Under the law as it existed until 1943, the Federal Government made grants to the States on the basis of population, matching State expenditures on a 50 - 50 basis. Under P. L. 113, 78th Congress, the Federal Government assumed responsibility for 100% of necessary State expenditures in connection with administration and the counseling and placement of the disabled, and for 50% of the necessary costs of providing clients with rehabilitation case services. Throughout these years, the statutory authorization was for such sums as were necessary to carry out the provisions of the Act.

The 1954 Amendments completely changed the financing of the vocational rehabilitation program, providing for a three part grant structure -- for (1) basic support; (2) extension and improvement; and (3) research, demonstrations, training and traineeships for vocational rehabilitation -- and in addition for short-term training and instruction. The first part of the new structure -- that for supporting the basic program of vocational rehabilitation services -- is described in this Section. Subsequent sections on grants describe the other categories of the grant structure.

The following table shows, for selected years, the authorizations, appropriations, allotment base, Federal grants to States and State matching funds for this part of the grant program.

In order to assist the States in maintaining basic vocational rehabilitation services, Section 2 of the amended Act provides that allotments to States for support of such services be based on (1) need, as measured by a State's population, and (2) fiscal capacity, as measured by its per capita income. The Act further provides for a ``floor'' or minimum allotment, set at the 1954 level, which is called the ``base'' allotment, and a ``ceiling'' or maximum allotment, for each State. It stipulates, in addition, that all amounts remaining as a result of imposing the ``ceiling,'' and not used for insuring the ``floor,'' be redistributed to those States still below their maximums. These provisions are designed to reflect the differences in wealth and population among the States, with the objective that a vocationally handicapped person have access to needed services regardless of whether he resides in a State with a low or high per capita income or a sparsely or thickly populated State. The provisions are also designed to avoid disruption in State programs already in operation, which might otherwise result from the allotment of funds on the basis of wealth and population alone.