By Ed Somers
April 25, 2011

The budget deal worked out between the Administration and Congress contains a 16.2 percent reduction in CDBG formula funding, a $647 million cut for the current year. As a result, formula funding will be reduced from $3.99 billion in FY 2010 to $3.343 billion in FY 2011.

To help put this cut in perspective, CDBG reached a low of $2.880 billion in FY 1988 during the Reagan Administration, and the program is now funded at just $3.343 billion, with no adjustment for inflation and many more cities now eligible for direct entitlement funding.

The U.S. Department of Housing and Urban Development is working on formula allocations for cities, counties and states based on this new level.

The Conference of Mayors, united with the National League of Cities and National Association of Counties, led a campaign to save CDBG starting in late December of 2010. At that time, it was learned that the Administration was considering a 25 percent cut to the program, which was reduced to a proposed 7.5 percent cut for FY 2012 after extensive outreach to the White House by mayors and other advocates.

One month later, the House Republican Study Committee recommended the total elimination of CDBG, followed by a 62.5 percent cut adopted by the House in H.R. 1. This prompted a series of press events and high-level mayoral/Senate meetings led by Conference President Burnsville Mayor Elizabeth B. Kautz and other Conference of Mayors officers and leadership members.

In addition to the large cut to CDBG, the $38 billion budget cut deal contains huge reductions to other domestic programs of importance to mayors and cities – the size of which have not been seen in recent times. For example:

• High-Speed Rail funding was eliminated.

• Transit New Starts grants were cut by 20 percent.

• Homeland security grants were cut by 18-24 percent.

• COPS and Byrne justice grants were cut by 17 percent.

• Clean water funding was cut by 27 percent.

• Drinking water funding was cut by 30 percent.

• HOME was cut by 12 percent

• Public Housing Capital was cut by 18 percent.

• Community Health Centers were cut by 27 percent.

There is no funding for the Energy Efficiency and Conservation Block Grant, which is authorized at $2 billion annually.

The cuts to homeland security and law enforcement come at a time when cities are still facing serious threats, and some cities are having to lay off public safety personnel.

The water cuts must be put in the context of ever-increasing federal mandates.

And to further confuse matters, the bill contains a 0.2 percent across-the-board cut to non-defense domestic discretionary programs, which will have to be calculated by OMB and the federal agencies.

The bill (H.R. 1473) passed the House on April 14 by a vote of 360-167, with the Senate the same by 81-19.

A detailed summary of the budget agreement is available at usmayors.org.

Now that the new baselines have been set, the campaign to fund CDBG and other domestic priorities faces an even tougher challenge, as pressure builds in Washington to make further cuts in FY 2012 appropriations. Congress needs to act soon on raising the debt ceiling and serious discussions are beginning on entitlement and tax reform. These debates make the outlook for domestic discretionary programs even more uncertain.

The Conference of Mayors is urging local business leaders, and service providers to document the impact of cuts to CDBG and other priorities that have just been approved, so that members of Congress can be persuaded not to cut even deeper in FY 2012.

In addition, it is most important to focus advocacy efforts on the House and Senate Appropriations Committees, especially the Subcommittees that handle CDBG and transportation priorities (see boxes).

National Community Development Week begins on April 25, with members of Congress and Senators home for recess. Mayors, city, and county officials will be using this time to highlight what CDBG does in their districts and states, and how the program helps leverage economic development, build infrastructure, and provide critical services to the American people.