Locals rally to defend CDBG funding
The federal Community Development Block Grant (CDBG) program is facing cuts in its budget again, for the first time since President George Bush proposed completely defunding the program. House Republicans slashed the CDBG program by $2.9 billion in their fiscal year (FY) 2011 budget proposal, and President Obama’s proposed FY 2011 budget included a $300 million cut to the program. As debate on a final federal budget was still ongoing as of early April, local government associations rallied to keep funding for the program.
The federal CDBG program started in 1974 to provide funding directly to local communities for housing rehabilitation, blight remediation, infrastructure improvements and social services, according to a new report from the Washington-based National League of Cities (NLC), U.S. Conference of Mayors (USCM), and the National Association of Counties (NACo). “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 [the CDBG] program.”
However, critics of the program, such as the Washington-based conservative think tank The Heritage Foundation, argue that CDBG has become a source of funding for wasteful pork-barrel projects and, therefore, should be eliminated. That is not true, says NACo spokesperson Jim Philipps. “The block grants allow flexibility for local communities to use the funds to enhance the quality of life in those communities, [such as on] housing rehab, water and sewer infrastructure, children and senior centers, programs for the disabled, etc.,” Phillips says.
From FY 2006 to 2009, funding for the program dropped from $4.1 billion to $3.9 billion, according to the Department of Housing and Urban Development. It rose to $4.4 billion in FY 2010, and was cut again to its current level of $3.9 billion. Further cuts would cost jobs and harm the economy, Phillips says. “Now is the worst time to cut a jobs program such as CDBG,” he says.
Cut to the quick
During 2003-2008, within 10 communities, 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, local governments estimate the CDBG program spurred the creation of 147,000 jobs annually and $13.1 billion annually in gross domestic product.
Source: Lexington, Mass.-based IHS Global Insight, “Community Development Block Grants: Impacts on Metro Economies,” March 16, 2011