INSIDE WASHINGTON/Cutting where it hurts

President Bush is proposing a $1 billion cut from a key federal grant program used by cities and counties and consolidating it with 17 other funding plans as part of his $2.57 trillion budget designed to help reduce the deficit by half in four years. Bush’s proposal to slash the Community Development Block Grant (CDBG) from $4.7 billion to $3.7 billion and rename it the “Strengthening America’s Communities Grant Program” has sparked a loud outcry from local officials who describe it as “outrageous and appalling.”

“We are going to fight this to the bitter end,” says Don Plusquellic, mayor of Akron, Ohio, and president of the Washington-based U.S. Conference of Mayors (USCM). “We will ask Congress to totally reject the transfer of CDBG to the Commerce Department and [funding cuts] and to restore the funding to its existing level.”

While local governments are concerned about other domestic programs being threatened by the cuts, eliminating CDBG worries city and county officials the most. For 30 years, local officials have relied on CDBG funds to help revitalize blighted neighborhoods through economic development and pay for a wide variety of other services in their communities such as youth activities, teaching residents English and helping people find affordable housing. Currently, CDBG funding is administered by the Department of Housing and Urban Development.

“CDBG is not only a wise economic investment and community planning tool, it really is a lifeline for our poor communities and our neediest citizens,” says Anthony Williams, mayor of Washington and president of the Washington-based National League of Cities. Washington has a partially CDBG-funded development, says the mayor, that will create 300 construction jobs and 300 retail jobs when it is finished. “It will bring national and local retail to an area of my city that sorely needs them.”

Local officials and some business executives argue CDBG funding helps to attract private investment by leveraging public funds to draw private dollars into communities. “For every $1 of CDBG funding, approximately $2.79 in private funding was leveraged in FY 2004,” according to figures provided by USCM.

But the White House claims CDBG needs to be reexamined and pared down because many of its programs are duplicated, and in some cases communities that no longer need financial assistance are still receiving the grants. An Office of Management and Budget fact sheet explained the proposed program by stating that the current programs, “lack clear goals and accountability measures.”

Members of Congress, however, appear to side with local officials who are outraged at the proposed plan. So far, they are dismissing Bush’s call for the steep cuts and have vowed to fight them when Congress drafts its own budget in April.

“I think those cuts are a non-starter, and I presume we are going to get some changes,” says Sen. Norm Coleman, R-Minn., former mayor of St. Paul. “I used them as a mayor. They grow the economy. They grow jobs. They build cities. It is infrastructure development. The proposed cuts are much too deep and much too hurtful. [The president] is attacking our metropolitan core.”

The author is Washington correspondent for American City & County.