By Elena Temple-Webb, Dave Gatton and Gene Lowe
March 28, 2011

The U.S. Conference of Mayors, the National League of Cities, and the National Association of Counties at a March 16 press conference in the Hart Senate Office Building continued their fight to Save CDBG and avoid draconian cuts (62 percent) in the program. These cuts were passed by the U.S. House of Representatives in H.R. 1 in February.

At the event, the three organizations released a major report outlining the broad economic impacts of the Community Development Block Grant program. Prepared independently by IHS Global Insight, the report calculated the economic impacts of the CDBG program in ten cities and counties. Between 2003-2008, these ten communities spent an annual average of nearly $300 million, which generated per year 9,080 jobs; $811.6 million annually in Gross Metropolitan Product; $551.9 million annually in labor income; and $65 million annually in state and local tax revenues.

Using these figures, Global Insight projected that during the period, the full CDBG program across the nation created 147,000 direct and indirect jobs annually, and generated $13.1 billion annually of Gross Domestic Product. These figures highlight the important leverage that the CDBG brings to our local economies. The communities surveyed included Akron, Chicago, DeKalb County, Los Angeles County, Newton (MA), Philadelphia, Salt Lake City, Seattle, St. Louis, and Tarrant County.

In Salt Lake City, for example, the city averaged CDBG expenditures of $5.8 million between 2003-2008 for a total leveraged investment of over $27 million. With this leverage, the CDBG program in the city annually generated 531 jobs, over 31 million of Gross Metropolitan Product, over $21 million in labor income and $2 million in state and local taxes.

“Global Insight’s report clearly shows what local-elected officials have known for a long time. The CDBG program is critical for our local economies. Not only does it create jobs, but its economic impact also reverberates throughout our communities,” said U.S. Conference of Mayors President Elizabeth B. Kautz.

The National League of Cities President James Mitchell, Council member from Charlotte (NC), agreed, saying, “The CDBG program has been a catalyst for economic development in our nation’s communities.”

Mitchell continued, “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. It is shortsighted to cut a program that’s putting people to work and providing much needed investment in our communities.”

National Association of Counties President Glen Whitley, County Judge, Tarrant County (TX), said the CDBG program has been a strong economic development tool to create jobs and replace crumbling infrastructure in communities in his county.

“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.

“As the report shows, CDBG funds assist local government in revitalizing neighborhoods to create safe, nurturing communities for families. One CDBG-funded project can revitalize a neighborhood and extend the life of its public infrastructure by 20 years,” said Whitley.

The National League of Cities First Vice President Ted Ellis of Bluffton, Indiana said: “We have 10,000 residents in Bluffton, Indiana. Probably more than any other, small communities really feel the impact of CDBG funds, which provide clean water infrastructure, transportation infrastructure and necessary wastewater and storm-water services.”

Newton (MA) Mayor Setti Warren, Chair of the Conference of Mayors Committee on Community Development and Housing, said, “ At a time when our unemployment level hovers close to nine percent, at a time when our seniors are trying to keep their homes heated, and at a time when young people are struggling to get out of school, the House of Representatives voted to gut this program by sixty-two percent in H.R. 1.This is one of the most irresponsible acts in government that I have seen.”

Prince George’s County Executive Rushern Baker, representing NACO said, “It is important when we talk about CDBG funds that we use the words leverage and investments. The state rolls down cuts to us, and so we are forced to make cuts on the local level. My budget in Prince George’s County makes cuts, but is also makes investments at the local level to create jobs and economic opportunities. I know this because I started my career working for a non-profit agency that used CDBG funds to create the Washington (DC) you see today.”

Davenport (IA) Mayor Bill Gluba said, “These draconian cuts proposed by Congress in H.R.1 [to cut CDBG funding] are clearly cruel and vicious assault on the least of our brethren; these cuts are truly immoral and make a mockery of the Judeo Christian values that are talked about on the floor of Congress of the Unites States; and these cuts are also job killers since a great deal of the CDBG funding goes to job creation and economic development and transportation so that low-income people can get to work. … It is outrageous for Washington to have bestowed more than a trillion dollars in TARP bailout funds for big banks and Wall Street and now cut CDBG funding.”

Conference of Mayors President Burnsville (MN) Mayor Elizabeth B. Kautz concluded by saying, “Economic reports show that by the end of this year, more than 100 metropolitan areas will still have double-digit unemployment. And 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.”

Local elected officials across the country have banded together to fight proposed cuts to the Community Development Block Grant program, and will continue to travel to Washington (DC) to appeal to Congress to restore the program and fund it at current Fiscal Year 2010 level.