Save America's Communities Coalition

Madam President, let me express my thanks to my colleague from Maryland, Senator Sarbanes, for his work on this issue and for his leadership in the Senate. We serve together on the Foreign Relations Committee. It is a great honor. He brings great compassion, great respect, great dignity to the committee, to the institution, and his service is greatly appreciated. It is my honor as a relatively new Senator to be working on an issue that is so important to him as it is to me and to the folks I represent, both as a Senator from Minnesota, but as I represented as mayor in the city of St. Paul.

My amendment is simple. It says no cuts to the Community Development Block Grant Program. It says no moving CDBG, no to program changes that limit CDBG’s effectiveness.

I share the President’s goal of reducing the deficit and bringing fiscal accountability to Washington. But like so many things in Washington, the devil is in the details. In the case of CDBG, the details in the budget need to be reworked quite a bit.

I have a simple philosophy: Don’t kill those things that build the economy and help cut deficits. I strongly supported tax cuts that create investment and grow jobs. CDBG grows jobs. community development block grants grow communities.

When I talk to the folks back in Minnesota, whether they are city administrators or mayors or county commissioners, they all say the same thing: The Community Development Block Grant Program is the lifeblood of community development. That is why I am offering this amendment to fully fund CDBG along with the Community Service Block Grant Program, the Brownfield Redevelopment Program, and the Rural Housing and Economic Development Program, to name a few. These are things that work. Let’s change and reshape things that do not work. But when you go home and folks say across the board—big town, small town, urban, rural—that it works, work with it.

CDBG was enacted in 1974 and has been assisting America’s communities for 30 years. It is a program that helps State and local government tap their most serious community development challenges, including infrastructure, housing, and economic development. Over the first 25 years, it has created 2 million jobs and contributed in excess of $129 billion to the Nation’s gross domestic product.

CDBG and public-private partnerships are the cornerstone of the economic revitalization across the country and in many of our cities in recent years. They have provided the tools to provide economic opportunity and hold jobs.

When you deal with the budget, there is a question of fiscal responsibility. Does the program work? Fair question. Is it cost effective? Fair question. What does it achieve?

I know CDBG works because when I was mayor, before coming to Washington, I worked with it. In coming here, my hope was to be Minnesota’s mayor in Washington. I always take pride in the fact that a mayor’s focus is on getting things done. They are at the bottom of the political food chain but really responsive. That was the bottom line. It was getting things done. If streets were unplowed in the city of St. Paul, I heard about it. So as a former mayor I know something about fiscal responsibility, about having to reduce needless bureaucracy, about turning deficits into surpluses, and setting money aside for a rainy day, all while submitting budgets that contained no tax increases in 8 years. Part of my ability to do that was the growth I saw in my communities and the public-private partnerships that CDBG created and shaped and was a part of. Community centers and crime prevention, affordable housing, and business and economic development—the heart and soul of Federal help to our cities.

The Presiding Officer serves the great State of Alaska, which has challenges. They are not awash in a surplus of cash. The Presiding Officer understands, as I understand, we have to support those things that grow our communities.

The fact is, jobs in St. Paul’s economy have not grown without CDBG. We used CDBG to revitalize neighborhoods, and it is through this effort we were successful.

I can personally testify that dollar for dollar there is no better initiative to help States and localities renew and rebuild our cities and create economic growth and jobs than the Community Development Block Grant Program.

As Minnesota’s mayor in Washington, I still believe that Government is beholden to the people; that individuals, with the help of their local representatives, can plan their lives better than bureaucrats in some distant capital.

That is what I like, and the idea behind CDBG, a very conservative idea that we should not have 1,500 command and control programs rush out of Washington trying to micromanage the needs of communities. Instead, we should help communities meet those needs and priorities through one block grant. With all the unfunded mandates coming from Washington, CDBG is a way we help communities across the country meet some very critical priorities. CDBG is a fiscally responsible program that exponentially produces more than it costs and is a truly conservative initiative enabling local leaders to meet local needs.

CDBG works. Last year, the Office of Management and Budget celebrated CDBG under the theme “performance counts.” Since then, the Office of Management and Budget may have changed its mind, but America hasn’t.

