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THE IMPACT OF

FEDERAL GRANTS IN ILLINOIS

by Phillip Monypenny

University of Illinois

INSTITUTE OF GOVERMVIENT AND PUBLIC AFFAIRS

Urbana, Illinois

January, 1958
Price $1.00

3 3 (i) . ' 8 llliriois H!STO":CAl SBRfll

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FOREWORD

With the recent national interest in federal-state re-
lations, the Institute of Government and Public Affairs is pleased
to publish this study. It is another contribution in the Insti-
tute's series on Illinois politics and government.

The author, Phillip Monypenny, is an Associate Professor
in the University of Illinois Department of Political Science.
He prepared a study on the Illincis situation for the Commission
on Intergovernmental Relations and this volume is an expansion
of that study. Professor Monypenny, whose main interest is
the field of public administration, has had wide experience with
agencies and programs of the Illinois State Government and is,
thus, vi(ell qualified to write ^n the subject cf federal grants-
in-aid.

As is the case in all studies published by the Institute,
maximum freedom has been accorded the authcr. The views expressed
and the conclusions reached are his.

ROYDEN DANGERFIELD, Director
"i Institute of Government and Public Affairs

PREFACE

This study grew out of an opportunity to prepare a report on
the impact of federal aid on state and local government in Illinois,
for the President's Commission on Intergovernmental Relations, in
the summer of 1953. Illinois ;vas one of a number of states in
which such studies were made by resident scholars. Since the
materials on federal grants are very widely scattered and not
readily available, and the 1953 study gave rise to a number of
reflections which went beyond the scope of the report to the Com-
mission, this more extensive study was prepared with the encourage-
ment of the staff of the Institute of Government and Public Affairs.

The study provides a brief introduction to the role which
federal grants-in-aid have played in Illinois finance since 1921;
a short description of the content, administrative organization,
and administrative procedures of nearly all of the grant programs
currently in effect in Illinois; and an evaluation of the impact
of grants-in-aid nn the policies and administrative operations of
state government. The principal omission is the grants for the
National Guard, a program quite unlike the other grant systems.

The conclusions of fact as to operating and political rela-
tionships under the grants received are based not only on the
materials descriptive of the programs, but also on the various
evidences of controversy such as proposals for state legislative and
Congressional action, and suggestions for modifying the grant sys-
tem made by various organizations in Illinois. The opinions expressed
as to these relationships are the author's own, and are not to be
attributed to any of the people whose help was invaluable in
assembling the materials for study.

The statistical data presented here are the latest available
as of the latter part of 1957. Where possible, the data cover the
fiscal year ended June 30, 1956. The data on revenues have been
computed by the author from state reports, and are as exact as they
could be made, considering the lack of uniformity in the reporting
system from the year 1921 to the present.

No attempt has been made to cite sources in the text, but the
bibliography indicates the principal sources used in its preparation.
In addition to documents and publications of all kinds, officials in
nearly all grant administering and grant receiving agencies were in-
terviewed. For certain topics considerable use was made of unpub-
lished doctoral theses in the University of Illinois Library written
by Professor David Kenny, now of the Department of Government,
Southern Illinois University, and Professor William Block, now of
the Department of History and Government, North Carolina" State College.

The materials prepared by the staff of the President's Com-
mission on Intergovernmental Relations were exceedingly helpful
in condensing a mass of statutory provisions and administrative
regulations. The published portions cf these are cited in the
bibliography.

A particular debt is owed to the many state and federal of-
ficials in Illinois who submitted to interviews and were generous
with their time and experience. These include not only administra-
tive officer*:; at various levels, but also members of the Illinois
General Assembly.

Professors Samuel K. Gove and Gilbert Y. Steiner of the
Institute «f Government and Public Affairs gave indispensible
encouragement and help in organizing and editing the manuscript.
The author's obligations to Mrs. Helen T. Cropp, secretary of the
Department of Political Science, and Mrs. Olive Sergeant, Mrs.
Donna Miskee, and Mrs. Anna Gissing, members of the secretarial
staff of the Institute, are very great.

FMllip Monypenny

111

TABLE OF CONTENTS

FOREWORD i

PREFACE ii

Chapter I - GRANTS AND THE FEDERAL SYSTEM 1
Federal-State Relations in the Grant-in-Aid

Program 3

Federal Grants and State Finance in Illinois 10

Chapter II - HIGHWAYS AND AIRPORTS 19

Airport Construction Programs 22

Chapter III - EDUCATION 33

Vocational Education 33

School Lunch Programs 35

Special Program for Federally Affected Areas 36

Land Grant Colleges 38

Chapter IV - HEALTH, HOSPITALS, A^D MENTAL HYGIENE 4A

Hospital Construction Programs 4-7

Mental Hygiene Programs A^

Program for Crippled Children A-9

Chapter V - PUBLIC WELFARE 53
Child, Welfare Services and Vocational

Rehabilitation 59

Surplus Agricultural Commodities 63

Chapter VI - EMPLOYMENT SECURITY 69

Chapter VII - AGRICULTURE AND RESOURCE CONSERVATION 7U

Resource Conservation Program 77

Agricultural Marketing Research Program 79

Chapter VIII- H3USING, SLUM CLEARANCE, URBAN REDEVELOPMENT

AND CIVIL DEFENSE 8^

Other Municipal Aid Programs 86

Civil Defense 89

Natural Disaster Relief 89

Chapter IX - THE IMPACT OF FEDERAL AID UPON ILLINOIS

GOVERMVIENT AND FINANCE 91

The Political Origin of the Grant Program 92
Federal Grants and Statt Expenditures and

Taxation 96

State-Fiscal Control and Federal-Aid Funds 97

Administrative Standards and Grants-in-Aid 102

BIBLIOGRAPHY 105

LIST OF TABLES X)9

CHAPTER I
GRANTS AND THE FEDERAL SYSTEM

For a long time it has been apparent that the original
picture of the government of the United States as a combination
of a national government and state government, each with separate
powers and functions, does not fairly describe our presen govern-
mental structure. Powers may be partly distinct in a constitu-
tional sense, but the activities of national and state govern-
ments which grow out of the powers constitutionally exercised are
extensively interwoven. This interweaving includes the activities
of local govexPiments as well.

There are probably no subjects of governmental concern, even
foreign affairs and national defense, in which persons affected by
an activity are not subject to the simultaneous control of national,
state and local goverrment. Motor truck owners and operators are
licensed by state and often by local governments. If they operate
in more than a single state, they may be subject to the regulatory
authority of the Interstate Commerce Commission as well. One
authority does not exclude the other; it complements it. A
slaughterhouse may be subject to local sanitary regulations, and
to federal inspection if the meat is consigned to interstate
commerce. County authorities constructing and maintaining a
secondary road under the federal aid system are under som.e super-
vision from the state highway department and, in addition, their
work must ultimately conform to the requirements imposed by the
Public Roads Administration which pays part of the construction
cost.

These are but a few scraps from the complex fabric of govern-
mental operations. It is necessary to recognize the existence of
such an interweaving of authority in order fairly to estirate the
significance and influence of federal grants-in-aid upon state and
local government. What follows is largely descriptive of existing
relationships, but in the concluding chapter there is srme com-
ment on current controversies.

The origin of the federal grant system lies far back in our
history. Its constitutional basis is the power of Congress to

1. Grants originated in treasury surpluses which could not be
avoided because the revenues which produced them, largely customs
duties, had other than fiscal purposes. Henry J. Bitterman. State
and Federal Grants in Aid, (Metzger Bush and Co., Chicago, 1938)
Ch. I., especially pp. 124-127.

spend for the general welfare, a power which Congress, almost
uniquely among federal powers, has the final authority of construing
since there is no obvious way to secure judicial review with
respect to it. In spending Congress is not limited to the
powers granted in Article I, Section 8, of the Constitution, or
even to those which can be implied therefrom. Grants are there-
fore a political rather than a legal matter. Their existence is
an indication that Congress and the President have taken an interest
in some subjects which previously have been left to state action
or inaction. Grants either assist the states to do something
better (or at least more extensively) than they already do it,
by providing additional resources, or they stimulate the states
to do something which otherwise they might not do. In either
case elected representatives of the people have chosen to dis-
regard the boundaries of the federal system and use federal finan-
cial resources to influence governmental policies in the states.
The result is that two systems of government act in respect to some
matter of governmental concern, each of them, through the pro-
cesses of election, qualified to speak as representatives of the
people who pay for government and receive its services.

Grants are a demonstration that some matters have ceased to
be matters only of state concern and have come to have national
significance in the minds of those who provide the grants. Among
the better known of these matters are highways, vocational edu-
cation, agricultural research and demonstration, certain aspects
of public health and welfare, civil defense, and unemployment
compensation and public employment exchanges. There are a.Tso
less well publicized activities as wildlife conservation. There
is no single reason why different activities come to be matters
of national concern. In the case of highways, the limited terri-
tory- of various states makes the development of an integrated
national system unlikely without some form of federal intervention.
Here the state is not a completely effective unit for providing
a service which obviously has national as well as local aspects.
In the case of some welfare programs, the states do not all have
resources which will provide a standard of care which is accept-
able as a national minimum, and the desire for such a minimum
leads to the supplementation of state resources. In other cases,
as probably in the case of wildlife conservation, there is an
effective demand in the national government for a kind of program
for which there is not an effective demand in all states. The
national participation in financing is a means of getting the
desired program in effect in some degree in all parts of the
United States. The difference in a very large number of respects
between the states, the differences in the size and layout of the
districts from which members of the state legislature and of Con-
gress are elected, are enough to insure that the political demands
which are heard in state capitals are not identical with those

heard in Washington. Both are the voices of the people, but the
people are organized in somewhat different ways.

To put this in ancther way, a part of the justification for
grants-in-aid is that the taxable wealth of the United States is
not distributed in the same way as the need for certain govern-
mental services, nor in the same way as population. There are
states with low populations and great areas in the west where
highway construction provides a very different burden on the
state's resources than it does in more populous states. There
are states in the south with relatively large populations and low
taxable resources where welfare programs take a higher proportion
of available wealth than they do in more prosperous states.
Grants have considerable fiscal importance in all states, oeing
one of the principal sources of income for all state governments,
but their justification does not rest on this basis alone. But
regardless of wealth there are activities, currently under state
control, which some people think ought to be handled either more
extensively, or in a more uniform way than they currently are,
and federal grants make this possible. In either case, the
difficulties •f providing service through the states cnuld be
met by the federal assumption of the function. In most grant-in-
aid fields, where the governmental power invoked is that of taxing
or spending, there would be no constitutional difficulty in this,
but both politically and administratively it is recognizee as
inexpedient.

Federal - State Relations in the Grant-in- Aid Programs

It is widely accepted that the system of federal grants to
state and local governments results in an extension of federal
influence over these governments. It is easier to come to this
conclusion since the existing federal grants are obviously not
designed primarily to provide financial assistance. State and
Itcal governments are not aided primarily because of their
fiscal inability to provide governmental services. If th: s were
the purpose, grants could be given with no requirements as to
the purposes for which they should be spent. Rather, grants are
available for specific purposes under specific standards. State
quotas for funds under the various programs are only part!!y based
on some measure of financial need. In order to receive the
allotted funds, states must comply with requirements both as to
the policy which is to be adopted and the administration of the
activity in question. The state must raise matching quotas for
most federal grants and only occasionally are these quotas rela-
tively less for the states with the lowest per capita incomes.
Having made provision for its quota the state must then submit
an approved plan for conducting the aided program, or notify

the proper federal agency that the stated conditions have been met.
Then it must submit budgets and reports and accept inspection as
the price of continued federal assistance. The allotment o: funds,
therefore, is conditional and none are received except as there is
compliance with federal requirements and as the state matches the
federal contribution.

The size of the federal contribution to a particular state
is determined in different ways in different programs. For example,
in the various public assistance programs which provide aid for
needy persons, the federal government contributes a certain amount
out of the total monthly allowance to each needy person, up to a
certain maximum, and a portion of administrative costs. There is
no fixed total which may be granted to each state in any year.
The amount actually given depends on the extent of need within the
state and the willingness of the state to meet it.

In assistance to the aged the federal government contributes
four-fifths of the first 30 dollars per month, and only one-half of
the remainder of any monthly payment up to 60 dollars. It carries a
higher proportion of the cost in those states which pay less than
the national average of about 50 dollars per person per month
than it does in those states which pay more. In Illinois the
federal contribution is about 52 per cent of all payments to
those receiving aid.

In most grant programs, other than public assistance, there
is some sort of fixed allotment which is based on the proportion
of population, by classes such as urban or rural, or on the land
area, or on population and per capita income, with a matching re-
quirement fixed either at a certain percentage, such as half, or
varied with per capita income. A few grants are put on a project
basis, the extent of the federal contribution being determined
entirely by the administrator who weighs the merits of the various
requests for funds. Among grants distributed under an allotment
formula are the long established aids to highways, vocational
education, agricultural research and extension, and most of the
money for public health. The discretionary grants are mostly
small ones, such as part of the child welfare money and the
federal grants to state marketing services.

2. This is not true for the grants under the Morrill Act and
its successors for resident instruction in agriculture, the
mechanic arts, agricultural extension and agricultural research.

Thus in order to take advantage of federal assistance there
must generally be a given level of state expenditure for a certain
purpose, and there is to this extent a sort of bonus for ui~der-
taking expenditure in the aided directions and not in others.

The result of the various apportionment formulas is a very
rough sort of equalization by which very poor states get somewhat
more assistance, both in terms of the proportion of the total state
and local expenditure supported from federal grants and in terms of
per capita grants, than most of the wealthier states. Illinois and
the whole East North Central group, Ohio, Indiana, Michigan and Wis-
consin, which are average or slightly higher in per capita income,
receive federal aid to the extent of just under ten per cent of the
total state and local tax revenue of each state, whereas t'r.e national
average of states is thirteen per cent. New York, New Jersey and
Pennsylvania, which are above the national average receive distinctly
less federal aid in proportion to total state and local tax revenue,
or about seven to nine per cent. On the other hand, the South
Atlantic states as a group and the Eastern and Western South Cen-
tral states, which are well below average per capita income, if
Maryland and Delaware are omitted, receive assistance from the
federal government \vhich gmounts to from thirteen per cent to 33
per cent of total state and local tax receipts depending on the
state. On a per caoita basis the results are similar. New York,
New Jersey and Penn'^ylvania receive a sum per capita which is from
50 to 75 per cent of the national average, whereas the Ohio, Indiana,
Illinois, Michigan and Wisconsin average is from 65 per cent to 80
per cent of the national average per capita grant. By comparison,
the per capita federal grant received in Arkansas is 150 P'^r cent
of the national average and that of Louisiana and Oklahon.a 200
per cent. South Carolina and Georgia receive 110 per cent and 130
per cert of the national average respectively. Thus states in
which state and local tax revenues are very large receive lower
federal grants bo"ch in proportion to such revenue and on an abso-
lute per capita basis. The southern and eastern states vJith
rather low per capita incomes receive larger federal aid both in
proportion to their lower tax revenues and absolutely on a per
Capita basis. There are peculiarities in this recoect. The lar-
gest per capita grants are not in the south but in the western
mountains where population is sparse and highway grants are large,
fcvada has both the highest per capita income and receives per
capita grants three times the national average. In the case of
the southern states receiving the largest grants, the high per-
centage figure rises for public assistance. The state level of
payments to recipients is low and the federal government there-
fore carries a higher proportionate share. The proportion of
recipients among the population is also higher than it is in more

industrial states. In the latter states it should be noted, Old
Age and Survivors Insurance is more extensive and the potential
public assistance load is therefore proportionately smaller than
it is in those states in which agriculture, only recently brought
under the OASI system, provides a larger proportion of employment.

The allotment, however determined, is only the first step
in determining the amount and the conditions of the aid which
the state shall receive. In a few cases it is practically with-
out any limiting conditions, as in the case of the aid to land
grant colleges. For these an allotment is provided based on
rural population, and the only recpjirements made are that in-
struction be offered in agricultural and mechanical arts and
that an annual report to the Office of Education be made. There
is no matching requirement. In agricultural extension, as the
sums advanced have increased, the matching requirement has been
kept for the older parts of the grant but removed for the increased
sums which have been made available since. There are a variety
of requirements among which perhaps the most important is that
the money may not be used for resident instruction. On the
other hand, the program within the general field of agricultural
extension is left to the states.

With the federal grants to highway construction, more ela-
borate requirements began to be made. States were required to
designate seven per cent of their existing roads as portions of
an interstate system and federal aid was to be limited to the
roads so designated. There must be a state agency to construct
and maintain the system. Construction standards must be devel-
oped for the general system and for each project. Tolls might
not be charged on aided roads. All of these elements from the
designation of interstate routes to the construction design for
particular construction projects were subject to approval by
the Bureau of Public Roads. During and after construction
aided mileages were subject to inspection and audit. The states
were required to advance the costs of construction and were
reimbursed as roads were completed.

Since federal aid covered only construction, state? were
largely free of requirements except those required by construction
itself — the designation of routes, the design of projects and
letting of contracts, the execution of the contracts. Mainten-
ance was required to be at^'a satisfactory standard, but this
did not result in a detailed regulatory system. It should be
noted, however, that construction is continuous: the roads are
never built, but always being built, and relationships based
on construction are therefore continuous.

With the Social Security /»ct a still more extensive set of
requirements came into being. In the social security program
money was spent continuously, being distributed to millions of
persons in rather small amounts. There was no series of grant
projects which could be separately approved and executed. Atten-
tion must therefore be given to the details of daily administra-
tion if effective control was to be maintained. Direct observa-
tion of more than a minute proportion of the payments made was
obviously impossible. The statutes setting up the Social Security
public assistance programs therefore require not only that aided
services be made available according to certain standards but
that the states set up adequate administrative organization and
adequate working procedures. The policy to be carried out is
specified in part by setting limits on the age of persons to
receive assistance, on residence requirements, and on the re-
sources of aided persons — only the needy were to be helped, to
the extent of providing necessities. In addition, there are
administrative requirements — there must be a single state agency
to administer the service, proper records must be kept, adminis-
trative procedures must be developed and approved, officers and
employees must be competent and hired on a merit basis. Once
the plan of administration is filed it must be kept up to date
and annual budgets must be negotiated and approved. As in high-
ways there must be inspections and audits.

Of all of. the federal programs, probably the tightest
controls are in employment security — that is the unemployment
compensation and public employment offices system. There are
requirements as to the state law setting up the system — the
conditions of eligibility for benefits, the extent of coverage,
the computation of contributions and benefits, the causes of
disqualification. In addition, the federal government pays
the whole administrative cost and requires a detailed budget
so that every item of expenditure must be accounted for in the
budget and possibly disapproved. Contributions received from
employers must be deposited in the federal treasury, except for
amounts currently required to pay benefits.

Thus, the whole federal grant-in-aid system operates by
the submission of proposals and their approval or disapproval.
Some of the conditions of approval or disapproval are set out
in the governing statutes which made the aid available and some
are left to administrative regulation. Obviously the system
requires a lot of negotiation between federal and state offi-
cials. There are many different federal agencies charged with
the administration of grants, though the bulk of grants are
extended through the subordinate units of the Department of
Health, Education and Welfare. Most federal agencies adminisr

tering grant programs maintain field offices in various cities,
and it is through these that negotiations are carried with state
and local officials. Inspections and audits are also carried
out through field offices. In a few cases there are no field
offices and all the work is concentrated in the Washington
office.

The significance of the whole paraphernalia of control rests
rather on its operation however, than on its mere existence. It
can obviously be used so as to limit and harass the operations
of state officials who are made partially dependent by the grants.
On the other hand, the whole set of procedures of plans and ap-
proval might be mere forms which do not seriously interfere with
anything that the state officials might wish to do. When the
Social Security Act was new and when the first legislative efforts
of states in new fields of welfare work took forms which seem
somewhat strange to us today, representatives of the Social
Security Board and the Children's Bureau were often required to
take a strong stand as to what was permissible and what was not
under federal law and regulations. In the absence of any group of
persons in the states with much knowledge or experience in the
new field of action, there was heavy reliance on the federal staff
as expert advisers in the drafting of legislation as well as in
setting up administrative organization and procedure. At this
time there might have been som.ething like federal dominance of
state legislative and administrative action. As the new agencies
got under way there were occasional attempts to use the positions
created in them and the payments they made as spoils in party
warfare. Such attempts were repulsed by the threat of withdrawing
grants or even the actual withdrawal of grants for brief periods.

At the present time, relations between the state government
and the federal overseers would seem to be on a very different
footing. The close correspondence between state policies and
federal requirements at least in Illinois seems to be as much
due to the acceptance by representatives of both governments of
a similar view as it is to coercion. The standards of federal
and state officials seem to be very similar whether it is an
engineering question as in highway construction or a matter of
public welfare policy. Consequently the annual negotiations
seem to be amiable. There is little complaint of federal
dictation. The work of inspection is viewed as a matter of
training and education and the exchange of experience. There
seems to be a reasonable allowance for the peculiarity of con-
ditions within the state.

The final result of the forms of federal initiative in
state affairs is to produce a kind of collaboration between
governmental officials of both state and federal governments.
Federal officials in granting agencies are a source of infor-
mation and advice, much of which is based on the experience of
other states. They provide a source of support against pressure
that would divert programs from purposes which were originally
sponsored by the federal government, but which now have strong
support within the state. Unlike higher level state officials,
federal officials in the field offices are relatively aloof from
the minor play of party politics, though not from the great
changes in emphasis that may accompany a change in the presi-
dency. Whether this results in a serious lessening of state
control over the aided functions, a diminution of the effective
responsibility of state political leaders, we shall examine in
a later section.

To complete our brief sketch of relationships under the
grant-in-aid system, it is necessary to say that relationships
are by no means limited to the direct negotiations between state
officials in aided programs and the representatives of federal
departments. In many cases, state and federal officials are
members of the same professional organizations and may be mem-
bers of committees charged with considering problems affecting
both state and federal policies. The associations of state
officials in various, fields help to prepare proposals for legis-
lation affecting aided activities vjhich are submitted to Con-
gress. Individuals and groups affected by the various federal
programs push their own measures before Congress and the state
legislatures.

