national finance strategy that involves investing a total of $1.5 billion in federal and state funds in the first 5 years to support infrastructure efforts within the states. The federal budget figure of $200 million per year is derived from three calculations: (1) annual state expenditure levels during the mid-1990s, (2) the level of spending necessary to provide additional resources to states with high levels of need without reducing current award levels for each state (known as a “hold harmless” provision), and (3) additional infrastructure requirements associated with adjusting to anticipated changes and increased complexity in the immunization schedule. The additional state contribution of $100 million per year above current spending levels is necessary to reduce current disparities in state spending practices and to address future infrastructure needs in such areas as records management, development of appropriate performance measures and immunization registries, and outreach and education for adult vaccines.

Federal reporting requirements for immunization grants should be reduced to six key areas that reflect the six fundamental roles of the national immunization system discussed in this report. Grant budgetary cycles should be extended to 2 years to give states greater discretion and flexibility to plan and implement multiyear efforts in each area.

Recommendation 4: Congress should improve the targeting and stability of Section 317 immunization grant awards to the states by replacing the current discretionary grant award mechanism with formula grant legislation.

The formula should reflect a base level as well as factors related to each state’s need, capacity, and performance. A state match requirement should be introduced so that federal and state agencies share the total costs of supporting the infrastructure required to operate a national immunization program and respond to the needs of disadvantaged populations.

Recommendation 5: CDC should initiate a dialogue with federal and state health agencies, state legislatures, state governors, and Congress immediately so that legislative and budgetary reforms can be proposed promptly when Section 317 is up for reauthorization in FY 2002.

The construction of a grant formula and the calculation of weights as recommended above is a complex analytical process that requires estimating the appropriate size of the federal base grant; determining the conditions that would facilitate redistribution of federal resources to areas of need but also maintain an adequate level of investment within each

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