Let me state what CDBG means to my home State in Minnesota. When I became mayor of St. Paul, we got businesses and jobs growing. But not all St. Paul was benefiting from the turnaround. An area around Ames Lake on the east side of St. Paul, one of my toughest neighborhoods, needed help, needed growth. They could not take part in the surrounding economic boom because the buildings were in total disrepair and businesses were looking to move out, not move in. It would have been an impossible situation if not for CDBG. But thanks to CDBG, we were able to leverage Federal funds to attract millions of private dollars to improve infrastructure and replace the blight of city sprawl with green space, and build a community center to keep kids off the street.

I was at the League of City meetings the other day and talking to the member who represents the east side of St. Paul. In that community, they had a shopping center that was blighted, with nothing there. Reeds grew up through the concrete. We figured out the Good Lord was saying there was a wetland in the heart of the city. We got rid of the shopping center, got rid of the concrete, and created wetlands. Now he is telling me we have housing in the worst areas of St. Paul; the most blighted areas are growing and prospering. Again, CDBG was an important part of it.

In other words, thanks to CDBG, Ames Lake is now moving in the right direction. St. Paul is located within Ramsey County. And like all counties with a big city, Ramsey County struggles with sort of a split identity. On one hand, it has suburbs that are doing well compared to parts of the big city. Within the city is land intense with industrial projects such as car parks and truck sites that big cities need. Now these projects are great to have when they are up and running, but when they shut down, they are so large they take whole communities with them that is happened with the Glendenning Truck site.

It was in bad condition, and local officials knew something had to be done about it. Using CDBG, they were able to replace a dilapidated truck site with thriving businesses and jobs.

Ramsey County also used CDBG to transform the Vadnais Highlands apartment complex into safe, attractive and affordable housing.

I give another example of how community development becomes economic development. There is a town of 502 people in Minnesota called Brewster. In 1997, Brewster was awarded a one time Community Development Block Grant. This grant allowed Brewster to renew and rejuvenate its infrastructure by tearing down its dilapidated structures and replacing them with 40 homes. As a result of this investment, when Minnesota Soybean Processors was looking for a new home, there was no better place than Brewster.

The relocation of Minnesota Soybean Processors immediately created 40 jobs. In fact, that CDBG grant is still creating jobs as Minnesota Soybean Processors are now opening a biodiesel division which will employ 10 more people.

In another example, the city of Rochester, MN, used CDBG to fund the Aldrich Memorial Nursery School, providing pre-school kids with a safe place to be while mom and dad are working.

The city of Minneapolis uses CDBG to improve housing, stimulate job growth, improve public infrastructure, provide public health services, and school readiness programs.

A reduction in CDBG could hinder the city’s current efforts to help 200 moms and dads to find jobs; efforts to develop 150 multifamily homes; efforts to acquire and demolish 110 vacant and boarded up houses; efforts to provide capital improvements to child care facilities, and efforts to reduce lead hazards in 70 homes and provide youth employment training to 300 kids. That is a lot of bang for the buck.

Minneapolis is a big city, but community development block grants are just as important to our rural communities. As you may know, America’s rural communities often lack the resources to improve their infrastructure and housing.

The town of Detroit Lakes is located in Becker County, MN, and has about 7,500 residents. It is the heart of Lake Country in the land of 10,000 lakes. If you have not visited there, you should. Spend some money there while enjoying the lakes. The beach is right in town. At 119 Pioneer Street is the Graystone Hotel.

Built in 1916 to accommodate the region’s growing tourism industry, the Graystone Hotel had since fallen on hard times. Its once grand exterior had degenerated into an unsightly mess, and its rooms all but abandoned. In short, what was once one of Detroit Lakes’ flagship buildings, was now its biggest detraction.

Using CDBG along with private funding, the Graystone Hotel now includes 41 residential units and a variety of businesses and nonprofit enterprises ranging from Lakeland Medical Health Center to Godfather’s Pizza.

St. Louis County, which is located in northern Minnesota and is one of the more rural areas in Minnesota, has also used CDBG. Since 1993, CDBG has helped create 560 jobs in St. Louis County; it has provided 2,900 residents of St. Louis County with business training resulting in 159 new start-up businesses; 450 homes were improved through local housing rehabilitation programs in the county.