Organizations such as the Council of State Governments, which
represent the elected officials rather than the appointed and
often semi-permanent administrative officers of the grant -re-
ceiving agencies, also develop legislative proposals. Represen-
tatives- and Senators in the Congress of the United States pursue
the claims of their constituents in the grant administering
agencies as they do in all other federal agencies. Governors
make direct requests of the heads of federal departments. In
these vjays the state goverrjnents directly and indirectly affect
the policies which federal agencies are pursuing. In turn, by
their influence on public opinion and on Congress as well as in
direct negotiation, the federal agencies no doubt influence the
policies which state agencies pursue. The grant-in-aid system
cannot be separated from the general context of politics in the
United States in which the work of policy making by local govern-
ments, state governments, and the federal government is inextri-
cably, if informally, interwoven.

Federal Grants and State Finance in Illinois

The origin of federal grants to support various state
activities in Illinois long precedes the current discussions
of the welfare state. The first continuous annual grants to the
states, as opposed to the grants of public lands and the pre-
Civil War distribution of treasury surpluses, were the grants
to the state University under the Morrill Act of 1890. We shall
begin this account of federal grants and the state fiscal system
with the year 1921. By that time Illinois was receiving federal
grants for highways, extension work, resident instruction and
research in agriculture, and vocational education. For a brief
period after 1918, there was a grant for venereal disease control,
an outcome of mobilization in the first world war. In 1921,
state income from all sources totalled approximately L3 millions
of dollars. Of this sum, five million, or approximately twelve
per cent, was from federal grants. The rest came from the general
property tax, or taxes in lieu of property taxes, such as the
gross revenue tax on the Illinois Central Railroad, and from
license fees and taxes, including motor vehicle licenses. The
largest federal grant was for highway construction; and other
grants received in that year were for vocational education, the
care of veterans in state hospitals and veterans homes, and for
venereal disease control. In 1922, grants for vocational rehabili-
tation were added. Not until 1934- were there any new grant pro-
grams or any new forms of assistance.

In the twelve years from 1922 to 1934 state revenues grew
enormously, as new taxes, such as the motor fuel tax, and later
the retailer's occupational excise tax,were added. By 193A,
state revenues totalled 200 million dollars. Federal aid increased
at a less rapid rate, fluctuating betv;een four and nine per cent
of total state income during the period, depending on the extent
of highway aid. The highest point reached by grants in that
period was eleven per cent of all state income, in 1924, when
highway grants were particularly large. Since federal aid was
available only for construction of highways but not for mainten-
ance, state expenditures on highways tended to increase faster
than the federal grants which covered approximately fifty per cent
of construction costs. The principal increases in state expenditure
were for highways, including payments to local units for highway
purposes, aid to the public schools and for state welfare institu-
tions, largely hospitals for mental illness and homes for the
m.entally deficient. There were several state bond issues in
this period, the receipts from which are not included in the table
of revenues, which largely financed highway construction and the
issuance of a gratuity to veterans of World Vv'ar I.

The rapid increase of state expenditure and of state revenues
which had occured in a prosperous decade only accelerated with
depression and war. The depression led to greatly increased
responsibility in public welfare. The state's share of highway
and school expenditure also continued to grow. A portion of
this increased expenditure was met by very great increases in
state tax collections, largely from new sources — the retailer's
occupational excise or sales tax, a tax on public utility
gross receipts, increases in the cigarette tax, and the tax on
alcoholic beverages. There was also an increase in federal aid,
at first on an emergency basis and then as part of a permanent
policy in the Social Security Act of 1935. It was only with the
coming into effect of the Social Security Act that the propor-
tion of federal grants to all state revenue changed markedly.
In the earlier depression period much of the federal expenditure
for relief was for work relief under local sponsors and much of
the federal expenditure for public works was similarly through
local units. The grants to the state for public works were much
smaller than the highway grants of the depression period, though
these considerably increased after the temporary reduction of
1931. By 1935, federal grants amounted to about ten per cent of
all state income and by 19-^2 had increased to about lU per cent
of all state tax revenue.

Once the Social Security Program was in operation, an
increasing proportion of state expenditures for public assistance
was met by federal grants. By far the largest expenditure was
for old age assistance. Illinois did not pass the necessary
legislation to participate in grants for aid to dependent children
until 194-1 J and grants for blind assistance began also in that
year. The state had earlier had its own programs in both fields,
but since these did not meet federal standards, no federal
assistance was available until new legislature came into force
in 1941. Although state expenditures fell somewhat in the war
years, federal grants continued at a steady rate and there was a
slight increase in the share which they constituted of all state
revenue. With the war over, however, there was a new expansion
of grant-in-aid programs. A new category was added to the
public assistance field — that of total disability. New grants
were made available for hospital construction and urban redevelop-
ment. Aid to schools in federally affected areas was put on a
more systematic basis. The grants for public health activities
were revised and seme new categorical programs added. Small sums
were made available for wildlife conservation and forest develop-
ment. There were also grants for public works planning which
began as part of an effort to create a backlog of projects which
could be available quickly in case of a major depression.

The effect of these new programs plus a larger federal partici-
pation in older ones, such as public assistance, was to continue
the increase in the proportion of state expenditure represented
by federal subsidies. From 1938, until the present, the propor-
tion has varied between 16 and 19 percent. This increase should
not obscure, however, the enormously rapid increase of state
revenue. In the current fiscal year they will approach a billion
dollars.^ Except for .the assumption by the State of responsibility for
public assistance, the character of state activity has not changed
substantially since 1921, but the scale has increased greatly
especially in highway expenditure and in aid to local school dis-
tricts for educational purposes. As in the expansion of state
expenditure at the time of the depression, the post war expansion
has been met largely through increased tax revenues. There have
been no new taxes, but old ones have substantially increased,
especially motor vehicle licenses and motor fuel taxes, and more
recently the sales tax. Apart from such increases in rates, the
steady expansion of the economy and the rise of prices have
greatly increased the yield. Over the whole period from 1921 to
the present, federal aid has increased about 20 times in amount,
state revenues about 16 times.

The great bulk of federal grants is accounted for by grants
for public assistance and public assistance administration, high-
way construction, vocational education and vocational rehabilita-
tion, and public health, in that order. In these fields federal
grants approximate about half of the total expenditure by the
State Government of Illinois. The largest state expenditures in
which there is little or negligible federal participation are the
general grants to local school districts and in the operation of
the mental hospitals and institutions for the mentally retarded.
Thus federal grants undervjrite some of the most expensive tasks
of state government, but leave others almost entirely to state
support.

3. Current fiscal year 1957-58.

13
Table 1 - I

jfij *_ij"-i;

Revenue All Funds State of Illinois Including Federal Grants

In Aid
[Dollar figure to nearest thousaid]

Percentage of

Total Revenue

All Funds

Federal Grants
% 5,013,000

from Federal Grants

1921

% 43,195,000

11.656

1922

43,935,000

445,000

1.0

1923

51,642,000

1,256,000

2.4

1924

50,872,000

5,541,000

10.9

1925

55,857,000

4,400,000

7.8

1926

72,298,000

2,858,000

4.0

1927

76,970,000

3,155,000

4.1

1928

78,013,000

3,752,000

4.8

1929

68,591,000

6,423,000

9.4

1930

88,433,000

2,650,000

3.0

1931

118,605,000

6,226,000

5.2

1932

104,760,000

9,701,000

9.2

1933

113,728,000

7,061,000

6.2

1934

125,681,000

8,126,000

6.5

1935

144,576,000*

14,497,000

10.0

1936

165,606,000

11,164,000

6.8

1937

213,050,000

30,045,000

14.1

1938

222,121,000

29,910,000

13.5

1939

221,599,000

28,891,000

13.0

1940

241,266,000

32,343,000

13.4

1941

253,851,000

36,748,000

14.5

1942

293,253,000

42,634,000

14.5

1943

274,179,000

47,207,000

17.2

1944

276,730,000

51,682,000

18.7

1945

269,574,000

37,122,000

13.8

1946

310,400,000

42,642,000

13.7

1947

395,224,000

52,866,000

13.4

1948

453,026,000

70,750,000

15.6

1949

490,513,000

84,933,000

17.2

1950

506,411,000=^*

96,830,000

19.1

1951

525, 801, 000 «*

92,000,000

17.5

1952

588,112,000**

98,922,000

16.8

1953

654,648,000**

107,710,000

16.4

1954

695,654,000**

110,435,000

15.9

1955

705,507,000**

113,454,000

15.8

1956

802,367,000**

122,520,000

15.3

Source: Annual and Biennial Reports of State Auditor of Public
Accounts, State Treasurer and State Department of Finance: years cited,
* Including Retailers Occupational Tax and Public Utilities Tax paid
under protest.

** From Department of Finance Reports not recsnciliable with totals
arrived at by addition of revenues of separate funds as reported by
Treasurer and Auditor, used in previous years. Income of revolving
funds and of funds for which State is a trustee (common school funds,
unemployment compensation, trust funds, employee retirement funds.

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Table 3-1

Federal Aid to Illinois and to the Ten Least and Ten Most Wealthy

States

Ten

Most We?

ilthy States

Per Capita Inc(

Dme

States ranked by

Per Capi

.ta

Per Capita

grants received

Rank

Income 1952
% 2260

ederal Grants

Per Capita

Delaware

15.74

Nev ad a

2250

52.99

D. C.

2129

1.11

Connecticut

2080

10.79

New York

2038

13.01

California

2032

21.47

Illinois

1983

13.62

New Jersey

1959

8.75

Ohio

1881

18.81

10.

Michigan

1815

U.67

Ten

Least Wealthy

State

iS Per Capita In

come

37. Oklahoma % 1285 34.99 3

38- South Dakota 1258 29.47 8

19.31 23

28.28 9

35.77 2

23.43 16

18.76 24

19.33 22

19.377 21

13.99 39

18.63 25

26.18 12

19.53 20

United States Average

1639 % 17.19

Source: United States Commission on Intergovernmental Relations, 1953.

39.

West Virginia

1232

40.

North Dakota

1223

41.

Louisiana

1206

42.

Georgia

1137

43.

Kentucky

1135

44.

Tennessee

1126

45.

South Carolina

1099

46.

North Carolina

1049

47.

Alabama

1012

48.

Arkansas

951

49.

Mississippi

818

Table U - I

Top States in Federal Per Capita Grants Received

States ranked by total
grants per capita

1 . Nev ad a

2. Louisiana

3. Oklahoma
U» Colorado

5 . Wyomi ng

6. New Mexico

7. Montana

8. South Dakota

9. North Dakota

10. Utah

11. Arizona

12. Arkansas

Per capita
grants

$ 52.99

35.77

3^.99

31.88

31.60

30.76

30.26

23. Ul

28.28

27.57

26.68

26.18

Ranked by Income

per capita

41
37
21
22
6
7
38
UO
30
27
48

United States Average

$ 17.19

Source: United States Commission on Intergovernmental Relations, 1953.

lable 5 - I

Top States

in federal Grants per c

apit;

3 by Grant

Program

Rank

Highways

Amount per capita

Nev ad a *

28.86

Wyoming

15.73

North Dakota**

U.24

South Dakota

13.95

Montana

12.37

New Mexico

11.32

Utah

9.9A

Idaho

9.25

Arizona

7*43

Delaware*

6.89

United States

Average

3.22

Illinois
Jld Aqe Assistance

3.09

Louisiana**

18.38

Oklahoma**

17.07

Colorado

U.56

Missouri

11.50

Washington*

9.15

California*

9.09

Arkansas**

8.A5

Texas

8.25

Georgia

8.12

Massachusetts

7.78

United States

Average

5.66

Illinois

i^.30

Aid to Dependent Children

West Virginia**

5.89

Oklahoma**

5.18

Louisiana**

-^.98

New Mexico

3.98

Kentucky**

3.50

Arkansas**

3.4A

Tennessee**

3.19

Arizona

2.95

California*

2.95

Maine

2.93

United States

Average

2.11

Illinois

1.88

Source: Report of the President's Commission on Intergovernmental _ Relations

* One of top twelve states in per capita income

** One of bottom twelve states in per capita income

CHAPTER II
HIGHWAYS AND AIRPORTS

Highweys became one' of the major objects of state expendi-
ture in Illinois as early as 191A when a state highway network
was being constructed under a system of state aid to county high-
way departments. In 1916 the first act providing federal aid for
highway improvement was passed and the Illinois program was then
adapted to federal aid. Highway construction became the respon-
sibility of a division which was the Department of Public Works and
Buildings created by the Civil Administrative Code in 1917. The
fundamental policies as to state-federal relationships in highways
were set out in the 1921 Federal-Aid Road Act. By this time the
state highway division was carrying out construction and mainten-
ance activities on the primary system directly rather than relying
on the counties under the state-aid state supervision arrangements
of the early period.

The general policy of federal aid for highways begun in 191A
coincided with the policy already in effect in Illinois, the pro-
motion of a statewide road network, a network which would serve
the needs of interstate as well as intrastate traffic. One of
the requirements for federal aid was that aided roads be built
and maintained bv a state highway department rather than by local
units. The states were further required to designate a primary
system, chosen from the most heavily travelled rural roads, up to
a total of seven per cent of the total state rural network.*

Once this initially designated federal-aid road system was
improved additions might be made to it. Since 1936 the states
have been authorized to designate secondary system.s, or farm-
to-market roads, which were also eligible to receive federal aid.
In 13UU the amount of federal money available for this purpose
was substantially increased. In that year also, aid was given
for the first time for urban extensions of aided roads. Finally,
a further classification has been added for those roads which
are to receive special attention. These are the roads in the
interstate system designated by the Bureau of Public Roads, under
the 19A4 act, because of their key place in the nation's transpor-
tation system in times of emergency. Nationally, about 38,0C0

1. Rural roads are those outside incorporated places. In recent
years federal grants have been available to meet the costs of so
called "urban extensions of the primary system", and the state high-
way department has the responsibility for maintaining such roads
even within city limits.

miles out of 64,2,000 miles of federally-aided highways are in
this classification.

The amount of federal aid available to a state for highway
construction and improvement is determined by various allotment
formulas. For the primary and secondary systems, each state's
share of the total annual grant for these purposes is determined
by an apportionment formula which distributes grants one third
on the basis of land area, one third on total population, and
one third on the mileage of rural delivery and star routes. A
separate appropriation is made for aid for urban portions of the
primary system, and the division of this sum among the states is
made on the basis of the relative share of the population in
urban places of 5,000 or more. The interstate system grants
are temporarily allocated among the states, one-half -on the basis
of population, one-half on the same basis as the grants for the
federal primary system. This gives somewhat more money to the
densely populated states than they would receive under the formula
for primary grants alone. After July 1, 1959, grants will be
based on the estimated cost of improvement of the portions of the
interstate system in each state, as proposed by the Secretary of
Commerce and approved by Congress by concurrent resolution.
States are also required to match the federal allotment as cal-
culated above, with an equal amount of state money, except on the
interstate system. (Matching requirements are cut proportionately
for states with over five per cent of their land area in unappro-
priated public lands).

In the federal Highway Act of 1956 the share of federal costs
of the interstate system was increased to 90 per cent. Very large
sums are appropriated for this purpose. In Illinois as table 6
shows, the total amounts for the interstate system will be over
twice as large as the amounts available for the rest of the pri-
mary system. In the biennium 1957-59, 229.7 millions in federal
aid is estimated as available for the 1800 miles of the interstate
system and 113.5 million for other federal-aid roads. For the
calendar year 1957, it is estimated that from federal and state
sources combined, 2hk,2 millions will be available for the inter-
state system in Illinois and 102.5 millions for the rest of the
federal- aid primary system.

In Illinois about 8000 of the 10,000 miles of the state pri-
m.ary system have been built or rebuilt with federal aid. Of the
secondary roads, which total 18,000 miles, most of which are
maintained by county authorities, about 6500 miles were
built with federal assistance. The roads designated as part of the
national interstate system in Illinois total about 1600 miles.

The provision for federal aid to urban portions of primary
routes, and for aid to farm-to-market roads, which are under the
jurisdiction of county authorities, makes for some complex and
interesting intergovernmental relations in the highway field.
This is especially true in o metropolitan area such as that of
Chicago and Cook County, since county and municipal officials
participate with federal and state officials in planning projects,
and may be in charge of the letting and execution of contracts
for the improvement. Thus, local, state and federal highway en-
gineers and officials participate in the planning and execution of
road improvements. The cost of these improvements in metropolitan
areas, such as the Calumet expressway in Chicago, are enormous,
and the complexity of their planning very great. So far, in this
very technical field of highway and traffic engineering, there has
been close cooperation among highway staffs of all of the govern-
ments involved, so that the resources of the three levels of
government have been effectively used.

In Illinois the relationships between the state highway de-
partment and all local highway administrative units are close be-
cause of the system of distributing a portion of motor fuel tax
proceeds to counties, municipalities and townships. This dis-
tribution is made under a formula fixed by the legislature which
returns to each of these units a stated share of the gas tax.

Cities and counties have received a share of motor fuel tax
receipts since the earliest provision of such a tax, but not un-
til the substantial increase in the motor fuel tax became effect-
ive in 1953 was a share given to townships. Such revenues are
not provided without some measure of state control however.
County plans and projects are approved in general by the state
highway department, as are proposals for municipal construction
using motor tax revenues. Furthermore the county highway super-
intendent, named by the county board of supervisors, must meet
the qualifications established by the Division of Highways for
holders of such positions. Township work which is carried out
with the use of state funds must be approved by the county high-
way superintendent. This state aid going to county and town-
ship units makes up a major portion of local road funds.

2. Thirty-five per cent of net motor fuel tax receipts are used
for state highway purposes, 11 per cent goes to Cook County, and
12 per cent is distributed among other counties. Incorporated
municipalities receive 32 per cent of the net receipts and town-
ships ten per cent. Distribution among dov;nstate counties is pro-
portioned to the share of vehicle registration fees collected on
vehicles registered in those counties, among cities, by population,
and among townships by township road mileage.

Yd Bc

The administrative procedures for highway construction grants
have been sketched briefly in an earlier section as an example of
common processes of grant administration. The Bureau of Public
Roads is in charge of the work in the federal government. It has
at various times had its home in the Department of Agriculture,
the Federal Works Agency, and is now in the Department of Com-
merce. The statute which controls its work requires the sub-
mission of plans for highway work, the approval of these plans,
the development of detailed specifications and their approval,
and the final reimbursement of the federal portion of construction
costs only after approval of the project. This means that every
phase of highway work from the selection of the route or the de-
cisions as to which part of the existing highway system is to be
improved or reconstructed, to engineering specifications and con-
tracting procedures must come under some type of federal influence.
The statute further requires that there must be a state highway
department which is to receive the grant and execute the aided
projects. In Illinois the highway construction and maintenance
agency is the state Division of Highways, the largest unit with-
in the state Department of Public Works and Buildings.

There is no requirement either in statute or regulation of '■ '
any particular standards of personnel administration or of per-
sonnel qualifications such as are to be found in the more recent
Social Security Act. This absence is partly accounted for by
the high degree of control which can be exercised over construction
projects by other means. However, state policies which may tend
to increase construction costs and limit competition among con-
tractors (such as a requirement as to the bonds to be posted or
insurance to be carried by outstate contractors who wish to com-
pete) will occasion criticism by the representatives of the Bureau
of Public Roads. Illinois has had a very stable professional
staff, unaffected by changes in administration, and this has
made unnecessary the occasional warnings that the lack of com-
petence of the professional staff might endanger the continuance
of federal aid which is said to have occurred in other states.

Airport Construction Programs

Federal aid for construction of airports, other than the in-
cidental assistance given by the emergency public works program
of the 1930* s, and the defense landing strip program of World
War II, is much more recent. The Federal Aid Airport Act was
adopted in 194-6. In general it follows the procedures already
pioneered in highway building, though the federal agency ad-
ministering the program is the Civil Aeronautics Administration
of the Department of Commerce.

One of the principal differences between the provisions for
highway construction and for airport improvement and construction
is that the approval of airport projects depends on their con-
formity to a previously established national airport program.
Such a plan is not made up from Washington however. State and
regional plans are first developed in the regional offices of
the Airports Construction Section of the Civil Aeronautics Ad-
ministration and then reworked into a coordinated national plan
in the central office.

A second difference is that in airport development, in
Illinois at least, the state itself is not the project sponsor.
Local units of government from park districts to special airport
authorities are in direct charge of the construction and operation
of landing fields and airports under a variety of statutory pro-
visions. The state department assists them in the development of
their proposals, considers them in relation to the development of
a statewide system of airports, approves them and transmits them
to the C. A. A. This function of pronoting the development of
a state wide system sometimes involves the Department of Aero-
nautics in informal stimulation of local requests, when local
sponsors are slow to see their opportunities. Thus the Department
is a kind of mediator between the C. A. A. and the multitude of
local units interested in airport development.

Until June 20, 1954-j existing public airports in Illinois
had received about 15 per cent of their development costs from
state funds, about 3A per cent from local, and the rest from
grants under various federal programs.

The amounts of federal aid available for projects in a
particular state, as in the case of highways, are determined by
applying an allotment formula to the amount of the appropriation
currently available. Allotments are based on area and population
and are available for a period of several years. If at the end
of a given year appropriated funds have not been committed for
available projects, the uncommitted balances in the various state
allotments are redistributed in accordance with the original
allotment formula. However, 25 per cent of any appropriation
may be distributed at the discretion of the administrator. This
offsets somewhat the mechanical basis of allotments which fails
to take account of the possibility that in some states airport
development may be a less lively subject of development than in
others. Quite consistently some states have failed to take full
advantage of the grants available to them and appropriations
have lapsed in consequence. In Illinois, however, airport de-
velopment has been fairly vigorous. The principal questions of
policy which have been presented have been the desirability of

supporting many small projects of interest to private flyers and
local traffic as against improvement at the terminals and inter-
mediate stops of the major airlines and the developing feeder
lines. National policy ano Illinois policy have coincided in
this respect. The first priority has been for improvement on
scheduled airline stops, and the number of places served by
airline traffic has increased as improved facilities have be-
come available. By far the largest single project has been the
improvements on O'Hare Field, in Chicago, now the International
Airport. Improvements have been carried out at twenty other
airports scattered over the state, from acquisitions of land
and the development of runways, to the provision Of improved
systems of boundary and runway lights. Table 11 a^ows the pro-
jects accepted and the amount of federal, state and local money
spent on each.

