Reform Options for the Intergovernmental Funding System: Decategorization Policy Issues.

In the midst of the current concern for system reform and effective services there is renewed attention to the effects of categorical funding as the predominant method of allocating resources for children and their families. This paper presents a historical view of categorical funding for services to children and families. It explores the policy options currently under review and the cases made for and against these options--in particular, the option of decategorization with increased accountability. Many of the fundamental issues that decision makers at all levels must address are raised. It takes a general position in favor of forms of decategorization that stops short of a fully decategorized system. The paper emphasizes that decategorization is not a substitute for resources but a way for getting better effectiveness from existing sources, and warns against tying decategorization to reduced overall funding to meet the administration's deficit-reduction goals across domestic programs. Appendices contain proposals for state models of negotiated, accountable decategorization that rest on two goals: (1) increasing state and local accountability for decision making about services for children and families; and (2) supporting wider services integration as a means to more effective outcomes for children and families. Information on the Finance Project and available project resources are included. (Contains eight references.) (LMI)