Re-Routing & Reversing Intergovernmental Grants through Service Redesign

While intergovernmental grants often involve transfers from a higher-level of government to a lower-level government, some Minnesotan counties are working with the state to re-route and even reverse the flow of those monies.

As in most areas of the US, Minnesotan counties are mandated by the state to provide a number of services to their citizens, including the provision of human services. Chemical dependency programs, disability services, and Food Support programs are just a few of the myriad services that counties provide in part with intergovernmental revenue from to state.

Yet 12 counties in Southeastern Minnesota are starting to reexamine this model. The Southeastern County Redesign aims to create a streamlined, regional system of human service provision that is more client-centered and economically efficient than current practice. In addition to creating a regional body (or cooperative) to oversee the 12-county provision of “low-touch” human services, this plan also includes passing other “low-touch” human services (and its funding) back up to the state level on the premise that these services can be better administered by a regional body or the state. Rather than state funds for these human services going directly to each county, funds for particular services would be directed to the regional body or the state (DHS).

In terms of political feasibility, passing those services and the funding that comes with it to the regional body/DHS is a contentious topic for various reasons. Some believe that even “low touch” services should be administered at the local level due to the value of face-to-face contact with case workers. Others doubt that an additional layer of government (the regional body) or the state can ultimately deliver services anymore effectively/efficiently than local governments. Still others are concerned that county government agencies will lose jobs by passing programs (and their respective funding) back to the state or to a regional body. Especially in rural areas, local government jobs are coveted as a stable and decently-paying gig. Yet as the SE Redesign moves from the planning stage to implementation over the next few years, it will be interesting to see how this re-routing/reversal of intergovernmental grants affects the client experience and proves to be economically more efficient.

While the amount of funding that these southeastern counties would be passing to the regional cooperative or back to the state is small in comparison to the total of amount of intergovernmental grants received, will this strategy become more widespread as local governments struggle to provide mandated services with shrinking budgets? Are there some services that simply need to be administered by local governments?