The Airports Act was one of the post war additions to the
federal subsidy system in which the question whethej to set up direct
grants to local governments or to route grants through state
agencies was fought out. The cities, in the person ol the Ameri-
can Municipal Association, and the U. S. Conference of Mayors,
put up a battle to permit localities to deal directly with the
C. A. A., the grant administering unit, as they do in the
housing and slum clearance programs. As a compromise the pro-
vision was made that the states might adopt legislation requiring
applications to be made through a state agency. In Illinois, as
in about half the other states, such a requirement is made. The
state Department of Aeronautics then approves all projects for
submission for federal grants. The city opposition to such a
position was partly based on the assumption that the state agencies
would be more responsive to applications from small cities and
rural areas and less to the rapidly multiplying needs of the
great metropolitan airports. Obviously this has not been the
case. State and federal agencies seem to have had equal inter-
est in a balanced program serving the needs of the centers of
heavy air traffic.

Once projects are approved, money is paid out as the projected
work is executed. Representatives of the state as well as the
federal government inspect work in progress and on completion.
Once completed, the airport is operated under the licensing
authority of both federal and state government.

In conclusion it should be noted that in the case of both
highway and airport aid, grants are made to cover capital ex-
penditures only, for original construction or improvement. The
state or the local unit, as the case may be, bears the cost of
maintenance. The maintenance budget rises as aided facilities
become more numerous or more extensive and as they age. However,
in the present period of highway reconstruction,maintenance ex-
penditures are dwarfed by the cost of new construction. On the
surface, the provision of aid for construction only would imply
a relationship which ceases with the completion of the aided
construction. Practically, it is continuous, since between ex-
pansion and replacement, the end of capital expenditure is never
reached. In terms of continuity and intimacy of contact there-
fore, these construction and improvement programs are not wholly
unlike the newer functions of grants for current expenditure,
such as are made in health and welfare.

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Table 7 - II

Federal Aid As Share of Current Illinois Highway Expenditure,
fiscal year ending June 30, 1956

[Dollar figure to nearest thousand]

Highways: Operation and Maintenance $ 35,269,000

Highway construction

Cash outlay on completed work 98,580,000

Obligations incurred on contracts 70,796,000

Total of cash outlay and obligations incurred 169,376,000

Total expenditure Highway construction and

operations 20^,6/^5,000

Federal reimbursement for construction expense 37,638,000

Federal aid as share of construction expense 22.22%

Federal aid as share of all operation and con-
struction expense 18.39%

Sources Department of Finance, Annual Report, 1956

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Table 10 - II

Federal Aid for Airport Construction
Fiscal year ending June 30, 195''', and estimates for 1957-1959 Biennium

Appropriation Estimate
Actual Expendi- 69th biennium 70th biennium
ture 1956 1955 - 1957 1957 - 1959

Aids and Grants to « «

Local Government
(State funds) /h04,832 3,107,500 3,962,000

Aids and Grants for
airport development
(Federal funds) 28,901 315,000 5,563,665

Operations 258,122 536,74/- 623,850

Total Grants for

Airport Development (^33,732) 13,4-22,500) (9,525,665).

Total Expenditure:

Department of Aero-

nautics

691,854 3,959, 2AA 10,309,515

Percent of airport aid

from federal funds

7% 9% 58.456

Source; Department of

Finance, Annual Report, 1956 and Illinois

State Budaet, 70th Biennium

Table 11 - II

Airport Construction Program
July 1, 1953 - June 30, 195-^., State and Federal Participation

Appropriation Actual Paid or available

Allotment Expenditure State Funds from federal funds

Alton Memorial *

91,000

1 -

1 _

^ 402

Benton Municipal

18,000

Bloomington

4,523

Cairo

23,000

6,000

Central! a Muni-

cipal

40,000

28,880

Coles County-

2,202

Danville, Ver-

million County

25,000

30,146

8,000

30,146

Decatur Municipal

■f . \-^

. 8,619

8,619

Dixon Municipal

50,000

30,908

30,^08

DuPage County

13,759

Harrisburg Ralpi'gh

13,000

9,308

Jacksonville

Municipal

60,000

Macon-'.lar shall

County

20,000

16,933

Litch^^ield

Municipal

5,000

—

Murphy ?boro-Carbon-

dale I.'.unicipal

40,000

Greater Peoria

95,299

106,718

Greater Rockford

30,000

60,548

Rock Island-^i/oiine

(Quad City)

22,000

212,643

Salem ^-'unicipal

8,000

—

Springf^'eld

(Capitol)

20,000

—

Sullivan-Moultrie

12,000

—

Taylorville Muni-

cipal

50,000

. 13,275

13,275

O'Hare Internation-

al, Chicago

410,000

TOTAL

958,400*

943,044

517,304

445,561**

PERCENTAGE

1005S

54.9%

45.1%

Source: Department

: of Aeronautics, Annual

Report. 1953,

1954.

* including §21,400 contingency-.
** $426,143 actual expenditure-

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(- l-

CHAPTER III
EDUCATION

It is a common misconception that the federal government
foots a fairly large part of the national bill for primary and
secondary education. This is not so, aid being limited to a few
aspects of education. The principal federal expenditures are
for vocational education, which is almost entirely a secondary
or continuation school activity, aid for school construction and
operation in federally affected areas, and commodities and cash
grants for school lunches. The total in Illinois for these pur-
poses is currently less than 8 million out of a total state and
local expenditure on public primary and secondary education of
over 4-00 millions. There is in addition a relatively small sum
which is received by the University of Illinois as a land grant
college and additional sums for agricultural research and ex-
tension work through the University of Illinois, which are dis-
cussed in another section.

Vocational Education

Federal assistance for vocational education began in the
year after the federal highway program, 1917. Allotments are
available for four primary types of training — agriculture, trades
and industry, home economics, business and distributive education,
and teacher training in these specialties. State allotments de-
pend variously on the state's share of all rural population, all
urban population, and total population. Classes held under the
program may be part of regular day school programs, they may be
part time classes, or evening classes, for employed persons, or
for youngsters still in the compulsory school attendance years.

To receive federal funds for these purposes, states must
meet certain standards. They must submit a plan for the use of
funds and an annual budget. The plan must show the need for vo-
cational education in the particular communities in which the
training is to be given. The teachers to be employed must show**^
"vocational competence" in terms of technical skill and teaching
ability. There are audits and inspections to insure compliance.
The U. S. Office of Education, now a unit within the Department
of Health Education and Welfare, administers these requirements.
There must be a Board of Vocational Education to administer the
program in each state and in Illinois this is an ex-of ficio
board. The Superintendent of- Public Instruction enters into agree-
ments with the Office of iijucation and takes responsibility for se-
curing the compliance of the local education authorities through whom
the money is actually spent. This is one of the several federal programs

which require a certain type of state administrative agency as a
receiving unit. The funds provided are available for salaries
and travel expenses of teachers and administrators in the program,
for instructional supplies and equipment, and for vocational
guidance and vocational research.

The actual proposals for classes and other training projects
are developed in the various local school districts with the
assistance of the state staff and are included in the state's
plan and annual budget. There is a considerable amount of state
as well as federal money in this program, and the state grants
both federal and state funds to the local schools on a monthly
basis. Local school districts, of course, hire all teaching per-
sonnel and such supervisory personnel as is required by the local
district and purchase equipments and supplies as their project
authorizes. Such purchases must be approved by the state and
ultimately the federal agency. The primary responsibility for
the development of the program in the state lies with the state
department in cooperation with local school districts.

The program of vocational instruction which is supported
in part by federal grants reaches over 100,000 students in
Illinois in five out of seven of the high schools in the state.
More than 2300 teachers are employed in the program-; part of their
salaries are supplied from federal and state funds. Classes are
given not only as regular day school activities for pupils of school-
age, but aLtiO for part time students and in the evenings for employed
persons. By far the most popular courses are those in agricul-
ture and homemaking with 29,000 students and 32,000 students res-
pectively. Training in agriculture is offered not only to day
students but to young men helping to operate farms and to older
farmers through part time and evening classes. Instruction is
not only an affair of classroom and shop. Students develop pro-
jects which are supervised on the farm by vocational agriculture
instructors.

Close behind these classes in number are the courses in trade
and industrial education which have a total enrollment of 26,000.
Many of these students are in cooperative part time and evening
courses. In the cooperative courses students combine study and
supervi«;ed work on a job. Part time and evening courses are for those
already employed. Proportionately these are of more importance in
trade and industry courses, which run the gamut of the skilled trades,
than in agriculture. Business education which includes office
work and preparation for the distributive trades such as jobs in
retailing and wholesaling, is much smaller with an enrollment all
over ths state of A, 000 persons. As in other vocational courses,
this also includes part time and evening students.

All of these classes in the local school systems are carried
on with the advice and supervision of area supervisors who are on
the staff of the vocational educational division of the Office ''f
the Superintendent of Public Instruction. These persons help lo-
cal school administrators and teachers plan programs, they meet
with teachers and sponsor conferences for vocational teachers
and for members of farm organizations, civic groups, labor organ-
izations and trade associations interested in their work. Teacher
training programs at the several public teacher training institu-
tions which train teachers of vocational subjects are also sup-
ported in part from federal funds, and there is close cooperation
between the staffs of these programs and the staff of the Division
of Vocational Education,

School Lunch Program

The school lunch program is a depression experiment in the
use of surplus foods that has become part of our current school
program as a demonstration in nutrition and as a means of in-
suring adequate nutrition to less privileged children. The gifts
of commodities which started with the depression have long since
been supplemented with money grants which go br^th to the purchase
of commodities and the payment of the salaries of the people em-
ployed to prepare and serve lunches. Payments are made to pri-
vate schools as well as to public schools, being made directly
by federal authorities to such schools in states like Illinois
which do not permit direct payments by a state authority. Chil-
dren who can do so buy their lunches, paying a price roughly set
to cover a major portion of costs. Children unable to pay for
their lunches receive them free, or at reduced cost.

Since this program is so closely linked to the utilization of
foodstuffs, it is administered by the U. S. Department of Agri-
culture which makes the grants of both food and money. Allotment
of the available federal appropriations is made by a formula in which
the share of a state varies directly with the number of children of
school age and inversely with its per capita income. Commodities
are distributed in proportion to the number of meals served. Match-
ing funds are required to be in the ratio of three state dollars to
rtne federal with a decreasing ratio for states with low per capita
income, but actual state and local expenditures are far in excess
of the minimum which would be required to receive federal assistance.

Special Program for Federally Affected Areas

Grants to schools in federally affected areas, the remaining
field of federal assistance to primary and secondary schools, be-
gan in the defense emergency which preceded World War II. With the
rapid building of industrial plants and military facilities in
previously unpopulated or sparsely populated areas, great demands
Were placed on all types of facilities and services ordinarily pro-
vided by local governments. Government assistance was provided
to local governments affected by such developments so that streets,
sewers, fire protection, schools, and other essential services
could be provided to the new population coming in. Since the end
of the war, such as-^istance to school districts has been continued
under the rubric of "federally affected areas". Such areas are
those in which there is a high proportion of federal property which
is exempt from local taxes, of federal employees working on fed-
eral property in the total working population, or in which in-
creased federal activity has caused a sharp population rise, re-
quiring a rate of expenditure on school facilities which could not
be maintained on the basis of ordinary local tax revenue.

Assistance may be given both for school construction and
for school operation and maintenance. The proportion of the cost
of new facilities which will be met by federal grants varies with
the proportion of children whose parents reside or work on federal
property and with the impact of the required facilities upon the
finances of the affected district. Actual expenditure is on a
project basis and each project must be justified under the con-
ditions as set forth in the authorizing statutes. The adminis-
tering agency is the Office of Education with the technical assis-
tance of the Housing and Home Finance Agency in approving con-
struction standards. Local districts submit their projects through
the Department of Public Instruction, who sets the standards of
cost per pupil which are used by the federal agency in fixing its
share of the cost of needed construction.

The assistance given for school operation and maintenance
arises from the same considerations as those that govern aid for
the construction of increased facilities. It is given where there
is extensive federal ownership of property or a large proportion
of parents of children attending school in the district who work
on federal property. Aid is based on the extent to which enroll-
ment is unduly swollen by federal activity in the district. Pay-
ments per child are based on local costs. As in the case of school
construction, the State Department of Education assists local
districts in the presentation of their requests and certi-
fies the cost standards upon which federal payments are based.

The closing date for new applications for aid to construction
of school facilities was June 30, 195A, although moneys will still
be spent for work completed under applications submitted up until
that date. To be eligible for construction aid, school districts
must show that there has been a total increase in attendance of at
least 20 due to federal activity, and that the percentage of pu-
pils occasioned by such activity is at least five per cent of
average daily attendance. This absolute number in turn must rep-
resent an increase of more than ten per cent in average daily
attendance since 1950-1952. Furthermore aid will be given only
where additional construction is shown to be necessary to handle
the increased load, whatever the size of the increase has been.
Thus small increases in attendance due to federal activity will
not be a sufficient justification for federal assistance for
new construction. Even when granted, federal aid does not cover
the whole cost of construction. It may reach a maximum of 95
per cent, where the parents of children who occasion the increased
load both live and work on federal property. It will be only ^5
per cent if parents work on federal property, but live outside it.

Aids to school operation which are continuing, though on a
decreased basis, similarly require either that at least ten per-
cent of the taxable property of the area be in federal hands,
or that there have been an increase of at least ten per cent in
attendance since 1950 occasioned by some federal activity. Pay-
ments are on a downward sliding scale of the average cost per
pupil, and only 25 per cent of such costs have been payable since
June 30, 1954.

Eighty-two districts in Illinois received a total of 1,650,000
dollars for operating costs in fiscal 195/|. under this program.
Such assistance represented less than one per cent of operating
costs for som.e districts and as much as 5U per cent for at least
one. Forty-eight districts in that year received or had pledged
to them funds for construction costs to a total amount of
8,886,000 dollars. Thus the amount of assistance was small on
a statewide basis but undoubtedly of the greatest assistance to
districts which had a disproportionate burden thrown on them by
increases in school population associated with federal airfields,
ordinance plants, et cetera.

In a program of this type local resources are supplemented
to help the affected school districts to carry a load which is
caused by federal activity in their area and which would other-
wise be beyond their capacity to carry. There is no influence
on the kind of school program being carried on, nor on the stan-
dards or equipment of school buildings. The federal assistance
given is paid directly to the local school districts and the
Superintendent of Public Instruction is limited to the facili-
tating of the program.

Land Grant Colleges

Compared to the programs already discussed, the extent of
federal aid to land grant collfeges is on a very small scale indeed.
The land grants are now a matter of history; they did not set up
a continuous payment, but rather were in the nature of an endow-
ment. Present grants are on a lump sum basis of approximately
70,000 dollars per year per state with another sum being dis-
tributed among the states on the basis of population. This grant
makes no requirements other than that the money be used to support
the land grant college and that an annual report be filed. There
is no requirement of matching funds. The agency which distributes
the money and receives the reports is the U. S. Office of Education.

Rather more money is distributed among the states for agri-
cultural research which supports those activities of the land grant
colleges which are carried on through state agricultural experiment
stations. In Illinois the experiment station is an administrative
entity indissoluble from the University of Illinois College of Agri-
culture. A considerably larger sum is available for cooperative
agricultural extension work, in Illinois an activity also adminis-
tratively centered in the College of Agriculture. However, these
aids to agricultural research and extension are considered in
connection with other types of federal assistance to the agricultural
activities of the states in Chapter VII.

Table 13 - III

State and Federal Expenditure for Public Elementary and Secondary Educa-
tion in Illinois for the Fiscal year
ending June 30, 1956

Percentage repre-
Federal sented by Federal
Total Share share

Operations of Office of
Superintendent of P.iblic
Instruction 998,500

Aid to local school districts:

Education exceptional

children

5,475,000

Normal schools

1,4.24,000

Junior colleges

896,000

Pupil transportation

5,100,000

Apportionment from common

school fund

90,112,400

Federal aid for school

milk

3,423,600

100%

Federal aid for school

lunch

2,516,000

100

Vocational education:

Administration of progran

1 429,700

233,000

Aid to local school

districts

3,950,000

1,237,800

Total state expenditure

vocational education

(4,379,800)

(1,470,800)

33.6

TOTAL 1

114,3^,800

$ 7,421,000

6.49%

Percentage

100%

Source: Illinois Department of Finance, Annual Rp'oort. Fiscal year
ending June 30, 1956

K0'"j: Do'.lar figures rounded to nearest hundred. Includes funds dis-
bursed through state treasury. Does not include receipts from local
revenues.

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Table 15 - III

Federal Aid for Current Operating Cost to Schools in Federally Affected
Areas in Illinois, Fiscal Ye=)r Ehding June 30, 1956 — Public Law

87A.

Federal Con- Total
Number of Units tribution Expenses

School districts receiving
over $100,000 per year*

School Districts receiving
$50,000 to 99,999

School Districts receiving
$20,000 to A9,999

School Districts Receiving
$1,000 to 19,999

TOTAL

4
7
9

62
82

931,795

397,308

207,907

413,385

3,294,047

6,526,687

7,0/^6,749

15,525,349

$ 1,950,395 $ 32,392,852

Source: Commissioner of Education (U. S. Department of Health, Educa-
tion and IVelf are) : 6th Annual Report on the Adni ni strati on of Public
Law 87A .and 815. Year ended, June 30, 1956. Tables 1, 12, and 15.
* Districts are North Chicago School District Ko. 26A

Rantoul School District No. 137

Mascoutah Corrmunity Consolidated School District No. 10

Waukegan School District No, l6l

Table 16 - III

Federal Aid for School Construction, by Counties, Fiscal Year
Ending June 30, 1956: (Public Law 815)

stricts

Amount Allocated

County

Receiving Aid

Fiscal Year 1956

St. Clair

1,612,291

Champaign

2,579,417

Carroll

211,298

Cook

511,U6

JoDaviess

160,770

Lake

2,254.112

Madison

1,097,512

Will

334,630

Henry

130,055

Winnebago

1,394,840

Ford

86,043

TOTAL

10,316,467

•

Illinois

Including U. S.

Aid for School

Construction

1951-1956

and Illinois

total approved

projec

;ts

2,550

number classrooms prcv

•ided

49A

26,067

pupils provided

fcr

U,370

761,541

Source: Commissioner

of Edi

icat

ion (U. S. Depar

traent of Health, Educa-

tion and Welfare): 6th Annual

Report on the

AdiT

linistration of Rjblic

Law 87A and 815. Year ended, June 30, 1956. Tables 1, 12, and 15.

Table 17 - III

Grants for Organized Research: University of Illinois, Fiscal

Year Ending June 30, 1956

U. S, Government Contracts $ 5,281,204

Grants for Agricultural Experiment 652,059

Private Research Contracts 1,513,H8
TOTAL Expenditure $ ll,l6ii,520

Per Cent of Expenditure for all

Organized Research Represented 53»IA%
by Government Contracts

Land Grant Qndowment Income $ 32,5^1

Morrill Act as Amended 156,906

Agricultural Experiment Station 625,059

Agricultural Extension 1,351,597

TOTAL 2,187,913

U. S. Government Research Contracts 5,281,20A

TOTAL All U. S. Grants $ 7,^69,117

TOTAL University Expenditure All
Purposes and Funds including
Federal Grants $ 60,80^,621

Source: University of Illinois, Report of the Comptroller, Fiscal
year ending June 30, 1956.

CHAPTER IV
HEALTH, HOSPHALS, A^D MENTAL HYGIEWE

Financial assistance to state and local health departments
began with grants to the states for the control of venereal dis-
ease which were first provided in 1918, as a direct consequence
of war time mobilization. In 1921 the field of federal partici-
pation was broadened by the Shepard Towner Act which provided
grants for the welfare and hygiene of infants. The grants for
venereal disease control ended in 1922 and those under the Shepard
Towner Act in 1929. The extent of cooperation between the United
States Public Health Service and state and local health depart-
ments was by no means so circumscribed either in time or interest
as these grant-in-aid beginnings might suggest. Assistance in
planning, the loan of personnel, the provision of educational ma-
terial, the exchange of information, arose in an earlier period
and covered the whole field of public health work. The U. S,
Public Health Service received appropriations to support demon-
stration public health projects in rural areas. Such projects
were operating in 2A states by 1938. Nevertheless the first con-
tinuous provision of grants for health purposes began with the
Social Security Act of 1935. By this legislation both the Public
Health Service and the Children's Bureau, the one in the Treasury
Department, the other in the Department of Labor, were authorized to
provide grants for state public health work. The Public Health
Service was to provide grants for general public health work, un-
der several categories, and the Children's Bureau was to provide
assistance for maternal and child health work and for corrective
work for crippled children. More recently grants have been pro-
vided for hospital construction by the Hill-Burton Act of 194-6,
and for mental hygiene by the National Mental Health Act of the
same year. Both of these programs are administered by the Pub-
lic Health Service.

Except for Crippled Children's Services and Mental Hygiene,
health activities in Illinois are carried on by the State Depart-
ment of Public Health, which receives grants from both the Public
Health Service and the Children's Bureau. The State Department of
Public Welfare operates the mental hospitals, among other acti-
vities, and now operates the mental health clinics which receive
federal funds under the Mental Health Act. The University of
Illinois provides services for crippled children through its
Division of Services for Crippled Children and receives grants
for that purpose from the Children's Bureau.

The allotments of money under these programs are variously
based. Total population is sonnetimes used in such fields as
general health, cancer and heart disease, hospital construction,
and mental hygiene. Sometimes it is based on such factors as
the relative proportion of live births or rural child population
in a given state. These bases are used for infant, maternal and
child health grants. In all grants for public health the pro-
portion of state matching funds required varies with per capita
income. In some programs the state matches federal funds dollar
for dollar, in others it contributes one third and the federal
government two thirds. In hospital construction the matching
share may come from local governments or even from non-govern-
mental sources. A part of the maternal and child health grants
and of the crippled children's service grants do not need to
be matched. The allotment formulas, of which there are half
a dozen or more in the health field, tend to make more money
available to the poorer states both absolutely, and in terms of
the proportion of the total expenditure which will be paid from
federal funds, but do not have this result in every case. In
the recent report of the Cormiission on Intergoverrmental Relations
there was criticism of these formulas because they do not appor-
tion funds in accordance with the financial capacity of the states.
The Commission found that states which received a high proportion
of federal contributions relative to their expenditures for health
services included some states with very low per capita incomes,
but also some states with very high incomes per capita.

