Grant money on the rise

Federal grants to state and local governments are expected to increase substantially over the next three years, hitting $440 billion by fiscal 2006, according to a report by the market research firm Input Inc., Reston, Va.

With state and local governments facing mounting deficits and rising costs to deliver services, they "are relying on federal grants to fund technology procurements and to move programs and projects forward," said Meredith Luttner, Input's manager of state and local market development services.

Input's report shows that overall federal grant funding to state and local governments will increase by nearly $56 billion between fiscals 2003 and 2006.

The firm analyzed the changes in federal allocations in 14 categories over the next three years. Most of the additional grants are in the health area, which is expected to increase to more than $49 billion.

The next-largest dollar value increase is for income security or public assistance programs, which will increase by $4.2 billion. The area of community and regional development, which will drop by $3.7 billion, is losing the most in grant funding.