Yesterday I wrote of the negative aspects of "block-granting" by the Bush Administration as a way to help neighborhoods fund development. In some places, block-granting is the way that rural municipalities compete with other communities to fund basic services. Block grants were originally intended to help economic development in blighted areas; now the Bush Administration seems to be using them as a means of selectively funding basic infrastructure needs, while committing as little federal money as possible to local communities.
The small town of Bell Buckle is an example of that. Bell Buckle needs $500,000 to $600,000 to make needed repairs to their sewage system. The state has ordered those repairs because of "61 instances of bypass overflow with the waste water system which allowed an estimated 1.6 million gallons of partially treated wastewater to enter Bell Buckle Creek." The town either does not have the tax base to support those repairs or it does not have the political will to raise taxes to pay for those repairs, so it pursued a block grant. After being turned down in October, town leaders reapplied in December and they are crossing their fingers, hoping to get some grant money.
When so used, "block-granting" becomes a tool of Social Darwinism. While Bell Buckle should have to compete with other communities for block grants for less basic economic development (home repair for people on fixed incomes, for instance), they should not have to rely on block grants for funding basic needs like sewage treatment, especially when state officials require them to upgrade their system to avoid environmental damage. As it stands, they are caught between a rock and a hard place. They may not "make any further connections, line extensions or allow increased flows to the waste water collection system" until they fix their sewer problem. That means that they cannot pursue new housing starts until the problem is solved, which means that they cannot create positive growth that would attract more "state-shared" revenues (which other communities, like Spring Hill, score) that might help them pay for their waste water system.
Smaller communities like Bell Buckle should fund their basic services from local taxation as far as possible, even if it means higher taxes. Whatever they cannot meet should be shared with the state and federal governments, not by means of block grants, but by longer-term programs funded by progressive taxation. State and federal officials could provide incentives in these programs, including withholding future funds or imposing fines if necessary repairs and upkeep do not occur to satisfy environmental regulation.
If Bell Buckle does not get a block grant, their future may become more tenuous. If they do get a block grant, that means that some other community that may need funds just as badly will not get help with their basic service problems. That's no kind of state to live in.