In public health grants, in contrast to public assistance
grants, money goes to the state and local agencies for the pro-
vision of services ; there are no grants to individuals. The whole
program is preventive, or set up on a demonstration basis. Only
in exceptional cases are medical services provided to individuals.
The provision of medical care to indigents is a matter for public
welfare services, not for public health. The requirements of fed-w<^
eral legislation therefore have to do with organization, the
qualifications of personnel employed, the extent of state or lo-
cal matching funds, and the type of service to be provided. Con-
trols are less detailed than those imposed in the public assis-
tance programs in which hundreds of thousands of individual pay-
ments must be policed in some fashion. Federal health grants are
categorical. That is they must go to specified purposes; the
whole sum of the grant is not available for any purpose in the
field of public health to which the state might wish to devote it.
To this extent the federal program may impose a pattern of ex-
penditure on the state different from that which would otherwise
obtain. Not only is money from the federal government available
for certain health activities and not for others, but the states
to receive that money, must add to it money of their own. To

assure that there is a balanced program, the Public Health Service
and the Children's Bureau both require that the state must prepare
a complete public health program, including both aided and unaided
activities, in order to qualify for assistance. Thus, the speci-
fic activities which the federal government supports must be justi-
fied as a part of a well rounded health plan. In this as in other
grants provided through the Social Security Act, there must be a
merit system for recruiting state personnel who will receive fed-
eral funds. The ordinary operation of the State Civil Service
System satisfies this requirement for state personnel.

Grants for health are not a matter alone of federal grants to
the state. The state also provides assistance for local units of
government which undertake to provide public health services through
a full time public health staff. These may be county units, or they
may be set up on a district basis. Grants are on a per capita ba-
sis determined by the population of the health service unit. Of
the funds so made available, some come from the state treasury,
and a part from the federal grants to the state.

It would be hard to state briefly the wide variety of ac-
tivities which are included in the health program and supported
directly or indirectly by federal assistance. Table 19 lists the
major activities of the department as they are shown in its bud-
get and the approximate expenditure for each. The department com-
plies and analyzes vital statistics, that is births, deaths and
morbidity data, which are essential to the continuing development
of all programs of public health and medical research. It pro-
vides laboratory services for diagnosis, testing, and control,
for its own staff, for local health departments and for private
physicians who do not have access to such services in their own
area. It produces biologicals for free distribution to public
health agencies and private physicians. It licenses and inspects
hospitals and nursing homes. It assists public and private schools
in the development of health education. It provides health education
for the public at large. It operates clinics, demonstrations, and
does educational work in both communicable and chronic diseases. It
licenses and controls the operations and construction of water and
sewage disposal facilities in the communities of the state. It
controls stream pollution. It licenses fluid milk handlers in
areas where other agencies do not operate. It stands by to diagnose
and assist in the control of outbreaks of epidemic diseases. It now
operates two tuberculosis hospitals, a new venture for the state of
Illinois. It administers the grants system for hospital construction
under the Hill-Burton Act. Of all of these activities the ones
which have received the largest proportionate federal support have
been maternal and child health, tuberculosis control, cancer control,
heart disease control, and venereal disease control.

4.7

Hospital Construction Programs

Aid to local hospital construction began in Illinois only
when federal assistance was provided. In the years immediately
after the war, some of the state's post war surplus was made
available to supplement federal grants to local hospitals. To
cpjalify for assistance in hospital construction a state must pre-
pare and keep current a survey of hospital needs. The Public
hfealth Service, in cooperation with the State and Territorial
Health Of ficers, establishes the standard of beds per unit of
population which is the basic measure of hospital needs. The
results of the survey therefore indicate the areas which have
the highest priorities for aid. These are embodied in a state
plan which must be approved by the Public Health Service. Once
this is approved applications from individual sponsors are con-
sidered. These require detailed proposals as to construction and
equipment, services to be provided, and arrangements for adminis-
tration and financing. These proposals are received and approved
by the state Department of Public Health before being submitted to
the P.H.S. The state is obliged to provide licensing and in-
spection to insure that the future administration of the hospital
will be such as to fulfill the purpose of the federal grant. Each
hospital so constructed is required to provide a certain amount of
space for patients unable to pay for their own care, depending on
the extent of such free service available in other institutions in
the area. Comparable facilities must be available to persons of
all races. Since only part of the costs of construction are pro-
vided by federal grant, and since the state is not currently appro-
priating for this purpose, the balance of construction costs must
be raised by the sponsor, either a local government or a charitable
organization. The proportion of construction costs which will be
met from federal funds is calculated by a complex formula in' which per
capita income is inversely related to the federal share of the pro-
jects in that state. Of the national total of expenditure, the
federal government will contribute 50 per cent. As in all con-
struction projects in which federal moneys are spent, the contract
must be let by competitive bidding and minimum labor standards,
including the payment of prevailing wages, must be met. As the
accumulated deficiencies of the past are being met, the number of
projects being started is declining, although there is a consider-
able expenditure on projects already under way. Perhaps the most
difficult problem of the immediate future will not be the pro-
vision of hospital facilities but finding the money to operate
properly those already in existence. The low incomes of the
areas in which many have been built will make it difficult to
finance them either from private or local public sources.

As of September 1956, 73 hospitals or other medical facilities
had received federal grants for construction projects. The
earliest project to be occupied was completed in 194-9. Thirty
two projects are currently pending. The great majority of the
hospitals to receive aid are non-profit private hospitals, 60
out of the total of 73. The public hospitals were state, city,
county, township and district operated. There were four pUblic
health centers and two laboratories in addition. The total con-
struction costs of these projects were over 11/V,000,000 dollars,
of which 29.6 million or approximately one quarter was contributed
from federal funds, 8.5 million from state, and 76 million or
the balance, almost three quarters, by the applicants. Six
thousand beds were provided by these additions of which over two-
thirds are general hospital beds.

Mental Hygiene Programs

Mental hygiene grants are rather recent. They represent
a stimulation to the states to move in a desired direction such
as had played a large part in the origin of most grant in aid
programs. The scale on which they are provided at present is
such that they are more important as a means of stimulating a
new activity than as a means of financing it at an adequate
level. It is notorious that most of the effort in the field of
mental health in the past has been in the provision of insti-
tutions for custody and attempted cure rather than prevention or
early treatment. Grants in aid for mental hygiene are for the
setting up of clinics for diagnosis and treatment of mental ill-
ness in its early stages before institutional care is necessary.
Since state funds are so heavily committed to the maintenance of
existing mental hospitals this type of federal aid is a very wel-
come addition to the financing of a relatively new program. In
Illinois the Department of Public Welfare operates the mental
hospitals, and it now receives directly the federal funds which
are available for clinic care.

The Department has been able to finance a greatly expanded
number of community mental health clinics, out of state as well
as federal funds. Since the state has been requiring that patients
in the state hospitals able to do so pay for part of the costs of
care, income from this source has been accumulating in a special
mental hygiene fund which can be spent only for research and pre-
ventive work. State and federal funds together therefore sup-
port outpatient services in a number of cities in the state. With
the expansion of state expenditure, federal contributions meet a
relatively small part of the costs of the program. The principal
limits on expansion just now are not the availability of finances
but the shortage of trained people to staff the clinics.

faoqram for Crippled Children

Crippled children's services is another specialized health
activity which is carried on outside of the state Department of
Public Health. Like other health grants, federal aid for this
Service was first provided in the Social Security Act of 1935.
When Illinois came under the program, the University of Illinois
was designated as the administering agency in this state. It was
already providing services for crippled children which preceded
by many years the federal grant for such services. Federal grants
are administered through the Children's Bureau. Like other grants
originating in the Children's Bureau, the federal grant is in two
parts. One part provides a certain sum per state based on child
population and per capita income, and does not require matching.
The other part, alloted on the same basis, does require matching.
Thus, the poorer states are required to pruvijde a lower proportion
of state matching funds than are the more wealthy.

Crippled children's services go directly to the children who
need help to overcome some crippling condition and whose parents
cannot pay the cost of the necessary medical and surgical care.
The two essential activities are case finding, which is done
through clinics organized in cooperation with local medical
societies and private physicians in the various areas of the
state, and the actual provision of necessary services. Treatment
is arranged through whatever hospitals and medical specialists
are best able to correct the child's impairment, and costs are met
out of the state's treasury, as supplemented by federal funds.

The staff of the program is primarily medical and the
Division of Services for Crippled Children is a unit within the
Chicago Professional Schools of the University. Nurses trained
in orthopedics are stationed in various parts of the state and
have the immediate responsibility for organizing the case finding
activity. The medical staff, which includes consultants in various
parts of the state, decides what restorative measures are called
for and what facilities are available to provide them, including
the University's own Research Hospital. In this program there is
a considerable amount of cooperative activity between groups of
states and the Children's Bureau. Chicago is a regional center
for medical research under the program and the Illinois Division
in cooperation with hospitals and medical schools in the Chicago
area has undertaken research work in the correction of a number
of crippling conditions. The state expenditure on this program
has grown steadily, until federal funds pay a relatively small
part of its current cost. Like other grant programs however, a
plan of services and a budget are submitted for approval. As
indicated, there is a considerable amount of consultation and
cooperation between the medical staffs of the Children's Bureau
and of the Division.

In considering the effect of federal aid on the work being done
in the field of public health within the state of Illinois one must
recognize that to some extent the existing program is shaped by
the availability of federal aid and by the presence of an adminis-
tering federal staff. In some health activities there is much more
federal money than in others. This both supports these activities
at a higher level than state funds alone might support them; it
also frees funds for expenditure of non-aided activities. In some
activities there has been a considerable variation in the level of
available federal funds from year to year which has resulted in
wasteful variations in the level of aided activities. On the
other hand, federal funds are also available for some purposes
for which the state has been very reluctant to provide money.
The most important of these has been the training of health (and
also welfare) personnel. Costs of attendance at approved insti-
tutions have been paid, and persons in training receive their
salaries during the training period. This has enabled people to
get specialized training in such fields as public health engineering,
orthopedic nursing, psychiatric nursing, medical social work, and
health education. People who entered the department with a basic
training in medicine, dentistry, nursing, or sanitary engineering,
have been enabled to get further training in public health adminis-
tration and problems, including training in special fields. In
view of the shortage of trained people in all of the fields related
to health this has been absolutely necessary to provide a minimum
staff for essential operations.

The general operation of the department has also been affected.
The department is able to profit by the experience of other states.
Its specialists in various fields receive encouragement and assis-
tance in shaping their programs, whereas otherwise there may be
relatively little interest in the work which they are doing. Fed-
eral grants, while not large in comparison to grants for other
purposes, make up a significant part of the department's budget.
The department has not fared overly well in state budgeting and
appropriation decisions. When federal contributions have been re-
duced, as in the provision of facilities for the care of premature
infants, who account for an unduly large share of the total of in-
fant deaths, the state has not readily taken up the slack. Thus
even in a comparatively wealthy state important activities of the
health department are dependent on federal aid for their contin-
uation at a reasonable level.

Table 18 - IV

Grants and Expenditure for Illinois Crippled Children's
Services, Fiscal year ending June 30, 1956

Total expenditure $ 2,039,519 100. 05C

Federal reimbursement ^45,732 21.9%

Source: University of Illinois Report of the Comptroller, 1956.

UNIVERSITY OF ILLINOIS
LIBRARY

Table 19 - IV

Expenditure of the State Department of Public Ffealth from State
and Federal Funds, Fiscal year ending June 30, 1956

Federal

Total

Federal

share as per-

Expenditu.

re Share

cent of expense

General Administration

^ 8U,838

^321,401

36.06%

Dental Health

111,131

50,571

A9.10

Hospitals and chronic .

Illness^

396,668

125,200

31.56

Laboratory

902, A97

53,A19

6.29

Local Health Services^

A02,936

18,037

U.AB

Milk Control

100,0.^2

19, AU

19.41

Preventive Medicine''

3,108,118

1,4A7,221

46.45

Sanitary Engineering

361,681

35,776

9.89

Tuberculosis control^

196,172

106,770

54.33

Aid for Hospital Con-

struction

2,873,381

100.0

Grants for care of hospi-

talized tuberculosis

patients

2,077,871

Grants to local health

departments

721,935

102,978®

14.26

TOTAL

$ 12,097,290 $6,288,456

51.98

Total less hospital
construction

9,223,909 3,415,075

37.0

Source: Department of Finance, Annual Report. 1956

3 Primarily cancer and heart disease

^ Not including grants to full time county health departments,

listed separately.

c Control of epidemic and other infectious diseases; purchase of

polio vaccines to total of $2,130,299, with federal contribution of

$1,130,200, or 53.05% included in this total.

d Grants for care of tuberculosis patients by local hospitals

listed separately.

® Estimated from previous biennium

^ ■•.■>:

CHAPTER V

PUBLIC WELFARE

The ordinary usage of public discussion gives the term
"Public welfare" the particular meaning of special assistance
to members of the community who apparently could not survive with-
out it. Examples of public welfare are such diverse activities
as public assistance, various measures for the protection of
children, the control of juvenile crime and delinquency and
vocational rehabilitation. The care of the mentally ill and
employment security are related activities, but these are dealt
with in other sections.

The earliest example of federal expenditure to support state
welfare programs was the Maternity Act of 1921 which provided money
both for maternal and child health services and for welfare services
to needy mothers, ibcpenditures under this early effort ceased in
1929, though the Act authorizing them was not then repealed.^ In
the same year grants to the states for vocational rehabilitation
were authorized. Not until 1931 did federal aid for welfare pur-
poses extend to programs involving the large numbers of persons
and amounts of money with which ws are familiar today. In 1931
state efforts to provide for the needs of the large numbers of
persons made destitute by the depression of that year were supported
by federal loans, the repayment of which was later remitted. After
1933 the federal government took over a large share of all relief
costs. By 1935 federal grants for the unemployed had come to be
limited to work relief, the states being left with the costs of
assistance to the unemployable. In practice the combination of
work relief and public works was never able to employ all of the
employable, and the state's relief burden was correspondingly large.

As the federal government undertook new responsibilities in
a time of economic crisis, so did the states. Previous to 1931,
welfare, except for institutional care, and a few special programs
such as assistance to mothers with young children, was left to
local units, cities, counties and townships. In many places it was
largely provided through institutions such as the county poor farm,
or through payments in kind on an emergency basis. As the depression
continued, the states undertook to pay a larger and larger share of
relief costs, and money payments to sustain persons in their homes
became the normal method of assistance, where institutional care was
not required.

1. This act provided the occasion for a test of the spending power
of Congress and confirmed it as being virtually beyond judicial
limitation. Massachusetts vs. Mellon. 262 U.S. /W.7 (1925)

5L,

These developments were put into a very systematic form by
the Social Security Act of 1935 which provided not only for re-
lief to the needy, but insurance against loss of income from age
and unemployment, and grants for health and child welfare. The
matter of relief was put on a categorical basis, with federal aid
being extended to several categories of needy persons with varying
eligibility requirements.

The categories set up for federal grants have become the
standard legal and administrative basis for relief to the needy
in all of the states. They are: grants to the needy aged, or
Old Age Assistance; grants to needy mothers with yound children,
or Aid to Dependent Children; and grants to the needy blind. Since
then the totally disabled have been added as a grant category. States
receiving grants onder these categories were required to base assist-
ance on need - the consideration of income and property in relation
to the cost of the necessities of life, and to limit assistance
to the difference between resources and need. People outside of
these categories who might become destitute were and are solely
the responsibility of state and local government. Originally, old
age assistance payments, with federal participation, might not be
made to persons living in institutions. Now payments may be made
to aged persons living in public or private nursing homes, if there
is state licensing and inspection of such homes. Thus provisions
of the Social Security Act embodied the whole transformation of
"relief" into "public assistance" with its systematic investigation
of resources and a standard scale of need. The pressure of the
administrative load and of cost had already forced the states in
this direction. The Social Security confirmed the trend and made
conformity to it the price of federal contributions to the large
assistance outlay.

The categories in the public assistance program are self —
evident. The Old Age Assistance category includes persons with
a year's residence in Illinois, who are 65 or older, and who
have an income inadequate for their needs. They are ineligible
if they are in a mental hospital, though they may be patients
of a nursing hone, privately or publicly operated.

Aid to Dependent Children is a more complicated category since
it is available to both children under 18 and a mother, or a person
who undertakes the responsibility of a mother, who live together as
a family unit, and who are without income because of the death, dis-
ability or desertion of the father. It probably embodies most
completely the general purpose of the Social Security Act — to
encourage the states to base their welfare programs on the maintenance
of the family Qnit in its own home, whenever possible. The Blind
Assistance and the Totally Disabled programs provide for persons

of whatever age whose handicaps prevent their earning their own
way. Both are now coupled with a requirement that the aided
person apply for vocational rehabilitation so that his earning
power may be restored, if that is possible.

There are various other requirements in the Social Security
Acts which the states must m.eet, besides respecting the limits
of these categories. They require the states to provide assistance
to persons who meet certain standards of eligibility, and to limit
the assistance they provide to persons actually in need. Thus,
maximum residence requirements are set out for all programs, and
certain minimum conditions of eligibility are defined. For the
aged, not more than five years of residence in the state out of
the last nine years previous to the application may be required.
The Illinois requirem.ent, as in most other states, is a year of
residence prior to application. There is a similar maximum
residence for the blind and the totally disabled, and for both of
these the Illinois requirement is also one year. The maximum
residence requirement for the ADC program is set out at one yearj
in Illinois a year's residence by either mother or child is
sufficient. Blindness and disability are defined in the federali"
statute. There is a manimum age for recipients of old age assist-
ance, and a maximum age for dependent children.

Before the crisis of the depression of 1931 few states had
any statewide administration of general welfare programs. When
state assistance was provided to the welfare activities of local
units, it was provided with very little oversight. After 1931 most
states improvised state agencies for disbursing the state and federal
contributions to relief costs, most of them like Illinois setting up
a Temporary iibergency Relief Administration of some kind, which
distributed money to local units. The Social Security Act requires
that there be a state agency supervising all local agencies which
disburse federal funds, if public assistance is left in the hands
of local governments. All disbursing agencies must be public rather
than private. The early relief efforts often worked through existing
private charitable organizations. The progrso- must be statewide,
with statewide standards of eligibility and need. By amendments ^^
in 1939, all employees in assistance programs must be selected under
a merit system. Ftersons denied relief must receive a hearing on the
reasons, if they request it, and information concerning applicants
must be safeguarded against improper disclosure.

If these requirements seem unnecessarily specific it must be
remembered that in 1935 all kinds of experiments in providing relief
were underway. The aged were already a favored group with state
legislatures and in some states grants were made- to the aged without
any investigation of resources, the assistance given being regarded
as a pension, a term still used in fiscal reports in Illinois.

County standards might vary greatly, depending on the prejudices
of local officials and the wealth of the local area. The ideal
of setting up an administrative system which would permit all
applicants to be treated fairly and yet avoid dissipating funds
by grants to those who did not need them was reached only by
trial and error.

The setting up of a more reliable administrative system
in which the state provided standards and oversight was accompanied
by a steady shift of the costs of relief from local to state
treasuries. In Illinois the whole relief load, except for general
relief, was transferred to the state, though in stages, not all at
once. The requirements of the Social Security Act reflected needs
of which the states were becoming aware at the time of its passage.
In the early years the provisions of the act undoubtedly did coerce
the states into achieving more order and uniformity in administration
than they might have achieved on their own motion.

In addition to the above requirements for states receiving
aid, which are errhodied in the Act itself, there are administrative^—^
regulations which are set up by the Department of Health, Education
and Welfare, more particularly by its Bureau of Public Assistance.
The Department through the Bureau approves all state laws on public
assistance programs, administrative organization and procedure, and
state policies, for conformity to the federal act. For example,
a change in a state law which made old age assistance for all
persons over 65 a matter of right, regardless of- need, would con-
travene the standards of the Social Security Act, and make the
state ineligible for federal grants. In addition the Bureau,
through its field representatives, operates a continuous system
of inspection and audit.

Now that public assistance policy, administrative organization,
and procedure are a relatively settled matter there is little
occasion for specific approval or disapproval of most aspects of
state operations. Budgets must be submitted annually however, and
must be approved before the state is eligible for reimbursement.
Legislative and administrative changes in the basic scheme must be
approved by the Bureau and they are incorporated into the state plan
of operations already on file. One of the requirements of this as
of other aided programs is that employment of staff be on a merit
^asis, and a regional staff member is assigned to checking on state
compliance with personnel standards and to giving them such assistance
in personnel matters as they request.

The assistance part of the welfare program is in the hands
of the Public Aid Corrmission in Illinois which has its headquarters
in Chicago. Assistance was split off from the Department of Public
Welfare in 1941 where it had been placed after the Temporary Bnergency

Relief Commission was abolished. The Commissisn is bi-partisan and
its members are not expected to give full time to the details of
administration. They appoint an administrative secretary who is
the active head of operations. The handling of applications is
in County Departments of Public Vi/elfare in each County, which are
little more than the local administrative offices of the Corrimission.
However, there is an advisory board for each county, appointed by
the county supervisors, who in turn appoint a superintendent and
subordinate staff. The superintendent and his staff must be
appointed from lists established by the examinations formerly given
by the Merit System Council, now by the new Department of Personnel.
As liason between the headquarters staff and the county depart-
ments are five regional offices, each with a group of counties
under its supervision. All salaries and all costs are paid from
the state treasury. The general assistance program which covers
all cases of need which do not fall into the categories wf the
needy aged, dependent children, blind or totally disabled is left
to township or to county authorities.

Also in Chicago is the regional office of the Department of
Health, Education, and Vfelfare which is responsible for Illinois
and many of the grant programs among other states in this area.
The Bureau of Public Assistance has representatives in that office
who negotiate such questions as come up with the state agency
receiving the assistance grants, and who handle the work of advice,
inspection and audit. All payments to the state are audited even
to the audit of a sample of case records both to insure that only
persons receiving assistance receive it and to check on whether or
not apparently eligible persons are being refused assistance. In
the course of this work, and the course of various cooperative
enterprises such as training of staff and the restudy of procedures,
the regional staff attempts to keep informed about the policies in
effect, the degree of effectiveness of state administration and the
continued exclusion of improper Influences.

