By Eugene T. Lowe
March 29, 2004

The Community Development Block Grant Program (CDBG), the signature program for cities and counties, has received an "ineffective" assessment in the FY05 budget proposed by the Administration. The Senate has approved a budget resolution that assumes a $2.14 billion cut in the Community and Regional Development, the function which funds CDBG at the Department of Housing and Urban Development, Conference President Hempstead (NY) Mayor James A. Garner testified before the House HUD funding subcommittee on March 25 and urged a $700 million increase in the program for the next fiscal year. Garner testified on behalf of the U.S. Conference of Mayors, National Association of Counties, National Association of Local Housing Finance Agencies, and the National Community Development Association.

Garner told the VA, HUD and Appropriations Subcommittee, chaired by Representative James T. Walsh (NY), that CDBG, now in its 30th year, is "working across the country... and its success is the inherent flexibility for it to adapt to affordable housing and neighborhood revitalization needs in our nation's urban, suburban and rural areas." Citing the accomplishments of CDBG in FY2003 alone, Garner said that 94.8 percent of the program funds benefitted low and moderate income people in cities and counties. During this time of a critical job shortage in our nation, CDBG has developed a track record of creating jobs. Again in FY2003, the program created or retained 108,700 jobs. CDBG also creates businesses, and of those created, 80 percent are "still in operation after three years."

But the bad news, Garner told the subcommittee, in spite of CDBG's impressive performance, the program's annual formula allocation "has remained relatively static over the last decade, even decreasing slightly in the past two years." Garner added: "With the existing cuts to the program, continued project'specific set-asides in the program, inflation, and more entitlement communities receiving funds, the formula allocation is decreasing nationwide for cities and counties that administer the program. In the last two years, an across-the-board reduction in federal programs has reduced the program even further."

Funding Challenges

Because of the many challenges to the funding of the program, Garner asked that the subcommittee approved funding for CDBG formula grants, the direct entitlement grants to cities and counties, at a level of at least $5 billion. Last year's (FY2004) formula funding level was $4.3 billion.

During his testimony, Garner took issue with the Office of Management and Budget's characterization of CDBG as "ineffective" in the Administration's FY2005 budget request which was reached through the agency's Performance Assessment Rating Tool (PART). Garner said: "In the PART review of the CDBG program, it appears that OMB chooses to interpret the statute and facts in order to support a dogmatic agenda and avoids acknowledgment of any positive achievements from the more than $105 billion in CDBG funds spent by cities, counties and states since 1975 on their most pressing affordable housing, community and economic development needs over the 30 years of the program." Garner urged the subcommittee to reject OMB's assessment "out of hand."

In his testimony, Garner also requested that the subcommittee fund the HOME Investment Partnerships Program in FY2005 at least at $2.25 billion in formula grants; $200 million in funding for the American Dream Downpayment Initiative; $50 million for Brownfields development at HUD; $1.27 billion for homeless funding; restoration of the HOPE VI, the distressed public housing program; and, $50 million in the Lead Hazard Reduction Demonstration Program.

Garner also told the subcommittee that the administration's cut in the Section 8 voucher program was unacceptable. He said that the budget request for Section 8 falls short by $1.6 billion needed to fully fund all vouchers now in use. "Approximately 250,000 low income families could lose their vouchers," he added.