Senator Susan Collins has co-signed a letter, drafted by Senator Norm Coleman (R-MN) and Senator Patrick Leahy (D-VT), that requests an increase in funding for the Community Development Block Grant (CDBG) Program. The letter was sent to the Chairman and Ranking Member of the Senate Budget Committee.
The letter requests $4.1 billion in CDBG for the 2008 fiscal year. President Bush’s budget proposes an estimated $2.975 billion in CDBG funding, a decrease of approximately $735 million from the 2007 fiscal year.
“CDBG funding benefits communities across Maine,” Senator Collins said. “From Maine’s largest, urban communities, to our many small, rural towns, the CDBG funds awarded each year allow communities to pursue infrastructure improvement projects and community and economic development initiatives that would otherwise be unaffordable. If the Administration’s proposed cuts to CDBG are enacted, I am concerned that communities in Maine will no longer have access to this critical stream of funding.”
Below is the text of a letter sent to Senator Kent Conrad, Chairman and Senator Judd Gregg, Ranking Member of the Senate Budget Committee:
Dear Chairman Conrad and Ranking Member Gregg:
As you near consideration of the fiscal year (FY) 2008 Budget Resolution, we urge the Budget Committee to oppose the President’s budget proposal to cut funding for the Community Development Block Grants (CDBG) Program by $735 million (20 percent) from the $3.710 billion enacted in FY07. Instead, we urge you to maintain the Federal government’s commitment to community development programs at the Department of Housing and Urban Development (HUD) and support a budget allocation of $4.1 billion in Function 450 for CDBG.
CDBG is the centerpiece of the Federal government’s efforts to help more than 1,100 entitlement cities, urban counties, and States meet the needs of low- and moderate-income communities. The CDBG program is one of the most effective Federal domestic programs to revitalize communities with proven results. It helps to fund a wide range of activities, including homeownership assistance, housing rehabilitation, public improvements, public services, and economic development projects. According to HUD, over 95 percent of FY06 CDBG funding went to activities principally benefiting low- and moderate-income persons. In addition, CDBG housing projects assisted 179,385 households in FY06, including financial assistance to new homeowners and rehabilitation assistance to the elderly and other existing homeowners. In addition, the program helped create and retain 55,957 jobs in FY06 and provided vital public services to over 11 million persons.
We are very concerned about the impact past cuts have had on the program and the continued impact the proposed cuts will have on the communities that rely on this funding to serve their most vulnerable residents, principally low- and moderate-income persons. The CDBG formula allocation was funded at $4.41 billion in FY 01. Since then the formula allocation has decreased by $670 million – or approximately 15 percent – with a five percent cut in FY05 and a 10 percent cut in FY06. The FY08 HUD budget would reduce the formula funding by another 20 percent, cutting the formula allocation by almost 35 percent in just five years. Because of the cuts to the formula allocation, programs and projects funded by CDBG, and the number of residents served by these activities, have been cut too. A survey prepared by the CDBG Coalition in March 2006 found that the impact of the program cuts have been devastating. The survey asked CDBG grantees to provide projections of what they will be able to achieve with their reduced FY06 formula allocations as compared to the results they achieved using their FY04 allocations. A total of 351 grantees (out of over 1,100 grantees) responded to the survey with the following results:
- 5,588 fewer businesses to be assisted; 14,881 fewer jobs to be created; 3,345 fewer jobs to be retained
- 5,843 fewer households to be assisted through homebuyer assistance
- 5,064,408 fewer low- and moderate-income persons to be served
- 255,569 fewer elderly persons to be served
- 391,823 fewer children and youth to be served; and
- 196,150 fewer homeless persons to be served
Communities will continue to experience setbacks with a decline in funding for the CDBG formula allocation. Therefore, we urge you to increase the allocation for Function 450 in the FY08 Budget Resolution to accommodate $4.1 billion for CDBG during the appropriations process. We appreciate your attention to this matter of mutual concern.
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