Federal financial support for public assistance takes the
form both of participating in the payments to individuals and of
sharing administrative expenses. Thus, each payment made to an
eligible mingles federal and state money according to a set pro-
portion. That proportion has steadily tended to include more
federal money. In the 1956 session of Congress the federal share
of old age assistance payments was increased to four fifths of the
first 30 dollars per month per person and one half of the balance
up to a maximum total payment of 60 dollars. Any amount beyond
that would be entirely a state matter. Thus, a payment of 60
dollars per month to an individual would represent 39 dollars from
the federal treasury and 21 dollars from the state. In the Aid to
Dependent Children Program, a payment of up to 32 dollars was

authorized with federal participation for a needy adult who is the
homemaker, 32 dollars for the first child and 23 dollars for each
additional child. Of this amount the federal government will pay
l^lVths of the first 17 dollars of the average per person per
family, and one half of the remainder. Thus, if payments averaged
30 dollars per person in a large family, the federal goverrcnent would
pay 20.50 dollars of that 30 dollars per person, or over 2/3 of the
assistance provided. In the future allowances which are made for
medical expenses will be apart from the totals of these subsistence
payments, so the total for which federal reimbursement is still
further increased. Half of approved administrative expenses are
rein±>ursed. On the average in Illinois about half the total costs
of the public assistance programs are paid from federal grants.

The general assistance progran which is left to county or
township authorities, depending on whether township organization is
in effect or not, provides for state participation in general
assistance costs only if the administering unit levies a property
tax of stated amount, and if the proceeds of this tax are insuffi-
cient to meet legitimate relief costs. In about twenty counties in
Illinois one or moie townships receive state assistance in their
welfare load. In the counties which receive state assistance, stan-
dards of eligibility and of a-^sistance are supposed to be uniform
with what they are in the other assistance programs. Administration
in most counties is in the hands of township supervisors, who are
not likely to have a trained staff, if they have any assistance at
all. A comparison of the average level of payments per person be-
tween counties and between general assistance and the state adminis-
tered aspects of public assistance show something of the effect of
federal and state as against local administration. The state
administered public assistance payments are both higher and more
uniform.

From the standpoint of the federal budget, public assistance
grants have a peculiarity which has made them the objects of
criticism by the recent Commission on Intergovernmental Relations.
They are "open ended" as compared with highway grants, or grants for
agricultural research and extension. There is no fixed amount which
will be distributed by an allotment formula to each state. Rather,
payments to each state are dependent on the number of persons who
receive aid and the extent of state payments. This leaves the
total federal corrjnittment for any fiscal year indeterminate. On
the other hand the state itself cannot budget expenditures under
such a program exactly since they are made in response to individual
needs which are determined by large uncontrollable conditions. In
one period there may be an unexpended balance, and in others, as
has been true of recent fiscal periods, a supplementary appropria-
tion may be necessary unless the level of assistance is to be

drastically reduced. The present form of the grant assures that a
reasonable uniform proportion of the expenditure will be met from
one year to another and that federal monies will not be misused
since there is participation in each individual grant, and reim-
bursement may be refused for individual payments if they are found
not to be proper.

A more telling criticism is the influence which the present
grant provisions exert on state expenditure. States are encouraged
to spend their money on the parts of the relief program in which
the federal government participates and to slight general assist-
ance for which state and local government must bear the whole cost.^

Child Welfare Services and Vocational Rehabilitation

Whereas the assistance programs are primarily concerned with
money grants to those whose immediate problem is lack of income,
the services discussed in this section attempt to either avoid or
cure some of the conditions which result in dependence. Vocational
rehabilitation is a direct step in this direction; child welfare
services have a more indirect, but probably no less effective im-
pact. We begin with the latter. The Child Welfare Services pro-
vision of the Social Security Act authorizes a relatively small
appropriation for distribution among the states. Forty-thousand
dollars is available annually to each state and the remainder of the
sum currently appropriated is distributed in the proportion of the
rural population under 18 of each state to the whole rural population
of that age group in the United States. There is no specific require-
ment for state matching funds, but state participation is expected
in proportion to the state's ability. This is a matter for negotia-
tion rather than for rule.

The provision for distribution according to rural population
is an indication of the major purpose of this grant. The services
to be provided are intended to strengthen homes and to provide care
for neglected and delinquent children in rural areas in which such
services are relatively unavailable,. The rural local public
authorities who are charged with the care of neglected and delinquent

2. James A. Maxwell, Federal Grants and the Business Cycle,
National Bureau of Economic Research Inc., 1952. Maxwell says that
New York in 19-4-6 spent three times as much on the categorical pro-
grams as on general assistance in 194-6, whereas Mississippi spent
188 times as much. Ke suggests that in a largely agricultural state
like Mississippi the number of persons likely to be in need of
general assistance is likely to be far greater than in Mew York.

children are generally able to provide only fiscal assistance and
institutional care. The location and supervision of foster-care
homes, the investigations necessary to adoption proceedings, the
provision of counseling services to families with problem children
or to problem families, requires persons with training and
experience who are not ordinarily available through public or
private agencies outside of very large cities. It is to assist
in the creation of such services and to provide some trained
staff that child welfare grants are made. Since each state has
different problems and different facilities there is no standard
plan to be followed. The only uniform requirement for all states
is that there must be some state agency to receive grants and
oversee their expenditure and that all state personnel be employed
on a merit basis.

In Illinois, child welfare services are the responsibility
of the Division of Child Welfare Services in the State Department
of Public Welfare. The principal work of the department is the
management of state mental hospitals and of schools for the handi-
capped. Nevertheless it has the legal authority to operate various
programs for the protection of children and license child caring
agencies of all kinds. The field offices which it maintains for
various non-institutional services include child welfare specialists
on their staffs whose salaries are partly paid with federal funds.
Their services axe available to county courts and other local
authorities charged with the welfare of children. The state also
cooperates with various local governments and with private agencies
in supporting child guidance clinics in localities which desire them
and are willing to share in their support.

A considerable part of the federal grant is used in subsidizing
training for child welfare work. Those who are accepted for such
training alternate periods of attendance at graduate schools of
social work and periods of work for the department or for one of
the cooperating local agencies. Cnce their training is com^
pleted they are pledged to work for another period of two years
before they are free to consider other jobs.

The grants for Child Welfare Services are administered by
the Children's Bureau which is a unit within the Department of
Health, Education, and Welfare. It has representatives for child
welfare services in the regional office of the Department in
Chicago. As in other grant programs a plan must be filed, which
can be amended from time to time, and budgets are negotiated
annually. Since there are few statutory requirements, the process
of negotiation is flexible and the state largely determines its own
program. Since the state staff is small, there is considerable use
of the Children's Bureau regional staff for consultation on the

development of new programs and in the evaluation of existing work.
On the whole grants in this field have not been as successful in
inducing an expanded state program as they have been in such
activities as vocational rehabilitation. Without federal support
this type of activity would undoubtedly be considerably curtailed.

Vocational rehabilitation is a welfare activity which until
recently has been administered apart from other welfare programs.
It began as a function of the U. S. Office of Education in 1920,
at the close of the first World War, to provide a service to those
injured in industry and to wounded servicemen. Vocational Rehabili-
tation provides measures such as physical restoration, training and
vocational counseling which are necessary to restore the injured or
the handicapped to useful employment. Grants to the states for this
purpose are administered by the Office of Vocational Rehabilitation,
once a part of the Office of Education, but now a coordinate unit
within the Department of Health, iiucation and Welfare.

This grant is one of the few which imposes an administrative
pattern on the state which would probably not be used if there were
no federal requirement. By the terms of the original federal act,
the state Board of Vocational Education must be designated as the
administering agency, except for the rehabilitation of the blind,
which may be placed elsewhere. In Illinois, the Vocational Rehabili-
tation Service provides rehabilitation services for the blind. This
Board in Illinois is partly appointed and partly ex-of ficio. :made
up of the Superintendent of Public Instruction, the heads of certain
state departments and otheis specifically appointed. The Vocational
Rehabilitation Service, which has charge of the program in Illinois,
is therefore nominally under the control of the Board of Vocational
Education, but the Director of the Department of Fliblic Welfare is
designated as executive officer. The active head of the Service
is the Supervisor.

In addition to the requirements as to overhead organization,
the statute authorizing grants to the states for vocational rehabili-
tation requires that a state plan be submitted indicating policies
and methods and limiting assistance to employable irtdividuals as
prescribed by the Secretary of Health Education and Welfare.
Acceptable personnel qualifications must be set out. Once the plan
is approved, annual budgets must be submitted and approved. States
are required to provide services to any civilian employee of the
United States disabled while in the performance of his duty and
to any war disabled civilian.

In the last several years the availability of vocational re-
habilitation has been extended considerably since various chronic
conditions such as heart diseases, epilepsy, mental deficiencies.

arrested tuberculosis or mental illness are accepted as the basis
of rehabilitation services. Furthermore, the federal statutes
require that persons receiving total disability assistance and
those getting disability payments under the extension of the Old
Age and Survivors Insurance system be referred to the Vocational
Rehabilitation Service. Even persons receiving Old Age Assistance
who are thought to be potentially employable may be referred.

It is obvious that a great diversity of skills is demanded
in the administration of such a program. Medical aspects of dis-
ability, the employability of persons with various kinds of skills,
the available facilities for training, and the emotional and intel-
lectual capacity of the persons being assisted, must be weighed in
the decision to accept a case, and as to the course of treatment
and training to be undertaken. The personnel of the program who
do the work of investigating applications and working out a course
of action for those accepted have the title of "counselors". The
professional staff of the service includes A5 counselors, super-
visors of specialized services, and medical, psychiatric and psy-
chological consultants. The staff works through four regional and
seventeen district offices, each with at least one professional
staff member.

Once a case is accepted and a course of action worked out,
the medical and training expenses beyond the resources of the
applicant will be met including a subsistence allowance. About
five hundred dollars was spent per case in fiscal 1956, and over
four thousand handicapped persons were placed in useful employment
in the course of that year. Orthopedic handicaps accounted for /+3
per cent of the cases, tuberculosis, 23 per cent, and conditions
varying from deafness to mental retardation accounted for the
remainder.

In 1956 the federal appropriations for vocational rehabili-
tation were very greatly increased, and the grants put on a
different basis. State allotments are proportional to population
and per capita income, and whereas in the past no fixed matching
expenditure was required by the states, now matching requirements
are to be proportioned to per capita income. In fiscal 1956 nearly
64- per cent of the costs per case were supplied from federal funds.
By 1964--65, Illinois will receive only 51 per cent of case costs.
In the years between the federal share will be gradually reduced.
Actual amounts available from the federal government will be
larger, but to take advantage of them state expenditures will have
to be substantially increased.

Surplus Agricultural Commodities

Like the school lunch program, to which it is closely
related in its origin, the gifts of surplus commodities to the
states are essentially a continuation of a depression-born means
of supporting farm prices. The grants of foodstuffs to the states
for use in state institutions and for distribution to those re-
ceiving public assistance permit waste to be avoided even though
foods are withheld from the ordinary markets. The present authori-
zation for such distribution permits the Commodity Credit Corpora-
tion to make grants of goods from its storage warehouses in order
to avoid v-'aste to school lunch programs, state and local public
welfare agencres, and to private welfare organizations. There is
a further authorization for the purchase of perishable agricultural
commodities expressly for the purpose of donations to schools,
charitable institutions, and needy persons. The school lunch pro-
grams receive the largest part of the commodities so purchased, but
the distributions to institutions and to the needy are in very sub-
stantial amounts.

The largest problem which the state faces in taking advantage
of these grants of surplus foods is in making arrangements for
their distribution from the points at which the federal authorities
make them available to the ultimate users. The Department of
Agriculture does not undertake to distribute foodstuffs to the
ultimate users or to repackage them in quantities suitable for the
use for which they are intended. For the large users such as
state hospitals, distribution is not a difficult undertaking, since
they are few in number, and each can take and store relatively
large shipments.

Scattered small scale users like the school cafeterias on
the other hand present difficulties. The Office of the Superin-
tendent of Public Instruction has the responsibility for setting up
a distribution system for the participating schools in the state.
This has been done through contracts with private truckers and
warehouses, in the letting of which some controversy has developed.

A considerable degree of control is retained by the federal
government in this program. The administrative arrangements are
embodied in an agreement between the Department of Agriculture and
the state agencies which will receive and distribute the commodities.
The Department provides information as to food likely to be avail-
able and the state makes requests for particular corrmodities giving
shipping instructions. The Department has a Food Distribution
Division within the Agricultural Marketing Service, and this Division
in turn has an area office in Chicago through which the Illinois
agencies receive their shipments. There is a periodic audit and
inspection to make sure that the food granted to the state is used
for the purposes for which it was intended.

Table 20 - V

Public Assistance Recipients and Expenditures in Illinois
Fiscal year ending June 30, 1956

Direct Assistance**

Old Age Assistance
Aid to Dependent Children
Blind Assistance
Disability Assistance
General Assistance

County and Township
Units receiving state
funds

County and Township
Units not receiving
state funds

July 1955

—

June 1956

Average Monthly
Number of Persons*

Ave;

rage Expenditure
Per Person

274,821

45.86

92,758

in 88,619

60.80
34.24

3,491
6,908

67.40
81.55

83,816

37.34

(65,657)

(18,159)

(41.38)

(22.77)

Source: Illinois Public Aid Conmission, June 1956

* The number of persons in the categorical program are those in

active cases for whom payments were made either directly to them

or on their behalf. It does not include active cases for whom

payments were not made during the month.

** Persons receiving assistance under the categorical programs

who also received supplementation to their grants from General

Assistance have been counted only once in the total.

Table 21 - V

Expenditures of Illinois Public Md Commission - Actual Federal
Share as Per Cent of Total Expended and Estimate Fiscal 1957.

Actual

55 -56

Operations 9,677,684.

Federal Share 4,375,552

Grants to Local Govern-
ment and indivi-
duals 146,229,662
State Share 89,839,130
Federal Share 56,390,532

Old Age Assistance
Federal Share

Aid to Dependent
Children

Federal Share

Blind Assistance
Federal Share

67,172,434
34,961,965

36,027,897
17,273,009

2,807,018
1,386,418

Disability Assistance 6,723,769
Federal Share 2,789,140

Burial Awards
Federal Share

600,000

To Local Government for

General Assistance 32,898,544.

Federal Share " ' -'

Federal Share as
Per Cent of Total

45.2^

38.56

52.0556

47.94

48.68

4.1.48

Estimated
56 - 57

10,310,541
4,985,147

151,528,338
88,404,597
63,123,741

70,227,566
36,700,34A

40,422,103
20,003,015

2,912,982

1,4.75,806

11, 264,, 231
4,944,567

600,000

26,101,456

Source: Illinois State Budget, 70th Bienni

urn

Table 22 - V

Estimated Public Assistan'"e Expenditures for the 70th Biennium

July 1, 1957 to June 30, 1959

[in millions of dollars]

State and Federal Shares of Public Assistance

Programs re-

Federal

ceiving

Federal

State

State Share

Federal Aid

Total

of Total

of total

Old Age Assistance 73,565 68, 179^^1, 7V. 51.9^ A8.15^

Aid to Dependent

Children

39, lU

32,680

71, 82^

5^.5

-^5.1

Blind Assistance

3,018

3,0^2

6,060

iV9.8

50.2

Disability

Assistance

9,157

10,375

19,532

A6.9

53.1

Administration

11,671
^136,555

12,5^

ai,2u

263, 27^

^8.2
51.8

51.8

TOTAL

^126,819^:

A8.2

Programs not receiving

Federal Aid

General Assistance * 51,946 ^51, 9A6

Total all

100

Burial Awards 1,200 1,200 - 100

expenditure ^136,555 ^179,965*316,520 43.7 56.9

Source: Illinois State Budget. 70th Biennium

Table 23 - V

Expenditures and Workload for Vocational Rehabilitation,
Fiscal year ending June 30, 1956

Total iSxpenditure

^ 2,093,209

100.0^

State Share

769, 25A

36.7$

Federal Share

1,323,955

63.3%

WORKLO/O

Total Number Persons Referred 17,763

Number awaiting action 2,869

Cases handled 1^,89A.

Ineligible 3,40A

Current Active Load 6,992

Cases Closed but not Rehabilitated 359

Successfully Rehabilitated 4,139

Average Case Load per Counselor 156

Handicaps of Rehabilitated Person

Orthopedic

- t^%

Epileptic

- 3%

Tuberculosis

— 23

Blind

~ 3

Hard of Hearing

— 10

Cardiac

~ 2

Mentally 111

— 6

Visual

~ 1

Deaf

~ U

Mentally

Retarded — 1

Others

~ 1

Origin of Disability

Disease

66;

Other Accidents

Congenital

Bnnployment Accident

Source: Illinois Division of Vocational Rehabilitation, Annual
Report. 1956

-.-..■..•^i)*"

Table 2A - V

Federal Contribution to Expenditure for Operations of State Public
Welfare Department, Fiscal year ending June 30, 1956

Tfttal

General Departmental admin-
istration 1,236,732*
Federal contribution
(veterans bureau)

Operating costs-all psy-
chiatric hospitals A.8,730,395

State expenditure-mental

health centers 495,391

Federal contribution to

mental health services 14.7,725

Total expenditure mental
health (not including
general administration) ( 49,225,786)

Services to children and

families** 2,635,225

Federal contribution
child welfare services
Institutional care handi-
capped children 2,329,837
Federal share
Institutional care adult
blind 287,561
Federal share
Specialized medical services

(eye and ear infirmary) 581,963

Federal share
Institutional care of vet-
erans and dependents 1,995,682
Federal share
Total expenditure of

department for operation*58,468,511
Total Federal contri-
bution !

Federal Share

Federal

as Pel Cent of

Total

92,188

201,809

none

0.351

7.7

631,849*** 32.0

.,073,581

1.8

— ■■ ■ ' 111 ■ - 1^ Ma ■■ ■■ I I. II ■■ Ill ..... p

Source: Department of Finance, Illinois State Budget. 70th Biennium
* Does not include $147,725 contributed by Federal Government for
preventive mental health services through community clinics
** Including Institute of Juvenile Research
*** Soldiers and Sailors Home - Quincy

CHAPTER VI
EMPLOYMENT SECURITY

Unlike the other grant proc^rans, employment security, which
comes under federal direction and control to a very high degree, is
only in part based on the federal power of expenditure. Its pri-
mary basis is the power of taxation. The Social Security Act of
1935 as amended imposes a payroll tax of three per cent on employers
«f four or more persons which is remitted up to 90 per cent if the
employer is paying contributions into an approved state unemployment
compensation system. The system of public free employment offices,
which is the other half of employment security, is brought into
this compulsory system because the state unemployment compensation
laws must include provisions making registration at a public
employment office as a condition of receiving benefits. Thus the
states are encouraged to enter the unemployment compensation field
and to expand whatever services they may have previously provided
in the employment field. Their doing so imposes no net cost to
employers since they are required to pay the state tax in the
absence of a state program. Illinois did not adopt an unemployment
compensation act until 1937. The system of employment offices is
much older, though it was not well developed until the states began
to receive assistance from the federal government for the operation
of emplowent services during the depression.

Unemployment compensation is essentially an insurance pro-
gram, like Old Age and Survivors Insurance, which is entirely
federal. It offers benefits only to those who work a minimum period
in covered industries for whom contributions are made by employers,
and benefits ?re in proportion to their earnings. The rate of
weekly benefits depends on the rate of earnings; the duration of
benefits, on the length of a person's employment since he last
drew benefits. Benefits are financed out of special taxes on pay-
rolls which the states must deposit in the federal treasury, ex-
cept for the balance kept on hand to meet current claims. Although
costs of the program are included in the state budget and in appro-
priation acts, the system of financing is separate from the general
operatien of state finance. Tnis difference is the more striking
because all administrative costs of both unemployment compensation
and the employment service are paid from the federal treasury.

Because the unemployment insurance program as adopted in the
United States requires individual contributions and payment records
to be kept for both employers and employees, and benefits must be
separately calculated for each applicant, it is a very complicated
program to administer, requiring a vast amount of paper work.

Furthermore, since it is an insurance program, great reserves are
accumulated, which might easily win the attention of untrustworthy
officials. There are tens of thousands of payments a year in
relatively small amounts and these must be made promptly. Either
dishonesty or incompetent administration could be ruinous financially
and destructive of the purpose of the program. At the time of the
drafting of the Social Security Act program only Wisconsin had a
well established program of unemployment compensation. It is
therefore not surprising that the states were forced to meet re-
quirements which Severely limited them in the handling of funds
and in the definition of conditions of eligibility for benefits.

To qualify as an approved program the state act must extend
benefits to employees in all establishments of four or more workers,
except in excluded employments. It must provide that payments to
employees be based on the contributions credited to them which
requires separate wage records to each covered employee as well
as separate contributions records for each employer. Contribu-
tions may be used to pay benefits only to eligible persons, as the
state act, subject to federal requirements, defines eligibility.
Persons claiming benefits must be willing and able to work, as
evidenced by thsir being registered with a public employment office,
and the state must operate such offices. Certain grounds for denying
benefits however are excluded; such as refusal to work where a strike
is in progress, or where the conditions and wages are substandard.
There must be provision for hearing v;hen benefits are denied, Pro-
visions for administration must be adequate, and employees must
be employed on a merit basis.

Apart from these requirements the states have a wide discretion
as to coverage for firms smaller than the minimum, the minimum and
maximum size of benefits, the duration of benefits, the use or
non-use of experience ratings in fixing the employer's contribu-
tion, and in adding parallel benefits, such as compensation for
time lost through illness. Once a valid act is passed, the
state receives from the federal treasury the full administrative
costs of both unemployment compensation and the employment ex-
changes. The three tenths of one per cent payroll tax which the
federal government collects is more than sufficient to pay the
costs of administration in all of the states.

Whereas the statutes setting up the system axe passed once
and revised only at intervals, the payment of administrative costs
permits an annual review of state compliance. Budgets m.ust be
submitted in detail, based on the recorded work load and unit
cost per operation, projected into the next fiscal period. Bud-
get requests may be considerably modified before they are approved.
Subsequent expenditure must conform to the approved budget. As
noted, employees in the system must be hired on a merit bases.

This means that the regional representative of Bureau of Ehiploy-v^
ment Security in the Department of Labor, which administers the
federal responsibility under the system, keeps a watchful eye on
the state civil service system as it affects the Division of Un-
employment Compansation and the Employment Service.

The effectiveness of this federal supervision in influencing
the administration of the state act is evident in the de facto
consolidation of the Bnployment Service and the Division of Unem-
ployment Compensation which has been accomplished despite the
refusal of the state legislature to authorize it. The two ^''
divisions have a common head, and common staff services, such as
budget, personnel, training, and statistics and research. That
this overhead structure be consolidated was made a requirement of
federal approval of the state budget some years ago. Consolidation
of the comparable services, once separate at the federal level, pro-
vided the model for these arrangements.

