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Wednesday, February 2, 2011

Vocational Rehabilitation Grants to States and Territories: Overview and Analysis of the Allotment Formula

Umar Moulta-Ali
Analyst in Disability Policy

Title I of the Rehabilitation Act of 1973, as amended, authorizes the federal government to make grants to states and territories to provide vocational rehabilitation (VR) services to persons with disabilities who are interested in seeking and retaining employment. State and territorial VR agencies work with clients to determine their optimal employment outcomes and put together packages of services to help them meet these employment goals.

The authorization for the VR program expired at the end of FY2003; Congress has continued to make appropriations to the Department of Education to fund the program under the provisions of an extension clause in the Rehabilitation Act. Both chambers worked on bills in the 109
th Congress that would formally extend this authorization through FY2011, but these bills did not result in the enactment of a law before the end of that Congress. Reauthorization bills were not taken up by either chamber in the 110th Congress, although the 111th Congress included a supplemental appropriation for the VR program in the American Recovery and Reinvestment Act of 2009. The President’s FY2011 budget request proposes an extension of the VR appropriation as part of a reauthorization of Workforce Investment Act of 2005.

Funds for the VR program are allotted to states and territories according to a formula that allocates money based on three factors: state allotments in FY1978, current state population, and current state per capita income.

However, a 2009 GAO report cited the VR funding formula as inequitable because the formula does not fully account for (1) the actual number of individuals with disabilities within a state or territory, (2) differences in the costs of providing VR services across states and territories, (3) the ability for a state or territory to meet its statutory fund-matching obligations to the program, and (4) varying population growth since the mid-1970s across states and territories.

Others have criticized the allotment formula for not ensuring that each state or territory is given an increase in funding to match increases in the cost of living. In addition, the formula has been criticized for not including measures related to a state’s or territory’s overall performance.

Date of Report: January 13, 2011
Number of Pages: 33
Order Number: RL34017
Price: $29.95

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