Cities and counties searching for ways to fund ever-increasing demands for public services are looking beyond local revenue sources such as property tax, sales tax, and fees. More frequently, officials are turning to federal grants to supplement their budgets, a process that goes largely unnoticed by those outside the circle of politicians and bureaucrats involved in tapping the nation’s cookie jar.
“It’s hard now to find a purely local function,” said Carl Stenberg, professor of public administration and government at UNC-Chapel Hill. “Many have some state or federal mix.” Stenberg said the trend began in the 1970s with the federal revenue-sharing program. Early on, Stenberg said, larger governments hired grant coordinators, who visited Washington D.C. and made the rounds of congressional offices trying to match projects with available dollars. Some set up offices in Washington. But a more recent phenomenon is for localities to contract with lobbying firms, which do the relationship building that can lead to cash.
Durham County Interim Manager Wendell Davis said his county does what it can on its own, even though it doesn’t employ a grant writer to research opportunities. The office typically provides both senators and Rep. David Price, who represents Durham, with its funding priorities and then hopes one or more will work to have the project inserted in the federal budget.
To maximize what it receives, in 2002 Durham County hired Virginia-based Capitol Link, a lobbying firm, to help tap funding sources for a wish list of projects. “You can only raise the tax rate so high,” said Davis of the county’s ability to rely on local funding.
Local governments pursue two types of federal funds. Earmarkings, commonly known as pork funds or discretionary funds, hinge on a congressman or senator inserting the project into the budget as a line item. Which projects, and how many, make the final budget is open-ended. Competitive grants, however, require cities and counties to compete against their peers based on pre-determined criteria and a finite pot of money from federal agencies. More than 1,500 available competitive grants are detailed in The Catalog of Federal Domestic Assistance. The document describes the types of grants available, gives grant writing tips, and includes agency summaries.
Competitive grants are much more objective, according to City of Raleigh Assistant City Manager Daniel Howe. “It’s pretty rational and straightforward,” he said of the process that reaped $400,000 for Raleigh to clean up environmental problems at 10 to 12 former industrial sites known as brownfields. Site assessments will be made and once work is completed, the locations will be marketed for redevelopment. Raleigh began working with Capitol Link in 2003 and pays the firm $4,000 per month plus expenses.
Yadkin County is entering the second year of a three-year contract with Capitol Link. It pays the same fee Raleigh does. Earlier this year, the lobbyists helped county officials secure about $800,000 in competitive grant cash to make a water line available to a developing area along Highway 601 near Yadkinville. The county now has the team looking for money to fund equipment and capital needs for a local hospital and for new science equipment in its schools.
County Manager Cecil Wood said it makes financial sense to contract for the specialized services rather than hire a full-time county employee. “Most larger counties do this pretty consistently,” he said. “It may be a little less common for a county of our size.” Yadkin’s population is just 38,000, but Wood emphasized he’s constantly looking for any funding possibility to help the county, regardless of what other local governments do.
“Mainly, we’re cheaper” than hiring staff, said Capitol Link President Mick Staton of why the grant-seeking service provided by lobbying firms appeals to cities and counties. Experience is key as well. He noted the federal budget process can be complicated. There are myriad rules, timetables, and committees, and understanding how they work together is vital.
For example, he said, work on Raleigh’s brownfields grant involved shaping and editing the application for the city. Since a peer review group assesses the applications, Staton said past experience with the group’s priorities allowed the company to fine-tune Raleigh’s proposal. Then Capitol Link made the rounds of the North Carolina congressional delegation to explain the project and ask for support, even though legislators can’t influence a competitive grant. Regardless, getting a legislator on your project’s side is important, Staton said. “It’s good for the peer group to know a project has congressional support.”
Davis said Durham County’s reliance on outside efforts, coupled with help from Price’s office, yielded results in the 2003 federal budget. The county received $333,700 in earmarked grants to pay for two projects. The Urban Ministries Homeless Shelter is being renovated and the area’s senior center will be constructed using $135,000 of that money. The Juvenile Day Reporting Center, which serves suspended and truant middle and high school students, was allotted $198,700.
Raleigh received $825,000 in discretionary funds from the fiscal 2003-2004 budget. The Neuse River greenway project benefited by half a million dollars, while efforts to renovate and redesign Fayetteville Street Mall took in $175,000. A downtown transfer station to serve various forms of transit received $150,000.
Whether it’s appropriate for members of Congress to wield power and influence with the federal budget by earmarking projects for cities and counties back home has people squealing loudly as federal domestic spending grows. A November 2004 Heritage Foundation Web Memo reported that the number of pork projects is increasing. Six years ago there were less than 2,000. There are more than 10,000 in the 2004 budget, valued at more than $23 billion.
As pork grows, the money for competitive grants shrinks. In response, the Web Memo explained, Congress authorizes more competitive money but doesn’t cut back on earmarks to keep expenditures in line.
So what qualifies as pork? “That’s a really tough one,” said Stenberg, who teaches county commissioners and managers who attend UNC-CH’s Essentials of County Government course. “For every necessity you can find a pork project. The degree of worthiness varies in the eye of the beholder.”
Davis thinks one’s opinion of federal earmarking depends on what role you play in the process. If you’re an official who needs money, it isn’t a bad thing because citizen needs are increasing and managers have to find money somewhere. Capital improvements are especially difficult to fund, he said.
“While many of those things do get funded through bond referenda and what have you, there are just other things that kind of fall off the table. But the needs out there that didn’t get funded don’t go away,” he said.
Like Wood, Howe said it is his responsibility to look at every revenue opportunity for Raleigh, including federal earmarks. As long as the system is the way it is, he said, it’s difficult not to take part when taxpayers are demanding services but aren’t willing to support tax increases to pay for them. Still, relying on congressional muscle for dollars can be risky. “It’s a crapshoot. One year you’ll get something, another year you won’t,” Howe said.
Donna Martinez is associate editor of Carolina Journal.