Report: Economic development aided by CDBG funding
The federal Community Development Block Grant (CDBG) program encourages economic development by creating jobs, growing local economies, and increasing state and local tax revenue by providing flexible funding for communities to address unique local needs. That is the message of a preliminary report released Wednesday by a group of local government associations.
The Washington-based National League of Cities (NLC), U.S. Conference of Mayors (USCM), and the National Association of Counties (NACo) commissioned and are using the report, prepared by Lexington, Mass.-based IHS Global Insight, to demonstrate CDBG’s direct and indirect economic benefits in light of proposed cuts to the program’s fiscal year 2012 budget. The program provides funding directly to local communities for housing rehabilitation, blight remediation, infrastructure improvements and social services, including additional private-sector investment, according to the report.
“CDBG’s linking of private sector dollars to government seed money has created thousands of jobs while providing the nation a firm basis for future economic and technological growth,” NLC President and Charlotte, N.C., City Councilman James Mitchell said in a statement. “It is shortsighted to cut a program that’s putting people to work and providing much needed investment in our communities.” During 2003-2008, within a sample group of 10 communities cited in the report, CDBG generated annually an average of:
• 9,080 jobs;
• $811 million of gross metropolitan product;
• $552 million in labor income; and
• nearly $65 million in state and local tax revenue.
Extrapolating those numbers to the full CDBG program nationwide, Global Insight estimates that from 2003 to 2008, the CDBG program spurred the creation of 147,000 jobs annually and $13.1 billion annually in gross domestic product. Within the 10 communities, the report also projected that for every $33,000 of CDBG funds expended, a job was generated.
The CDBG program has been a strong economic development tool to create jobs and replace crumbling infrastructure in communities in Tarrant County, Texas, said NACo President and Tarrant County Judge Glen Whitley. “Tarrant County has created thousands of engineering, architectural, and construction-related jobs as a result of the CDBG program,” Whitley said. “We have reconstructed hundreds of thousands of lineal feet of streets, water and sewer lines in older, lower-income residential neighborhoods. Without CDBG funds, these neighborhoods would have continued to decline, not only affecting the entire public infrastructure system, but greatly impacting the individual lives of the people living in these communities.
NLC, USCM and NACo representatives have spent the past weeks appealing to Congress to restore the program and fund it at the current fiscal year 2010 level. “Economic reports show that, by the end of this year, more than 100 metropolitan areas will still have double-digit unemployment,” USCM President and Burnsville, Minn., Mayor Elizabeth Kautz said in her statement. “A reduction in this funding would severely slow down economic recovery. Considering that CDBG is a job creator and an engine for economic growth, now is the worst possible time to cut it.”