Main Street

Cuts to Block Grant Program Hurting Cities

Cities are already suffering from budget shortfalls, decreasing tax revenues, foreclosures, and unemployment. Now they’re being hit hard by cuts to the federal block grant program. From the New York Times:

The shrinking federal program, called Community Development Block Grants, was devised by the Nixon administration to bypass state governments and send money directly to big cities, which were given broad leeway to decide how to spend it. This year the federal government is giving out just $2.9 billion — a billion dollars less than it gave two years ago, and even less than it gave during the Carter administration, when the money went much further.

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Cuts to the block grants program were cited in a recent report by the nonpartisan Government Accountability Office, which noted that the number of vacant properties in America has jumped to 10 million from 7 million in 2000, threatening to attract crime and cause blight. “With sustained high foreclosure and unemployment rates and further declining home values, local officials said that continued, flexible C.D.B.G. funding would help them maintain efforts to address vacant properties in their areas,” the report noted.

Stabilizing neighborhoods that have been hard hit by foreclosure seems like a really good idea. Over 10 million vacant properties in the US is a recipe for disaster.

But mayors see it as an invaluable tool — one of the few federal programs that sends money directly to big cities, without going through the middlemen at the state level. Before its creation, mayors had to apply for small grants in many specific areas — leading to complaints of the this-food-is-terrible-and-the-portions-are-so-small variety. Tom Cochran, the executive director of the United States Conference of Mayors, said that mayors were thrilled when the Nixon administration agreed to consolidate the various grants into a single block grant program, which could be used broadly for community development, with local officials choosing their priorities. It was signed into law by President Gerald R. Ford.

It makes sense to let the cities decide what their own needs are, and not force them into one size fits all solutions.

From the website of the Community Bock Grant Program:

The CDBG program works to ensure decent affordable housing, to provide services to the most vulnerable in our communities, and to create jobs through the expansion and retention of businesses. CDBG is an important tool for helping local governments tackle serious challenges facing their communities. The CDBG program has made a difference in the lives of millions of people and their communities across the Nation.

With poverty and homelessness on the rise, it seems more than a little short sighted to cut the funding for this program, especially given that this funding is a proven source of job creation.

Photo by Loozrboy on Flickr, via Creative Commons.

Tags: Housing, Jobs