By Elena Temple
February 20, 2006

Following the Administration’s latest move to cut the Community Development Block Grant (CDBG) program by a billion dollars, the CDBG Coalition, which includes the Conference of Mayors and several other organizations, once again sprung into action to fight this proposal.

Under the measure, formula grants allocated directly to local governments are reduced from the current $3.711 billion to $2.75 billion. In addition, the budget calls for significant reforms including a new allocation formula and a bonus fund component. If approved, several HUD programs would be eliminated and consolidated into CDBG, including Brownfields Redevelopment, Rural Housing and Economic Development, and Section 108 Loan Guarantees.

Coalition members are concerned that the 25 percent reduction in funding will pose serious threats to their ability to provide important services and economic recovery for their citizens. As mayors know, CDBG is an important tool used by local and state officials as they tackle their most serious community development challenges. CDBG provides funding for public works and infrastructure, affordable housing, public services and economic development. Many of these activities are carried out at the local level by private companies, such as construction contractors, plumbers and electricians, as well as by non-profit community-based providers.

Because of its flexibility and use in a variety of projects, local and state governments and development officials have come to rely on the program for new community revitalization efforts. Every dollar of the CDBG program invested in communities is leveraged by three dollars in private funding, bringing much-needed investment, jobs, and the chance for a fresh start to blighted communities.

Last year, the Coalition convinced Congress to reject the Administration’s proposal to eliminate the CDBG program in the FY2006 Budget. Members of Congress were impressed with the number and scope of projects made possible by the CDBG program in urban and rural communities. Over 180 Members of the House, led by Representatives Mike Turner (OH) and Christopher Shays (CT), and 55 Senators, led by Senators Norm Coleman (MN), Patrick Lehey (VT), Paul Sarbannes (MD) and Jack Reed (RI), supported maintaining this critical program.

Just a few months ago, the Administration and Congress recognized the effectiveness of the CDBG program and delivered $11.5 billion in targeted CDBG funding to the Gulf Coast for reconstruction activities after the 2005 hurricane season.

This year, the Coalition has once again initiated a grassroots campaign of targeted press events, as well as a mobilization of Coalition members and business leaders to call on Congress to reject the Administration’s proposal.

Conference President Long Beach Mayor Beverly O’Neill expressed her support of the CDBG program saying, “The nation’s mayors believe that in order to keep America strong, Congress and the Administration must responsibly invest in cities and local communities, which are the engines that drive this nation’s economy.

“For more than 30 years, CDBG has been recognized by HUD as one of its most efficient tools to strengthen local communities. It is an effective program that helps millions of Americans by investing directly in neighborhoods. It increases homeownership and gives local governments the flexibility to address a variety of other needs.

“This budget, however, erodes the CDBG program with this $1 billion cut and puts it on the road to elimination. As the national debate on budget priorities unfolds, the nation’s mayors are more determined than ever to stop this unwise and misguided effort to undermine this invaluable program. As we did before, we will work with our coalition of national organizations to take our fight to Capitol Hill. Because this program impacts so many communities in our country, we expect that the bi-partisan support we saw last year for CDBG remains in both houses of Congress.”

Along with the Conference of Mayors, members of the coalition include: The Council of State Community and Economic Development Agencies Enterprise; Habitat for Humanity; The Housing Assistance Council; The International Economic Development Council; The Local Initiatives Support Corporation; The National Association for County, Community and Economic Development; The National Association of Counties; The National Association of Development Organizations; The National Association of Housing and Redevelopment Officials; The National Association of Local Housing Finance Agencies; The National Community Development Association; The National Conference of Black Mayors; The National League of Cities; and The National Low Income Housing Coalition.