addition to the excessive "red tape" involved in local administration of complex federal aid programs, Beame said, the states and localities are hindered by requirements that they conform to national policies on civil rights, environmental protection and citizen participation in their use of the grants.
Federal aid made up only eight percent of state and local revenues in 1954, but by 1976 had grown to 20 percent, the ACIR reported. It multiplied more than 10 times from 1960 to 1976. Today over 448 different programs channel more than $80 billion a year from federal coffers to state and local governments.
"The federal governments is in everything," commented ACIR assistant director David B. Walker.
Human resources programs covering education, employment, training and social services get the largest share of the federal aid - about 26 percent. Walker pointed out that these grants cover "everything from jelly fish control to rural fire protection." He said they form a "big fat wedge" of federal involvement that "gets bigger and bigger every year."
As a result, localities are losing control of programs, which creates the kind of voter "frustration" underlying tax movement such as Proposition 13 in California, Walker said.
Many smaller government units that once were linked to Washington only by post offices or agricultural extension service now are receive and manage grants, the report said. Federal involvement, once limited to states and some cities, now reaches thousand of countries, towns, school districts and non-profit organizations, the commission said.
During the Nixon presidency, attempts to give states more say in grants uses and to simplify the system through general revenue sharing and block grants appeared to reduce federal control in some areas, but other programs actually became more restrictive, according to the report.
Categorical grants, the oldest and most limited kind of federal aid, in terms of state discretion, still make up the bulk of support to state and local budgets - 76 percents, or $51 billion of the total $68 billion grants-in-aid expenditure for 1977.
A White House spokesman said President Carter used many earlier ACIR recommendations in his direceive last year for grant program improvements. He said the administration's reorganization task force is "quite attuned" to ACIR recommendations.