The President's 1984 budget proposes a thorough-going reform of the way in which subsidies for operations and modernization are distributed to some 1.2 million dwelling units run by local public housing authorities (PHAs). The present patch-work system has evolved piece-meal over the past fifteen years, mostly in an era when double digit inflation was unthinkable. It is hardly surprising, therefore, that this multifarious funding system has not weathered the past stormy decade without criticism.

Indeed, both the Administration and the Congress have been moderately dissatisfied with the present system since at least the beginning of the Carter administration. At that time, the Department of Housing and Urban Development (HUD) undertook an intensive evaluation of the Performance Funding System--the system used to calculate the level of operating subsidies needed by individual PHA's. In 1981 Congress asked HUD to prepare a report on options for improving the administration of the operating subsidy system and for improving the incentives for good management embodied in the system. This report was duly delivered in the spring of 1982. In the same year the Senate authorizing committee gave thoughtful consideration to modifying the funding system, but its counterpart committee in the House failed to address the issue.

This report is part of the collection of scanned historical documents available to the public.