State headquarters for employment security is in Chicago, The
daily work of the organization is conducted in U9 offices in all
parts of the state. Sixteen of these are in Chicago and five in
Cook County outside of Chicago, In those offices outside of Chi-
cago claims for benefits are made by the unemployed and they and
other people register who are seeking jobs. In Chicago benefit
claims are made in one group of offices, while persons who are
registering as applicants for work go to other offices. Some of
these employment offices specialize in particular types of work,
such as manufacturing, professional, administrative or sales
work, while others handle all classes of applicants.

There is some difference of outlook in the two sides of
this program. Unemployment compensation is largely a matter of
law and regulation in which the rights of applicants and the in-
tegrity of the system must be equally protected. Employment
offices on the other hand serve both employers and job- applicants.
Achievement is measured by satisfactory placements, in which men
and jobs are matched, not by compliance with regulations. Com-
pulsory registration may produce indifferent applicants. Placement
personnel, concerned about meeting the needs of employers, may be
unconcerned about enforcing a work test against indifferently
qualified registrants. This split outlook makes for difficult
coordination, and for some friction between people in various
phases of the program.

Nevertheless a very large work load is handled, in placing
people in jobs as well as in paying benefits. In the calendar
year 1956, a monthly average of 67,000 persons received benefits

for an average duration of slightly less than four weeks. About
350,000 persons made application for employment, and about 360,000
placements were made. Benefits paid averaged about 29 dolliita
per week. It might be noted that the average weekly earnings of
employees in manufacturing industry in Illinois, which provides the
bulk of covered employment, was about 89 dollars per week in Feb-
ruary-March, 1957.

All employers of four or more in Illinois ar§ under the system
except in a few exempt industries, principally farming and industries
closely connected with farming.^ This means that about 84,000 em-
ployers are covered, and 2,500,000 employees, out of a labor force
estimated to be about 3,500,000 in March 1957. The benefits paid
in Illinois have a minimum rate of 10 dollars per week and a maxi-
mum of AO dollars. An allowance is now made for dependents, so
rates vary with that factor as well as with the average rate of
earnings. No one may receive benefits for more than 26 weeks out
of any calendar year.

As was noted earlier the administrative supervision given
the state agency is more intimate in this field than in any other
field of federal grants. The payment of all administrative costs
makes it possible to withhold funds not only in general, but from
particular expenditures which are disapproved. The Bureau of Em-
ployment Security has close control over the size of the state
staff, the administrative organization, and the working procedures
used. Because of the sudden fluctuations in the work load which
accompany variations in employment, because of the serious crn-
sequences of any administrative breakdown, the degree of consul-
tation with federal representatives who are persons -^f long exper-
ience is unusually close. Budgeting for state expenses becomes a
part of federal budget procedure. The proposals for state costs
are developed in the states', submitted to the regional offices,
and consolidated by the Department of Labor and submitted to the U.S.
Bureau of the Budget. The Bureau of the Budget permits spokesmen
for the associated state agencies to appear at its hearings on this
item in the Department of Labor budget. The final decision belongs
to Congress, when it acts on the Department's appropriation bill.

Close though the federal controls are in the field of costs
and procedures they have not prevented considerable experimen-
tation with the system of coverage and benefits and the calculation

1. Except for federal workers who have their own system public employees
are n«t covered, nor are employees of charitable agencies. Railroad
workers are covered by a separate system.

of employer contributions. In Illinois as in other states there is
a merit rating system whereby those employers whose employees make
the fewest claims for benefits pay the lowest rates. Those whose
employees are more frequently unemployed pay higher rates. Maximum
possible rates in Illinois are now set at 3.5 per cent of payrolls
and may be as low as 0.25 per cent. This variation from the in-
surance feature of pooled risk has been approved by both Congress
and the state legislatures on the demand of employers.^

Euen the requirement of workseeking which is made of claimants
is cubject to administrative variation. There has been a policy
of requiring those receiving benefits to show that they are ac-
tively seeking work by submitting a record of having called upon
possible employers on their own initiative. Thus in employment
security there is an interesting combination of rigid federal super-
vision over administrative aspects of the program and considerable
freedom of policy making. Congress now permits states with satis-
factory reserves to extend the system to include benefits to persons
who are out of work because of injury or illness th»ugh only one
state Connecticut, currently has such a plan.

In the last session of Congress a long standing dispute over
the adequacy of the budget allowances for state services was re-
solved by providing that once a special reserve fund of 200
millions had been accumulated to protect state systems which were
in danger of insolvency, each state should receive back in federal
grants an amount equal to the three tenths of one per cent which is
collected from the employers in that state. States for which this
is an inadequate allowance may receive additional amounts from the
federal treasury. However, the power of the Bureau of i3iiployment
Security to approve budgets remains. In the last fiscal year, 1956,
Illinois received a refund of 2,U millions for the excess of col-
lections over administrative expenditure, and this sum is to be
applied to the reduction of payroll taxes. The effect of the change
has been to reduce the tax payments of employers rather than to give
the states more freedom in spending for administrative purposes.

2. Of covered employers in Illinois, /tO per cent pay the minimum rate,
another 4.7 per cent pay more than 0,25 per cent and less than 2.7 per
cent, and ten per cent pay the maximum rate of 3.5 per cent of their
payroll.

CHAPTER VII

AGRICULTURE A^D RESOURCE CONSERVATION

A considerable amount of money is made available to state
agricultural colleges, already assisted by small grants under the
Morrill Act, for research and extension work in agriculture. There
are also more recently established grants for research in agricul-
tural marketing services, which go to state departments of agri-
culture and similar agencies which have functions in the agricul-
tural marketing field. Still another aspect of conserving the
nation's resources, are grants to the states for forestry projects
and for wildlife restoration and management.

Somewhat over 12 million dollars per year is distributed among
the states for agricultural experiment work and about 32 millions
for agricultural extension. Allotments for agricultural research
are made on several bases; each of them coming into being with
successive revisions and extensions of the original legislation of
1887. Part of the grant is a flat allotment per state, part is
distr5.buted on ths basis of population and still other parts on
the basis of rural and farm population, respectively. Some of this
money must be matched, and a portion need not be. State expenditure
for agricultural research, however, is considerably in excess of
matching requirements for the amount of federal funds received.
The grants for extension work are on a similar basis to those for
agricultural research. In a revision and consolidation in 1953,
however, Congress provided that the grants actually received by any
state in 1953 should continue unchanged, but that any excess which
might be available above the amount so distributed should be dis-
tributed on the basis of rural and of rural farm population.

Agricultural research and demonstration work is a unique type
of undertaking in the relationships between state and federal gov-
ernment, and in the relationship between government and its citizens.
The development of improved agricultural practices, which was facili-
tated by the original Morrill Act, endowing colleges of agriculture
and the mechanic arts, was furthered when grants were authorized for
state experiment stations. These experiment stations were to under-
take investigations to make agriculture a more efficient and pros-
perous industry. Their primary work has probably been done in the
development of improved varieties of plants and animals and in the
control of pests and diseases, but now encompasees a wide variety of
matters related to agricultural production and distribution. The
experiment stations were set up as units attached to the colleges of
agriculture, with varying adrr.inistrative patterns from state to state.

The relationship between teaching and research work has been close,
and the administrative direction of both college and experiment
stations is often in the same hands.

Agricultural extension work grew out of the efforts of the
colleges and the experiment stations to find a more prompt means
of getting improved methods and materials into general use than the
full time teaching program provided. Agricultural specialists were
stationed in various counties with some form of local sponsorship.
In 1916 this system, through the provision of federal funds, was
extended over the whole country. Thus the extension service with
its state headquarters and its local agents, brought the services
of the college of agriculture and the experiment station to every
part of the state. As in the case of the experiment station, the
administrative head of extension might also be administrative head
of the college of agriculture, which thus had a three fold aspect,
and a staff whose members often had responsibilities in each phase of
the program.

The relationships with local sponsors occasioned some conflict
from the very beginning of this program of federal assistance. In
1921 the American Farm Bureau Federation was formed which brought
into being a national organization uniting state associations, them---
selves federations of the county units which originated as sponsoring
agencies for agricultural work. The Extension Service of the Depart-
ment of Agriculture, then the State Relations service, assisted in
and encouraged this new grouping as an important ally in the extension
program. The Federation grew rapidly during the 192D's, and became
an effective rival of older farm organizations, the National Grange
and the Farmers Union, in many places. In others, as in Illinois,
it occupied the field almost unchallenged. Conflict waa centered
on the complex organizational position of the county agent and his
staff. They were employees of a state agency which received federal
funds and holders of a pro-forma federal appointment, but in some
cases they also received a large part of their salary from the local
sponsoring agency. In working with the farm people of his area,
and in fulfilling his obligations to his sponsoring agency, through whom
he was to reach the population, the county agent was apt to be regarded as
assisting that local agency, a part of a state and national feder-
ation, in its general functions. This relationship between the Farm
Bureau Federation as sponsor and the county agent was by no means
universal. In some states competing organizations were sponsors;
in others there were special county associations, unaffiliated with
similar agencies; in others the county provided public funds to help
pay the expenses of extension in the county. However, in those
places where it existed the relationship of extension agent and county
farm bureau was the target of persistent and unsuccessful attempts

to get Congress to enact a legislative "separation". In a number of
states where such a relationship existed, it has been terminated
either by legislative or administrative action.

This background has been sketched in to indicate the possibilities
of the development of federal control even in a field in which it has
never been regarded as coercive, and in which there has been great
harmony between the state agencies receiving funds and their sup-
porting groups and the federal agency disbursing the funds. Doubtless ,
in response to the criticism of the farm bureau extension tie, the
Secretary of Agriculture has recently ruled that no employee of the
department might belong to, promote, or receive part of his salary
from any organization interested in farm legislation. Since the local
sponsors of the extension agent in Illinois are the county Farm
Bureaus, linked through the Illinois Agricultural Association to.
the Farm Bureau Federation, and since a considerable part of
salaries and office expenses are paid by the local sponsor, this
has forced some readjustments of extension relationships.

It might seem surprising that the county agent, so closely
identified with his locality, is covered by a rule which is issued
by the Secretary of Agriculture to members of his Department. This
is the result, however, of the privileges previously granted to ex-
tension workers. As we have seen they hold nominal federal appoint-
ments, they are under the federal retirement system, they receive the
benefits of the federal employees workmen's compensation act, they
enjoy the franking privilege. As a result of the Secretary's order,
the contributions of local sponsors, which are fixed by an annual
contract between the state extension service and the sponsor, now
go to the University of Illinois. There is therefore no direct
financial relationship between the county agent and the sponsoring
agency in his county.

The procedures for distributing funds for agricultural research
and extension are not unlike those in other fields. Budgets and plans
must be submitted each year, showing proposed expenditures and the
kind of projects they will support. In this process of budgeting
thare is collaboration between state and federal officials which
results in an exchange of experience and a mutual adjustment of pro-
grams. Each year there is a review of the work of the experiment
stations not only from a budgetary but from a substantive standpoint.
In research work, however, the staffs are selected by the state agri-
cultural experiment station, with very little federal supervision or
control. In the extension program, on the other hand, there is some-
what more formal control over the qualifications of personnel appointedi^
Extension workers receive federal appointments as "extension agents",
though without compensation, and their qualifications must be acceptable
to the U. S. extension service. Such persons enjoy the free use of

the mails, or the franking privilege, for their official correspondence,
as does the staff in the state headquarters of the extension service,
and they participate in the federal retirement system.

Resource Conservation Program

Resource conservation grants to the states in fields other
than agriculture, are limited to grants for forest management and for
vjildlife restoration and management. Forest grants have a much longer
history than the wildlife grants. They began with the contribution
to the several states of the sums realized from the sale of the pro-
ducts of national forests within each state. They have since been
supplemented by regular appropriations. Aid is given for forest fire
prevention work, tree planting, and the control of pests and diseases.
Allotments are made by the Forest Service on the basis of the need of
protection in each state with an additional sum to match the proposed
expenditure by the state and by private forest managers. The total
state contribution must equal the proposed federal expenditure. Thus
the state must negotiate in the establishment of its plan and budget
for whatever federal assistance is available, rather than counting
on a fixed sum which it must match by a fixed amount. In such a
negotiation, the federal agency can have a considerable influence
on th? development of the state program. In addition to the control .
of program, there is a control of personnel. The personnel who are
to be employsd on federally assisted projects must m.eet personnel
standards acceptable to the Forest Service. In the state of Illinois
the Division of Forestry, which receives these grants, is a unit within
the State Department of Conservation. As in other federal programs,
there are reports, audits and inspections, to insure compliance with
requirements, and to check the degree of progress,

Financial Assistance for wildlife conservation is a mere recent
development than assistance for forest conservation. In 1937 and
in 1950 respectively, Congress made provision for distributing the
principal part of the revenues from excise taxes on hunting and
fishing equipment to the states for approved fish and wildlife res-
toration and management projects. Projects are supposed to be works of
lasting significance, not merely the expansion of current operations.
They may be surveys of wildlife populations, or ecological studies, or
the acquisition and development of shelter areas. The attached table
2 7 gives some idea of their scope in Illinois in recent years.
Allotments for wildlife projects as apportioned among the states,
half in proportion to their shares cf the land area and half in pro-
portion to their shares of the number of hunting license holders.
The apportioTiment for fish management projects is based -iO per cent
on the ratio which the area of each state including coastal and

Great Lakes waters bear to the total area of all states and 60 per
cent in the ratio which the number of persons holding non-commercial
fishing licenses bear to the total of such persons in all of the
states. States must contribute at least 25 per cent of the cost of
approved projects.

Expenditure of federal funds is on a project basis. Individual
projects are developed and submitted for approval. Once approved,
they are subject tn inspection during the course of their execution.
On their conclusion expenses are subject to audit, and the federal
contribution is then made. In 1956 the federal contribution to
approved projects completed, or under way during the year, was
$463,128.76, which was about one-fifth of all expenditures from the
fish and game fund, which supports the Department of Conservation's
wildlife protaction and management activities.

These contributions, while of limited significance in the
whole state budget, permit the department to undertake a number of
studies on the ecology of game and commercial fish and to complete
a number of shelter areas for waterfowl, for which state funds might
not readily be available. The pressure on state controlled expendi-
ture is to undertake to stock hunting and fishing areas with game
birds and fish and tc maintain an enforcement staff. There is less
support for conserving the rapidly diminishing number of areas in
which the survival of the state's wildlife population is possible,
or for investigations of the conditions of wildlife survival, without
knowledge of which both stocking and regulation are va^'n activities.
Thus the federal participation in financing and project guidance is
welcome to those who are interested in long range conservation.-

The department's professional staff of fish and game biologists
is primarily engaged in the research and development work which is
done with federal support. Although there is no precise specification
of personnel policies in the state agencies which receive aid,
"regulations of Fish and Wildlife Service of the Department of the
Interior, which administers the grants, require that the qualifications
of persons to work on the project be submitted. If they were thought
inadequate to the work to be done presumably the project would not be
approved.

In terms of project development, relations between the state
and federal agencies are friendly. There are complaints by state
fiscal personnel about the accounting and auditing requirements for
the fairly small projects carried on under federal assistance.

Agricultural Marketing Research Program

The agricultural marketing research grants bring the state
Department of Agriculture into relationships with the U. S. Depart-
ment of Agriculture. Grants for this purpose are on a project
basis. The federal government will provide financial assistance for
projects to develop more efficient marketing procedures for agri-
cultural produce. States must match the federal contribution with an
equal sum. Reports are made and future grants will partly depend on
the success with which money previously granted has been used. In
Illinois there have been a variety of projects largely in response
to local demand. Reporting services have been set up for local
livestock markets, through which a considerable amount of livestock
moves to the consumer through local slaughterers without going to
the national markets at all. Egg grading has been pushed, under the
state egg grading law. Growers of fruits have been assisted in
standardizing their grading and packing, and in disposing of frost
damaged fruit. Sweet corn growers shipping to the St. Louis produce
market have been helped in pooling their shipments and in timing
their marketing. This work is done with the informal collaboration
of university marketing specialists and is carried on by the Marketing
Division of the State Department of Agriculture.

Table 25 - VII

Federal Assistance to the University cf Illinois for Agricultural
Research and Extension, Fiscal year ending June 30, 1956

Purpose Total from Federal share
of Federal Grants from general in-" as Per Cent of
Grant Grants nther sources crw.e and grants Total

Agricultural

Experiment 652,059 225,990.91 (3,076,337) 21*20^

Agricultural

Extension 1,351,597 33^,893.00 (2,7^.0,105) ^9.33

TOTALS $ 2,187,913

Source: University of Illinois, Report of the Comptroller, 1956

Table 26 - VII

State and Federal Expenditures for Wildlife Conservation
and Forestry, Fiscal year ending June 30,1956

Expenditures of State Department
of Conservation — ,all activities
except State Parks

I 2,637,421

Department of Conservation Expendi-
tures for operations from Fish
and Game Funds

2,205,740

Fish Division and Gam.e Management
Divisioii Operating expenditures
from Fish and Game Fund

Fish Division and Game Management
Division Federal reimbursements
for fisheries and v;ildlife
restoration projects received
in fiscal year

Federal Grants as per cent of
operating expenses of fish and
game divisions

858, 284 ^*

510,402

59.46^

Source: Department of Finance, 39th Annual Report, 1956
* Dees not include expenses of game propagation division,
enforcement division and departmental general office which
are paid from fish and game fund.

Table 27 - VII

Wildlife Restoration Projects Under Way or Completed During Fiscal

Year Ending June 30, 1956

[Figures to nearest dollars]

Name of Project Federal Share State Share Total

Horseshoe Lake Land Acquisition 147,439

Marshall County Refuge and Re-

cretional Area Acquisition 178,435

Chain-0-Lakes Wildlife Refuge

Acquisition Project 7,952

Horseshoe Lake Development 6,865

State of minors Coonerative Wild-
life Restoration Development 47,235

Union County Refuge Development 3,355

Mermet Refuge Development 6,445

Shawnee Cooperative Wildlife

Habitat Development 5,426

Illinois Pheasant Research 7,794

Rabbit Management in Illinois 3,666

Illinois Waterfowl Survey 15,748

Illinois Population Studies and

trends on small upland game 10,522 3,507 14,030

Wide-Roy Corn Fields as Wild-
life Habitat 5,556 1,852 7,408

Wildlife Management Coordination 16,684 5,723 22,408

49,146

196,585

59,478

237,914

2,650

10,603

2,288

9,154

15,745

62,980

1,118

4,473

2,148

8,593

1,808

7,234

2,596

10,391

1,222

4,888

5,249

20,998

GRAND TOTAL $ 463,128 t 154,536 I 617,665

Percent 75$6 25^ 100^

Source: Compiled by Department of Conservation

Table 28 - VII

Grants for Agricultural Marketing Services, Fiscal year ending

June 30, 1956

Federal Share as
Tntal Federal Per Cent of Total

Division of Markets ^ *

Total expenditure 125, -i03 19,165 15.28^

State Department of
Agriculture
Total expenditure 6,9^2,094-

Source: Illinois Department of Finance, Annual Report. 1956

CHAPTER VIII

HOUSING, SLLM CLEARANCE, URBAN REDEVELOPMENT
AND CIVIL DEFENSE

The only reason for treating civil defense and slum clearance
together is that in one manner or another they concern city govern-
ment to a greater extent than they directly concern any other govern-
mental unit. Public housing is related to slum clearance and urban
redevelopment insofar as the clearance of an equivalent area of
slums is one of the requirements of the federal housing program and
the provision of sites for public housing may be one of the results
of urban redevelopment operations.

Aid for public housing is the oldest of these forms of federal
assistance to local governments, beginning as one of the public works
projects by which the construction industry was stimulated by the
Public Works Administration after 1933. The first specific statu-
tory authorization for a federally aided public housing program
was the Housing Act of 1937. This act authorized assistance to
local housing authorities for the construction and maintenance of
low cost rental housing for low income families, rather than direct
construction and lease to local authorities which had been the policy
of the Public Works Administration. Aid is given both in the form of
low interest loans, if needed by the local authority, to cover the
costs of site acquisition and construction, and in the form of annual
subsidy, set to cover the difference between income from rentals and
the costs of operation and amortization. Projects are tax exempt,
except as the local authority may agree to make some payment in lieu
of taxes, so that there is a partial local subsidy. The federal
payment is fixed in an agreement in the form of a contract between
the local public housing authority and the United States Housing
Administration,

The public housing act requires the setting up of local housing
authorities as the agencies through which the construction and
operation of federally aided projects will be executed. Housing
authorities are corporate bodies with statutory powers independent
of those of the local governments, cities or counties, in whose areas
they work. Their bonds are secured by their own revenues from rents
and federal aid. Their principal tie with local government is that
their governing boards are appointed by the local executive. How-
ever, since 1953 the Housing Act has required express approval by
the local governing authorities of each request for assistance.
Despite this the consequences of federal aid in the housing field
have been the creation of still another semi- autonomous unit of
local government.

Applications for aid for low rent housing projects must be
accompanied by a survey of housing accommodations in the area
which establishes both the need for low rent housing to provide
decent quarters for families who are forced by low incomes to
live in sub-standard conditions, and the inability of the local
governments to finance such projects without assistance. The de-
tailed project specifications must grow out of the need as demon-
strated, in terms of the number of units, the type of accommodations,
the proposed rental level, et cetera. There is particular concern
that the site be suitable in its physical characteristics and in
its appropriateness for residential area. Once project specifications
are approved, the federal agency will provide temporary financing
in the form of notes, if this is necessary to cover the costs of
acquiring the site, drawing detailed plans and specifications, and
carrying the project until bonds can be issued to cover construction
costs. The federal government will lend money on the bonds of the
authority, if the authority is unable to borrow more advantageously
in the general market.

Bonds are retired from the rental income and annual subsidy from
the government. The annual subsidy is pledged for this purpose, and
that is why the contract with the local authority is an important
document. It is a guarantee to investors of the adequacy of revenues
to amortize the bonds which they hold.

Federal cooperation with the local housing authorities is close
during the planning stage and after it. All of the architectural
specifications for the project must be acceptable as well as its
general suitability to the needs of the people it will serve.
Standard specifications have been issued, and there is some con-
troversy as to whether these are helpful or hurtful to local authori-
ties in getting sound building at minimum cost. Costs must be in a
reasonable range, and contracts must be let under competitive bidding.
Subsequent to construction, operation must be satisfactory if the
federal subsidy is to continue. One of the most important conditions
is that tenants must not be persons whose incomes are sufficient
to permit them to pay rental charges in private housing. The
eligibility of existing tenants therefore must be periodically re-
examined, and appropriate eligibility standards must be set for
newcomers.. Adequate accommodations must be provided for all racial
groups, in proportion to their needs, if the authority follows a
segregation policy.

This program resulted in extensive construction in the period
between 1937 and 194-2. In the latter years most construction was
designated as defense construction under wartime authorizations,
and income was not a primary factor in tenant selection. After the
war, a gradual readjustment to the policy of low-rent housing was made.

Slum clearance and urban redevelopment is a later stage of
federal interest in urban construction. The original housing act
required the destruction of an equivalent number of substandard
dwellings for each unit of federally aided housing, as though the
existence of these dwellings rather than their occupancy was the
primary evil. The Housing Act of 194-9 which was a very conscientious
effort at a long range program contained a broader authority for
federal participation to enable large tracts in blighted areas to
be acquired from present owners so that they might be redeveloped
for more appropriate uses by private as well as governmental de-
velopers. This emphasis on redevelopment and the prevention of
blight was re-emphasized and extended in the Housing Act of 195A.
In place of the operations subsidy provided for housing, the federal
government absorbs part of the difference between the costs of ac-
quiring sites and the sum which could be realized from their resale
to private developers. The local government which sponsored the
project is also required to provide one-third of the net cost. Ap-
propriate governmental uses for redeveloped land include public
housing projects and buildings for governmental uses, as well as
the creation of open spaces and plazas.

Other Municipal Aid Programs

In addition to the well publicized programs for public housing
and urban renewal, there are several federal programs which provide
assistance particularly to smaller cities in several phases cf
municipal operations. These are aid for sewage treatment facilities,
loans for the construction of water supply facilities when these are
planned as part of a comprehensive improvement of a small watershed,
and grants for public works planning and for general city planning.
All are of relatively recent origin in their present form, though they
all had their counterparts in the extensive system of aid for local
public works set up in the depression period.

The assistance given for the construction of sewage treatment
facilities is a part of the Water Pollution Control Program which
has been in existence for some years. Grants are available to in-
dividual cities for up to 30-;.per cent of the cost of the plant, or
250,000 dollars, whichever is the smaller. Fifty millions of dollars
were available for this purpose in the fiscal year 1957. Applications
from cities and other local units must be approved by the state water
pollution control agency before they are transmitted to the U. S.
Public Health Service, which administers the grants for the federal
government. At present eligibility for such assistance depends both
on the financial ability of the local unit to complete the project
with its own resources and on the problem which the lack of sewage
treatment creates on interstate and international waterways.

Closely related to this matter is that of water supply, and here
also, assistance to the local unit is subsidiary to the achievement
of a general program. Cities and other local governments which are
responsible for water supply may ask to be included in the plans for
the development of plans for erosion control and flood prevention in
small watersheds which receive federal technical and financial assis-
tance under the watershed protection and flood prevention act ad-
ministered by the Soil Conservation Service of the U. S. Department
of Agriculture, (There is similar provision in the Rivers and Harbors
Act of 1956 for making allowance for the capacity needed for municipal
water supply in the building of dams for flood control purposes.)
All of the costs of a water storage structure for municipal water
supply must be met by the municipality, but it benefits in that the
general work of the watershed which assists in the conservation of
water is done without cost to the municipality. Further long term
low interest financing is available to municipal as to other project
participants through the Farmer's Home Administration. Is no other-pre-
ject sponsor is available the municipality may be the sponsor. The
local sponsor pays all land easement and right of way costs, but the
costs of flood prevention facilities are borne by the federal govern-
ment. These are multiple purpose projects, intended to serve the
purpose of flood control, soil conservation, and the supply of water
for irrigation purposes. As in the case of applications for grants
for sewage treatment facilities the application must be directed
through a state agency concerned with soil conservation which must
approve it.

The planning grants are both administered through the Housing
and Home Finance Agency. One provides a rather small sum of money
nationally of which no more than 75,000 dollars may go to any state
for the advance planning of necessary public works. This grant- re-
sults from the difficulties which smaller cities encounter in the
planning of works to be carried out with bond issue funds because
they do not have full time engineering staffs and often have neither
money, nor the authority to spend it, for the pl.anning and design of
public works for which no bond issue authorization has yet been made.
EiTiphasis is put on projects which will soon be put under construction
and those which are particularly needed in the locality. This public
works planning is intended entirely for specific construction pro-
jects, and money available for it cannot be used for general city
planning.

On the other hand, under another act the Housing and Home
Finance Administration may make planning grants for the preparation
of general city plans, or phases of city plans, which will serve
the purpose of guiding long range urban development. As in the
public works planning grants, assistance is available primarily to

small municipalities, not over 25,000 under the statute. Grants
are limited to 50 per cent of the cost. Under present policy 4-0
per cent of the one million dollars currently appropriated are to
go to state planning agencies (which provide services to local units),
UO per cent to regional planning agencies in metropolitan areas, and
20 per cent to regional planning in other areas. The highest priority
proposals are those which propose to assist in the correction or
prevention of blight, the replanning of area destroyed by disaster
and plans to reduce urban vulnerability.

Finally, assistance is also available to various local units
in the form of loans for the construction of needed pjblic works when
the local units concerned cannot sell their bonds at reasonable in-
terest rates. The interest rate on such loans is set above the going
federal rate. Like the public works planning grants this form of
assistance is administered by the Community Facilities division of
the Housing and Home Finance Agency. The grants for general Urban
planning are administered by the Division of Slum Clearance and Urban
Redevelopment of the same agency.

In this program as in low-rent housing, applications for
assistance are on a project basis. They are prepared by local
agencies, which by state law are authorized as redevelopment agencies.
These bodies have the same corporate status as local housing authori-
ties. In Illinois there is such an agency, the Redevelopment Com-
mission, only in Chicago. Members are appointed by the Mayor with con-
sent of the council. As in the case of housing, the application must
be backed by a careful survey of urban blight, and the preparation of
a plan for checking it by redevelopment. The local government con-
cerned must approve the plan which is submitted. If the Division of
Community Services and Urban Renewal of the Housing and Home Finance
Administration approves it, a contract is entered in between the
agency and the redevelopment commission. As in housing there are
regional staffs available for detailed planning and consultation,
and there is close collaboration in developing the details of the
projects submitted. However aid here is in the form of a capital
grant to cover part of the costs of land acquisition and redevelopment.
The federal influence on the project ends with the carrying out of
whatever site development is necessary and the negotiation of agree-
ments for private development. Although there has been considerable
planning for redevelopment in Chicago, as yet no formal proposals
have been submitted by the Redevelopment Commission.

Civil Defense

In contrast to housing and urban redevelopment civil defense
has so far accounted for very small expenditures by federal or by
state and local government. Mrney is available from federal grants
for the acquisition of essential items of equipment for use in the
case of an emergency. These are mostly standard item.s which would
be used in the normal local functions of health, police and fire
protection such as pumpers, radio cortmunicaticns equipment, high
pressure hose, and the like. The law under which federal aid is
given requires that the state and its local subdivisions take pri-
mary responsibility for local civil defense, and that local requests
be funneled through a state agency. The federal grants are allocated
among the states on the basis of state population, but unused funds
may be allocated to other states by the federal administrators.

In Illinois there is a State Civil Defense Agency set up by
statute which has headquarters in Chicago. The Federa^^ Civil Defense
Administration is a separate agency reporting to the President directly,
set up by a statute of 1950. The relations of these bodies with
each other and with local units are on a voluntary basis, the prin-
cipal controls lying in the disbursement of funds. The grants made
available m.ust be matched by state and local funds. As indicated,
most of the expenditure in Illinois has been for fire-fighting equip-
ment and for communications equipment to supplement the inadequate
resources of local fire and police departments. There is no super-
vision over the use of such equipment once it is acquired. . There is
no m.oney available for shelters or other types of construction and no
money has been made available to the states for the stockpiling of
medical equipment and supplies.

Natural Disaster Relief

Since 1950 there has been a law authorizing federal aid to locali-
ties affected by major natural disasters. Since 1953 this assistance
has been provided through the Federal Civil Defense Administration.
The help given may com.e from any appropriate agency of the federal
government, but the F. C. D. A. is the coordinating agency. The
President has an emergency fund for assistance to be used at his
discretion. Grants of surplus com.modities and surplus property such
as blankets and cots are also authorized. The purpose of such assis-
tance is the relief of suffering and the restoration of essential
local public facilities. Since the state ordinarily designates its
civil defense agency as the agency for natural disaster relief, the
present arrangement uses a coordinated federal state local adminis-
trative arrangement. In this program the governor is supposed to
couple his request for federal assistance with an assurance that sub-
stantial help will also be provided by state government.

Table 29 - VIII

Sanitary Water Board — Proposed and Certified Ftiorities as of
May 31, 1957 for Constrvction Grants under Water Pollution

Control Act

Priority Project

Number Applicant Grant Offered

&
1-26 Yorkville-Bristol

Sanitary District 62,000.00

2-55 Ottawa 250,000.00

A-22 Lake Villa 30,/^20,00

5-11 Effingham I37,08ii;.70

6-^6 Farmer City 5A,060.00

7-32 Lansing 219,3^5.60

8-/iO Watseka 131, 194-. 50

9-51 Manteno 76,873.00

12-10 Bourbonnais 66,000.00

13-5A O'Fallon 37,500.00

U-28 Charleston 12^,500.00

16-31 Mokena 69,308.70

17-59 Wood Dale 95,668.32

18-17 Danville Sanitary Dis-

trict 250,000.00

Total encumbered 1,603,95/^.82

Source: Illinois Department of FUblic Health, Sanitary Water
Board

CHAPTER IX
THE IMPACT OF FEDERAL AID UPON ILLINOIS GOVERTIAO^T A^D FINANCE

The federal aid program has been subjected to a steady fire of
criticism for many years, especially from the organizations inter-
ested in the size of governmental expenditures and the tax burden
at the state and national level. One m.ajor complaint has been that
the influence exerted over state and local governments through the
grant system has improperly extended the power of the national gov-
ernment. Another complaint has been that the more prosperous states
are being unduly taxed for the benefit of the least prosperous.
Still another criticism is that grants encourage expenditure, since
the governm.ents who spend the money do not have to raise the taxes.
Despite this persistent criticism from ordinarily influential sources,
Congress has continued to extend the range and number of aided ac-
tivities, and state legislatures have continued to accept such aid.

It would seem that persistence in the face of criticism indi-
cates that the grant program rests on more fundamental ground than
the predilection of politicians to spend money. The justifications
ordinarily given for the grant system are not very informative how-
ever, since few grants conform except partially to the case for
grants in aid that is ordinarily given. The case rests on the
general argument that grants enable the inherent limitations of
state or local governments as units for administering certain pro-
grams to be overcom.e, without the transfer of the aided function to
a unit of larger area and resources.

In this connection it is often said that grants serve an equal-
izing purpose. They enable a necessary activity to be carried on
more uniformly over a nation or a state than it could be carried on
if it were suppjorted only by the revenues of the lesser unit. Such
equalizing purpose may be seen in the school finance programs of
the several states which vary state aid according to local tax re-
sources. It is found in federal grants only to a very partial de-
gree; there are very few in which funds are distributed primarily
on the basis of equalizing resources, though this is a more impor-
tant consideration than it was at one tim.e.

It is also said that grants originated to enable a progran with
national implications to be carried out by the states, without the
national interest in it being subm.erged. Perhaps the highway program
is nearest thf s particular rationale, but only after UO years has a
highway network of intensive use been identified which is to be
built under reasonably uniform engineering and traffic standards from
one end of the country to another.

The greater resources of the national treasury with its more

flexible system of taxes and tax administration are often cited as
a reason for federal grants. Certainly these resources are of in-
terest to those who find their hopes for governmental action dimmed
by the limitations of state treasuries. Federal grants provide for
only two of the several heavy objects of state expenditure, namely,
highways and public assistance. The public schools, the care of the
mentally ill, higher education, which for all of the states taken to-
gether represent almost three times the cost of public welfare, re-
ceive only token federal assistance. Block grants, for unspecified
purposes, would better support state finance.

It is said that federal grants stimulate state action
in fields which otherwise would be neglected. This is certainly true
of some of them; this is the only explanation for the rather small
sums available for forestry work, wildlife conservation, child wel-
fare services, and the larger, but still modest grants for public
health. None of these fields of expenditure represent an extremely
heavy charge on state treasuries; the national interest in these
is no more clear cut than in some other fields of state or local
activity such as collection of vital statistics. In a number of
aided fields such as highways, public assistance, agricultural ex-
tension services, some states had very advanced programs before
federal aid was available.

There is therefore no unifying principle behind the present
grant system, and this has troubled some critics. If equalization
were the primary principle then it would be hard to justify grants
to states with large resources, even though these may be a smaller
proportion of state expenditure for the wealthy than for the poorer
states. If national interest is the most important consideration,
then few expenditures could be more important than those for educ ation,
since the abilities and skills of our population are the most im-
portant resource we have. If minimizing the interference with state
independence were of great significance, then money could be made
available without the considerable restraints which accompany many
existing programs. In some of the aided fields direct national
administration would seem to be a simpla: matter than using grants as
a means of controlling state administrations.

The Political Origin of the Grant Program

In the opening section of this study it was indicated that for
most of the population federal and state governments are alternate
means of securing the goals sought through governmental action,
rather than the object of conflicting loyalties, as they were for
General Lee. Not everyone regards them as of coordinate value
however. An often heard argument is that state governments are

closer to the people than is the national government. In a purely
spatial sense this is obviously true - state capitals are generally
closer than Washington to most of us. It is by no means obvious
however that state governments are any more responsive to stirrings
among the population than is Washington. Members of the House of
Representatives are at least as close to the people in their con-
stituencies es are the members of state legislatures; certainly
more of the population know the names of members of Congress and
how to reach them. The use of the national government may therefore
be quite as natural to the great bulk of the population as the use
of state government.

Provisions for grants reflect less a consistent difference
in the capacity of state and national government than they do the
diversity of political life in the United States, where many dif-
ferent goals compete for public support, and find different degrees
of acceptance among representative agencies at various levels. What-
ever the legal dependence of cities on state government, the of-
ficials of many municipalities find it easier to get assistance in
dealing with what to them are problems in Washington than in their
state capitals. The friends of conservation policies, whether wild-
life, land, or water, seem to find it easier to get support in
Washington than in their state capitals. It is interesting that
the federal-aid highway program, and the vocational education grant
program began at a time (1916) when states were relatively unburdened
with expenditure. The battle for women's suffrage was won in Wash-
ington, when constitutionally speaking, it could just as well have
been won in the states.

On the other hand, many who oppose the extension of governmental
responsibility into new areas, and who oppose increased tax burdens,
seem to find the state capital more sympathetic than Congress or the
White House, In this situation, each group with a political objective
pursues it through that government which seems to offer the best
opportunity for gaining its purpose. When the result of the con-
flict is a federal aid program, rather than exclusive control and
financing by either national or state government, a much greater
diversity of program and procedure is possible than would other-
wise come about. This very diversity undoubtedly corresponds to
the alliances of diverse interests which support most federal-aid
legislation: financial support and seme sort of national standard
are provided, but there is considerable room for supporting groups
to persue different policies.

This factor of diversity of interest and organization among the
politically active population, which is very evident in the great
variety of conditions under which grants are extended, limits the
possibilities of dictation in the federal grant system even when
the states are quite dependent on the grants which they receive.

In none of the grant programs is there enough support for a completely
uniform federal policy to make it possible to lay down one. Grants
provide a means to influence state policy without dictating it.
They are a potential incentive to undertake some activities rather
than others. The various requirements which we have examined in de-
tail in earlier sections are limits on state action. Nevertheless
the appearance of limitation cannot be taken too seriously. At the
point at which federal requirements deviate m.ost sharply from the
current tendencies of state policy, the grant administering agency
is apt to find that those who support it are split and that it is
on insecure ground.

An example of the concurrence rather than the opposition of state
and federal policy trends is provided by public assistance, which
has been the object of bitter criticism in many states. The char-
acteristics which seem to occasion criticism in state legislatures —
the combination of the ruthless assessment of resources of applicants,
and of insistence that need, when determined, must be provided for
whatever the personal shortcomings of the needy — were fundamental
principles of the original Social Security Act. The Illinois legis-
lature has been restive under these restrictions, and there has been
a stream of bills over the years to exempt a portion of income or
property from the computation of need, and on the other hand to extend
to the close relatives of the needy responsibility for their support.
The secrecy of relief rolls was also an issue on which Washington and
state capitals were apt to be in opposition. Many said that the
possibility of public disclosure would discourage fraud. In contrast
the policy of secrecy was based on the protection of the person aided,
a fundamental principle of the Social Security Act,

In all of these respects and others. Congress has modified the
original Social Security Act so that the states are free to change
their policies. The names and addresses of persons receiving aid,
though not other information about them, nay now be a public record and
is in Illinois and other states. States are required under the Aid to
Dependent Children Program, to inform the prosecuting authorities of
non-support by delinquent fathers, or other responsible persons.
The 1955 amendments to the Social Security Act permit the states to
ignore the first 50 dollars of income per month in computing need
under the Blind Age Assistance program. The new amendments also
stress the purpose of the Assistance programs to assist persons to
become self-supporting, already an active concern in the states.
Illinois has for some time followed an administrative policy of re-
quiring apparently employable persons on the assistance programs to
seek work and of encouraging mothers receiving aid for dependent chil-
dren to seek employment and make provisions for care of their children
during the working day.

Even when statutory requirements are very exacting there is
considerable room for variation of policy and procedure by the
states. The statutes do not give a sure answer as to which of the
many miles of the primary road system should be reconstructed from
available funds, nor to what standards. They do not indicate what
the minimum necessities are which the'.states are to provide for those
receiving public assistance. Neither federal statute nor federal adminis-
trative regulation determines how strenuous the search for work must
be if a worker is to continue to receive unemployment compensation
benefits.

The agencies which administer grants are in a position to in-
fluence state action in these matters. They can discuss adminis-
trative policies when budgets are presented, and they review state
activity for compliance with regulations. They make inspection trips
and audits and they participate in conferences and training sessions
with state personnel. The federal officials axe more detached from
the immediate operation of state politics than are state officials and
they are familiar with conditions and policies in other places.
Therefore, they have a different perspective in all of these op-
portunities to influence state administrative policies.

However, the state officials are not simply blotting paper to
absorb federal influence. They must live within the limits of
state politics; they are responsible to the legislature, the governor,
the courts and ultimately to the public. In a public contest, when
federal and state policies are in conflict, the federal officials are
likely to come off second best. Senators and Representatives from
Illinois will carry the state's case to Washington, if they dis-
approve of the federal policy. Governors are powerful influences
in their party's councils, nationally as well as in their state.
Finally the effectiveness of the federal programs depends upon state
participation in it. If aid is withdrawn, if the state administration
is estranged and uncooperative, then the effectiveness of the federal
program is blunted.

The most marked impression that one carries away from a review
of federal-state relations under the grant program is that cooperation
is more evident than competition or coercion. There is no nice di-
vision which can be made between areas of state and federal action;
ths range of overlapping interest is wide. The grant aid device enables
both to occupy areasof action with less conflict 2nd with more adequate
coverage than might be the case if there were not such a motive
for coordination.

Fednral Grants and State Expenditures and Taxation

The fiscal significance of grants-in-aid is a matter of con-
siderable controversy. We have shown in the first section of this
study that there has been a stecdy increase in the relative share
which grants from the federal government constitute of the total
revenue of Illinois. They are not so large a share however that it
is inconceivable that the state could not provide services on some-
what the present scale without such aid. But to continue services
without federal grants would mean a considerable increase in the
amount of revenue which the state government itself must raise. It
would appear that most people in elective office in state government,
not to mention those who administer the aided programs, would just
as soon not face the difficulties of overcoming the varied sources
of resistance to increases in established taxes, or to the imposition
of new ones, with or without constitutional amendment. In Illinois
the question of federal grants or no federal grants is not an absolute
question of resources, but of which government, with its variously
organized constituencies, is willing to impese the burdens which the
provision of services requires. In the struggle over federal or
state financing, who pays the bill partly depends on which govern-
ment levies the taxes and this is always a point of dispute.

Nevertheless it is often said that if the Illinois treasury
were to receive all of the federal tax receipts collected in
Illinois which now go to provide federal aid in one state or another,
Illinois would be well able to finance its own activities out of
its ov;n income. It is not as simple as that. The repeal of all
federal taxes would not mean a corresponding direct benefit to the
treasury of Illinois. With the exception of excise taxes such as
the taxes on liquor, cigaretteSj gasoline, motor vehicles and parts,
the state and federal government do not occupy the same revenue
fields. The state cannot at the present time duplicate the federal
yield from corporate and personal income taxes, nor could it easily
do so if it had the (state) constitutional authority to levy these
taxes. You cannot collect taxes within a limited area like Illinois
in the same thorough way that you can on a national scale. Even
increased excise taxes on gasoline and liquor (to replace the federal
levy, if the federal levy were abandoned) might be resisted within
the state because of the competition with surrounding states which
might not increase their rates. Only to a limited extent, therefore,
could the state of Illinois collect the sums that the federal govern-
ment now yields, if the federal government were to withdraw in favor
of the state governments.

Part of the opposition to federal grants rests on the belief
that they contribute to a general increase in governmental expenditure.
State capitals are regarded as either more reluctant or less able
to raise and spend than Washington. It is true that the history

of a number of grants suggests that those who proposed them were
able to get more attention in Washington than they were in state
capitals. In most cases these were smaller grants, of which those
for forest management and child welfare services are typical. A
more recent example is the grants to local communities for sewage
treatment facilities to reduce water pollution. It can scarcely
be argued that the states could not raise the sums which are con-
tributed from their own resources, even though it meant cutting
some other object of expenditure. On the other hand, if the control
of stream pollution is important and the state legislatures are
unwilling to divert some state expenditure to assistance to local
communities to prevent it, it would be very doctrinaire to say that
the increase of federal expenditure is a net evil. Government is an
instrument for doing what people want done. It is vain to insist
on an a priori division of functions if the people who control
the government will not accept it. If federal expenditures are to
be cut, the various grant-in-aid programs will stand up very well in
any listing of federal expenditures in order of importance.

It is by no means clear that if federal grants were eliminated,
the net total of government expenditure would be cut. The present
situation, which permits state governments to spend without the
unpleasant necessity of taxing to meet the whole total of expenditure,
enables the elected and appointed officials of state government to
avoid some unpleasant decisions. Exposed to the full demand for
service, it is quite possible that they would find it easier to raise
taxes than to cut services. Taxes were raised drastically in the
very depths of depression to finance depression born responsibilities.
It is here that whatever equalizing factors operate in the distri-
bution of federal grants make their contribution. If Illinois
could make up the 18 per cent of revenue which federal aid represents,
it would not be so easy for Mississippi to make up 26 per cent. The
net gain for the nation is very doubtful if relatively wealthy states
maintain their expenditures out of their own revenues, but poor
states cut essential services because their revenue is inadequate.
The children of Mississippi are the future citizens of Michigan,
Illinois, New York and California.

State Fiscal Control and Federal- Aid Funds

Another criticism of grants in their fiscal aspect is that
grants represent an arbitrary element in state finance, not subject
to control by the state government itself. It is apparent that
difficulties occur in the development of a financial program
when a portion of the revenues and a portion of the expenditures
are outside the control of the budgeting and appropriating authori-
ties.

There are a few federal aids such as the various grants for
agricultural extension and research and the annual grants t-^ land
grant colleges which are continuous and automatic, being varied
only occasionally as Congress Increases them or indicates additional
purposes for which money is made available. By contrast grants for
public assistance are "open-ended"; Congress reimburses the states
for grants to eligible persons in approved programs up tn a stated
fraction of such expenditure per person. So far the full sum for
which the federal government has assumed responsibility has always
been available. In other aid programs the level of support is un-
predictable and may vary sharply. Such has been the case in public
health where Congress has created new categories for which aid is to
be given at one time and thereafter has cut appropriations for these
purposes sharply. Grants for highway construction have varied up-
ward and downward with depression and war and fear of inflation.
Currently they are at a level which is almost fantastic in com-
parison with the expenditures of earlier years. Probably the most
pronounced swings have been in the grants for low rent public
housing which have been in and out of favor almost in a four year
cycle.

These fluctuations are certainly embarrassing to state govern-
ments. Staffs may be built up in such a program as veneral disease
control and ccmmitments undertaken to the local governments which are
participating only to be reduced at about the time effective work
is being done. In such a program as public health the variations
may be a small part of the whole expenditure and the entire staff
and facilities can be transferred to other projects; but fluctua-
tions in federal aid are still wasteful and disheartening. Whether
they represent a problem in fiscal control is another question.

Fiscal control serves a variety of purposes, Ftremost in
the minds of most people who are concerned with it is the achieve-
ment of a budgetary balance, avoiding expenditures in excess of
income, to a lesser extent avoiding treasury surpluses which serve
no useful purpose. Such a balance is required by the Illinois
Constitution which gives a very limited borrowing authority to
state government. From this point of view possible fluctuations in
the level of federal grants are not a problem. They are earmarked
for particular services and if they vary, those services vary and
not other parts of the budget. The procedure in Illinois is to
include projected expenditures from federal grants in the appropria-
tions limits for the agencies receiving them so that the total rif
appropriation bills is very close to the total of legally authorized
expenditure. However, should there be increases in federal grants
above those anticipated at the beginning of the biennium, agencies
can spend such moneys even though the appropriation does not cover
them. No appropriation is a guarantee that money will be available

to cover the expenditure authorized, and if federal grants are less
than expected the expenditure will be cut. From this standpoint
federal grants have little relationship to the achievement of a
budgetary balance. They can be estimated as can other revenues, but
if they are below expectations expenditure must be cut. By and
large the large federal grants are in fields where it is feasible
to cut expenditure, either by postponing expenditure, as in high-
way construction, or by reducing the grants to needy persons below
the level which was previously thought tolerable, as in public
assistance. If such fixed cost programs as hospital operations or
education depended substantially on federal grants that would be
another story.

A second purpose which should be achieved by budgeting is a
systematic and defensible distribution of available income among
the competing objects of expenditure. This is in the last analysis
a pclitical decision; it is a question of what people want in return
for the income which government takes from them. The budget decision
can better be made if adequate information is available and a large
part of the justification of executive budget procedure is that it
provides such information. It is at this point that there may be
a temptation to shift objects of expenditure because some expendi-
tures carry a prize in the form of additional federal money and
others do not. If this were what happens, then one should expect
to find the large state expenditures in the fields in which federal
aid is provided. It is true that some of the largest fields of
state expenditures receive the largest matching federal grants,
public assistance and highway construction in particular. However,
there are fields of comparable magnitude of expenditure, state aid
to public elem.entary and secondary education, higher education, and
the treatment of mental diseases, in which federal aid is wholly
nominal. The proportion of federal to state expenditure in public
health is as large as it is in any other activity, but public health
is a relatively modest cost in a state budget of over two billions
for the 70th Biennium. It is probably true that in relatively poor
states, the temptation to maximize federal grants by maximizing
matching state expenditure is strong, but in a wealthy state like
Illinois after the maximum amounts have been set aside for federal
grants, there is still adequate prospective income to distribute
among other purposes. Nor does the state necessarily match every
federal grant to the maximum am.ount if there is little demand for a
particular grant aided service. For several years the state has
left to local communities the burden of matching federal grants for
airport and hospital construction.

100

A third purpose which should be achieved by fiscal control is
the avoidance of waste in expenditure. It is one of the advantages
of adequate budgeting and accounting that the expenditure of funds
in excess of authorization and expenditure excessive for value re-
ceived can be exposed for legislative and public criticism. In this
respect federal grants would seem to transgress many of the canons of
fiscal responsibility. The budget office and the legislature exer-
cise no control over their availability and none over their expendi-
ture despite the formalities of inclusion in the budget estimates
of income and of appropriation. The centralized accounting service
of the Department of Finance does keep a record of income expenditure
under federal grants and so the informational aspect of control is
preserved.

The controls exercised by the grant administering agencies are
probably more than adequate substitutes for state budgeting and
appropriations control however. Budgets are made up for aided
activities, fiscal and program reports must be made. There are
continuous inspections of activities in progress, and regular field
audits to verify financial statem.ents and insure compliance with
prescribed policy and procedure. Thus fiscal irresponsibility in
the narrowest sense is avoided. Efficiency in the sense of the re-
turn for the money is probably better achieved by the federal con-
trols than by those of state financial management since the per-
sonnel of the federal agency are specialists in the various aided
services and in a better position to know whether expenditure is
reasonable in relation to work load than are the state budget ex-
aminers and auditors who cannot be specialists in service as well
as in fiscal control.

The fourth object of fiscal control is the management of expendi-
ture after appropriation to avoid "deficits and the waste which may be
occasioned by unchanged expenditure despite changed needs for services.
A budget and an appropriations act are little more than a prophecy
both with respect to the anticipated level of expenditure and with
respect to expected income. Deficits may occur even if expenditure
is well within appropriation limits, and the work load of state
agencies may change sharply either up or down. One of the achieve-
ments of central fiscal management in Illinois has been the setting
up of accounting services which provide reliable records of the rate
of expenditure and permit changes on spending patterns to be imposed
administratively when conditions require them. Such changes are
usually downward, but the responsible officers may authorize a rate
in excess of that anticipated if they are willing to recommend a de-
ficiency appropriation at the next session. In this respect the
existence of federal grants is only an additional contingency which
may modify the states' fiscal prospects during the course of the two
year fiscal period between legislative sessions. As long as the
accounting controls are working, the rate of expenditure under
federal grants can be known and controlled and state matching ex-
penditures adjusted where possible.

101

The final question which may be raised is the effect of federal
grants upon the state's funding system. Since funds control all
budgeting, appropriation, and accounting procedure, being available
only for legally specified purposes, their multiplication compli-
cates the procedural aspects of all fiscal operations, and makes
the resulting financial statements and reports hard to understand
by anyone not experienced in the fund system. To achieve the
appropriate segregation of aid funds which are limited to specified
purposes they are handled as special funds, from which transfers may
be made to the General Revenue or other funds to cover expenditures
under appropriation acts. As in some other aspects of this question,
grants are only one of the factors which complicate the state fund
system. It is extended steadily each year to include a greater
number of funds, and federal aid funds are a minority of the total
number. All that can be said is that the mechanics of accounting
and reporting are not insurmountable and that the executive officers
and legislators concerned are able to find their way through the
maze even if the ordinary citizen is confused by it.

What is more important than the multiplication of funds in
Illinois in confusing the fiscal picture is the virtual immunity
of the elected administrative officers other than the governor from
the central system of budgeting and of accounting and auditing con-
trol. These officers do not need to justify their expenditure in
budget requests as do the agencies under the governor, there is no
audit of their expenditures by the Department of Finance, and they
make only such reports as to the state of fund and appropriation
balances as they choose to make. Furthermore, they are not under
any administrative control as to the rate of expenditure and they
may spend up to the full limit of their appropriations without re-
gard to the effect of this spending on any other state operation
whatever. Alongside this omission the exclusion of federal funds
from some of the aspects of fiscal control is a very small matter.

The conclusion is that the existence of uncontrolled
pockets of income and expenditure may contravene the formal fiscal
principles of public fiscal management, the practical effect is not
to embarrass the system of state control which is subject to numer-
ous unpredictable contingencies, nor to permit careless and uncon-
sidered expenditure. What is lost in state scrutiny is more than
made up by the system of control by federal agencies which administer
the grants. Furthermore, by control of the state share of federal
expenditure, which is a matter of strenuous discussion in all of the
financially significant programs, the federal share is in effect
controlled as well. The final achievement of a well balanced pro-
gram of expenditure still lies with the governor and his fiscal

102

officers and with the legislature. The management of expenditure
during the biennium lies with the executive officers, especially
the governor and the Department of Finance, in those areas in which
they are permitted to function. The elimination of grants-in-aid
would give rise to a frantic scramble for alternate revenues rather
than permit the achievement of a new order of certainty and effi-
ciency in fiscal management.

Admim' strative Standards and Grants-in-aid

Of the benefit of federal super\'ision under the federal grants
to the development of personnel standards and administrative tech-
niques there can be little doubt. It is true that the progress
toward a career system in Illinois has been steady and there are a
growing number of employees who hold their positions as a result of
competitive examinations. One of the most highly trained and pro-
fessionally competent groups of state employees - the engineers of
the Division of Highways "^^ have been exempt from the requirement
of competitive examination and the protection of certified status.
Nevertheless they have been a stable group hired and promoted on
their qualifications.

But the influence of federal agencies has been an elem,ent in this
development and representatives of these agencies keep careful check
of the frequency with which examinations are given and of the pro-
fessional qualifications of persons for those positions for which
professional training is required. Even though the Bureau of Pub-
lic Roads has never set down specific requirements for state personnel
who adrrdnister aid funds, its influence is in the background when-
ever there might be a disposition to use engineering positions for
patronage purposes. It is most likely, in view of the adoption of
the new personnel code, that Illinois is now prepared to maintain
high standards of personnel administration in all departments on its
own responsibility but it could not be said that that was always
the case in earlier years.

Similarly in administrative techniques such as program planning,
the maintenance of departmental accounting and fiscal controls, the
preparation of procedural manuals, the determination of unit costs,
the use of inspection and statistical reporting as control devices,
the development of employee training, and staff developmient , the
federal agencies have shown the way to some state agencies whose
administrative leadership in an earlier day probably could not have
done as much on their own. One of the functions of the grant ad-
ministering agencies is to carry out studies of the effectiveness
of various types of organization and procedures and to act as a communi-
cations center for exchanging experience between the states. The
utter absence of trained people to administer such complicated

103

activities as unemployment compensation forced state administrators
to rely on federally developed procedures and systems in the days
when such programs were nev/. Now, thanks in part to training pro-
vided by the federal agencies:- the staffs of most grant receiving
agencies are well able to handle their problems.

Federal funds have been available to meet the costs of a number
of activities which seem to have been too esoteric to receive ready
state support. The admirable work done by the Division of Research
of the Division of Highways is financed by a special federal grant of
one per cent of the state's highv;ay allotment which is earmarked for
research. Research includes traffic studies, studies of construction
costs, financing, and economic benefits as well as engineering and
materials studies of all kinds. This allotment for research is to
be increased by an earmarked percentage under the 195S Highway Act
to study the im.pact of the highway program on local communities,
fiscal, social and economic conditions. In the welfare field,
federal funds can be used to finance experimentation by private
agencies, which the state itself cannot legally support, such as the
treatment of emotionally disturbed children or the vocational
adjustment of people who have been released from mental hospitals.
Federal funds are used to provide advanced professional training
for workers in such fields as public health, mental health and
child welfare, where trained poople are virtually unobtainable.
Until the new personnel code was adopted there was no legal authority
to provide funds for other than on-the-job training.

When the detailed operation of the grant prograns is studied it
is obvious that federal-state operations complement each other to a
consicerable degree instead of being exclusive and opposing possi-
bilities of action. The people in the various programs are not in
opposition to each other; nor are the groups in the population which
support these activities. V»hatever inferences may be drawn frcm con-
stitutional doctrine as to the proper role of state government and
federal government respectively, the battle is fought over particular
governmental activities, not over the roles in general. Groups which
oppose federal intervention in some fields seek it in others, and
vice versa. For example, groups in Illinois which have opposed
federal aid as an invasion of state rights, nevertheless opposed )
any change in the state personnel system which would lessen the
protection of employment service and unemployment compensation per-
sonnel partly on the grounds of the close relationship of these
activities to the federal government which pays the whole adminis-
trative cost. ;

The result of federal-state interaction, in grants in aid, and
in nonaided fiolds is an impressive interweaving of governmental
effort. There is obviously room for much more variation among

state administrations working under the federal supervision provided
by a grant program than there is in a single national administration
of the same matter. Further there are few fields of aided activity
which could conceivably be either exclusively state or exclusively
national. It is inconceivable that the federal government could
build and maintain every read for which the states now are res-
ponsible. If they could, there would still be rural roads and
city streets which would have to be worked into the national system.
Health is a matter for every government, from the township or village
up or the United States down. So is welfare. The conservation of
resources affects pri\ ately held lands which are subject to the
residual power of the states to control the private use of property
in the public interest quite as much as it affects the landownership
of the federal government.

The existence of unavoidably parallel activities in the
various forms of local government, state government and national
government is eased by the existence of the grant system which
provides a means of influence and a source of authority which one
government can exert over another without removing functions from
that government, and without transferring entirely decisions made
in a local or state arena to the national arena with its different
constellations of political power. The multiple authorities, re-
lated in part of their work by a grant system, work with more room
for individual and group initiative inside and outside the adminis-
tration than could be achieved by a monolithic national administra-
tion.

Nevertheless there is a degree of uniformity of policy and ad-
ministrative conditions which is appropriate to a nation which is
a single community for an increasing number of purposes and not
merely a legal entity within definable boundaries.

105
SELECTED BIBLIOGRAPHY

1. Annual Reports; Illinois Stats Agencies

The Adjutant General (biennial).

Auditor of Public Accounts (biennial).

Board of Vocational Education, Division of Vocational
Rehabilitation (mimeographed, available on request).

Department of Aeromautics.

Department of Agriculture.

Department of Finance.

Department of Public Health.

Department of Public V^elfare.

Department of Public Works and Buildings, Division of
Highways ( Proposed Highway ImDrovement Program) .

Illinois F\jblic Aid Commission,

Superintendent of Public Instruction.

University of Illinois, Report of the Comptroller,

2. Annual Reports; Federal Agencies.

United States Department of Agriculture, Agricultural
Marketing Service.

., Extension Service.

United States Department of Health, Education and Welfare,
Coirimissioner of Education (Annual Report on the Adminis-
tration of Public Laws 87A and 815).

3. Periodicals. ^

Illinois Labor. Illinois Department of Labor, Springfield,
Illinois Municipal Review. Illinois Municipal League, Springfield,
Industrial Review. Illinois Manufacturers Association, Springfield*

•1 -•• ••'

!??T17T'

106

Monthly .Lab^r_ .Review, U. S. Department af Labsr, Washington.

Social Security Bulleti.,-.. U. S. Department of Health, Educati»n
and Welfare, Sccial Security Administrati-^n, Washingtan.

4. C'T-ni'Pisgion on intgrqwerrOTi3.nta]^ Rej^i^ns: Rep_erts, Washingt^^n,

~ 1955.

Advisory Committee Report en Lscal Goverrinent.

Description of 25 Federal Grant-in-Aid Programs.

Report ta the President for Transmittal tc the Congress.

Staff Report on Civil Defense and Urban Vulnerability.

Staff Rejjort on Federal Aid to Airj»rts.

Study Committee Report on Federal Aid tc Agriculture.

Study Ccmmittee Report en Federal Aid ta Highways.

Study Ccmmittee Repcrt on Federal Aid to F\jblic Health.

Study Ccmmittee Report i!tn Federal Aid t^ Welfare.

Study Crrr.mitt<=e Repcrt on Federal Responsibilities in the
Field of Education.

Study Committee Repcrt on Natural Resources and O^nservation,

Study Ccmmittee Report en Payments in Lieu af Taxes and Shared
Revenues,

Study Committee Repcrt on Unemployment Compensation and
Emplryment Service.

Subcommittee Report on Natural Disaster Relief.

Sumnaries of Survey Reports on the Administrative and Fiscal
impact en Federal Grants in Aid.

Survey Report on the Impact of Federal Grants in Aid on the
Structures and Functions of State and Local Governments,

,A^+.:■;,••>f■t

107

5. Other Publications.

Edelman, Murray, et, al., Channels of Emplovment, University
of Illinois, Institute of Labor and Industrial Relations,
Urbana, 1952.

Federal Security Agency, Public Health Service, Final Report
of the Management Survey rf the Illinois Department ^
Public Health. Washington, 1950. (Department of Public
Health, 1952).

Click, Frank Z. , The Illincis Elmeraencv Relief Commission,
The University of Chicago Press, Chicago, 19A0.

Griffenhagen and Associates, A Highway Improvement Program for
Illinois. Chicago, 1948.

Illinois Ccminission on the Care of Chronically 111 Persons,
Second Interim Report Concerning Care rf the Chronically 111
in Illinois. Springfield, 19U1. (Report to the 65th General
Assembly) .

Illinois Public Assistance Laws Commission, A Proposed Public
Assistance Code of Illinois. Springfield, 19/+7. (Report to
the 65th General Assembly).

Illinois State Chamber cf Commerce, A ProqrEm, of Federal
Domination Over State and Local Affairs. Chicago 1954.

Illinois State Personnel Administration Commission, A Study cf
State Bnplovment. Springfield, 1955. (Report to the 69th
General Ass3mbly).

Key, V. 0. , Arimini stratjon of Federal Grants to the States.
Public Administration Service, Chicago, 1937.

National Association of Social Workers, Social Work Yearbook^
(Annual), New York.

Steiner, Gilbert, Legislati on by Collective Barqai ninq; The
Agreed Bill Process in Illinois Unemployment Compensation
Leqi slati'-'n. University of Illinois, Institute of Labor and
Industrial Relations, Urbana, 1951.

Taxpayers' Federation of Illinois, Control rf the Purse Strings.
Part ^, The Present Fiscal Process and Controls over State
Expenditure. Springfield, 1952.

108

U. S. Department of Health, Education, and Welfare, Office
of Education, The State and Education: The Structure and
Control of Public Education at the State Level, Washington,
1955-

U. S, House of Represent:;tives, Committee on Government
Operation, Replies from State snd Lccal Governments to
Questionnaire on Intergovernmental Relations. Washington,
1957.

109

LIST OF TABLES

Table 1 - I Revenue All Funds State of Illinois Including

Federal Grants in Aid 13

Table 2-1 Receipts in Illinois State Treasury For

Federal Aid tor Selected Years 14--15

Table 3-1 Federal Aid to Illinois end to the Ten

Least and Ten Most Wealthy States l6

Table U - I Top States in Federal Per Capita Grants

Received 17

Table 5-1 Top States in Federal Grants per capita

by Grant Program 18

Table 6 - II Financing of Projected Highway Improve-
ments in Illinois 26
Table 7 - II Federal Aid As Share of Current Illinois

Highway Expenditures 27

Table 8 - II Total Receipts for Highway Purposes 28

Table 9 - II Distribution of Motor Fuel Tax Receipts

for State, City, County, Township Road
Purposes 29

Table 10 - II Federal Aid for Airport Construction 30

Table 11 - II Airport Construction Program 31

Table 12 - II Cumulative Capital Expenditure, Illinois

Airports as of June 30, 195^ 32

Table 13 - III State and Federal Expenditure for Public

Elementary and Secondary Education in
Illinois for the Fiscal Year ending
June 30, 1956 39

Table lU - III School Lunch Program in Illinois AC

Table 15 - III Federal Aid for Current Operating Cost

to Schools in Federally Affected Areas

in Illinois 4.1

Table 16 - III Federal Aid for School Construction by

Counties 4,2

Table 17 - III Grants for Organized Research: University

of Illinois 43

Table 18 - IV Grants and Expenditure for Illinois

Crippled Children's Services 51

Table 19 - IV Expenditure of the State Department of

Public Health from State and Federal
Funds 52

110

Table CO - V Public Assistance Recipients and

Expenditures in Illinois 6U

Table 21 - V Expenditures of Illinois Public Aid

Commission 65

Table 22 - V Estimated Public Assistance Expenditure

for the 70th Biennium 66

Table 23 - V Expenditures and Workload for Vocatir,nal

Rehabilita-cion 67

Tab'e 24 - V Federal Contribution to Expenditure for

Operations of State Public Welfare

Department 68

Table 25 - VII Federal Assistance to the University of

Illinois for Agricultural Research and
Extension 80

Table 26 - VII State and Federal Expenditures for Wild-
life Conservation and Forestry 81

Table 27 - VII Wildlife Restoration Projects Under Way

or Completed During Fiscal Year
Ending June 30, 1956 82

Table 28 - VII Grants for Agricultural Marketing

Services 83

Table 29 - VIII Sanitary Water Board — Proposed and

Certified Priorities as of May 31,
1957 for Construction Grants under
Water Pollution Control Act 90

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UNIVERSITY OF ILLINOIS-URBflNA

336 18M76I C002

THE IMPACT OF FEDERAL GRANTS IN ILLINOIS

3 01

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