Hundreds of first-time home buyers participated in a first-time home buyer program, resulting in the purchase of 600 single family homes.

In St. Louis County, CDBG also helps fund community soup kitchens, emergency shelters, child daycare projects, programs combating domestic violence, and a number of infrastructure improvements such as the water treatment facility in Aurora. St. Louis County has been able to leverage $5 in private dollars for every dollar they received through the CDBG program.

CDBG works, but don’t take my word for it, just 1 ask the folks in Detroit Lakes, St. Paul, or St. Louis County.

I was pleased to work with Senator PATRICK LEAHY in leading a bipartisan coalition of 57 Senators in sending a message to the Senate Budget Committee signifying our strong commitment to CDBG and reminding folks that cities from Montpelier to Minneapolis need CDBG to create economic opportunity and to grow jobs.

There being no objection, the material was ordered to be printed in the RECORD, as follows:

U.S. SENATE,

Washington, DC, March 2, 2005.

Hon. Judd Gregg,
Chairman, Committee on the Budget,
U.S. Senate, Washington, DC.

Hon. Kent Conrad,
Ranking Member, Committee on the Budget,
U.S. Senate, Washington, DC.

DEAR CHAIRMAN GREGG AND RANKING MEMBER CONRAD:

The Community Development Block Grant (CDBG) Program funds housing rehabilitation, supportive services, public improvements and economic development projects in communities across the nation. CDBG serves more than 1,100 entitlement communities, urban counties and states, and more than 3,000 rural communities. We urge the Budget Committee to maintain the Federal government’s current commitment to community development programs at the Department of Housing and Urban Development and support a budget allocation of $4.732 billion in Function 450 for CDBG, Section 108 economic development loan guarantees, and the Brownfields Economic Development Initiative.

HUD is the Federal Department principally responsible for community economic development. CDBG is the centerpiece of the Federal government’s efforts to help states and localities meet the needs of low-income communities. Section 101 of the Housing and Community Development Act created the CDBG program to consolidate a number of complex and overlapping programs of financial assistance in order to encourage community development activities which are consistent with comprehensive local and areawide development planning; to further the national housing goal of a decent home and a suitable living environment for every American family; and to foster the undertaking of housing and community development activities in a coordinated and mutually supportive manner by Federal agencies and programs, as well as by communities. HUD’s community development programs coupled with HUD’s housing and homeless programs and supportive services, provide communities with a comprehensive approach to serving the needs of residents. CDBG is the glue that holds other Federal programs serving low-income communities together.

The Strengthening America’s Community proposal aims to create strong accountability standards, offer flexibility to communities and create a more unified federal approach. These goals are already hallmarks of the CDBG program. On the 30th Anniversary of CDBG in 2004, HUD Deputy Secretary Roy Bernardi said the following about the program:

“HUD has a long history of ‘being there’ and providing help for people, particularly those with the greatest needs—our lower income constituents. CDBG has certainly been there, during boom years and most importantly in times of tightening budgets, which place greater demands on existing services. We must continue to support and build upon programs that work, those that have a proven record of flexibility and the ability to fit in with locally determined needs. CDBG is such a program and ranks among our nation’s oldest and most successful programs. It continues to set the standard for all other block grant programs.”

The Strengthening America’s Communities proposal would recreate a block grant program similar to CDBG within the Department of Commerce. The Department of Commerce, however, does not have the vital infrastructure or institutional capacity to provide a comprehensive approach to neighborhood development. Replicating HUD’s CDBG program within the Department of Commerce would require rebuilding HUD’s “infrastructure” and would result in inefficiencies, greater complexity and less aid to fewer cities, an approach which does not serve America’s communities or taxpayers. CDBG’s success depends on a locally driven, citizen participation process that provides flexibility and does not take a “one-size-fits-all” approach. The needs of Nashua, New Hampshire; Bismarck, North Dakota; Cincinnati, Ohio; and Kansas City, Missouri are very different from the needs of Miami, Florida; El Paso, Texas; Pueblo, Colorado; or San Diego, California. CDBG is capable of addressing the diverse needs of these communities whether it is housing rehabilitation, homeownership, supported services for the elderly or children, business development or infrastructure improvements.

CDBG is one of the most effective Federal domestic programs to revitalize neighborhoods with proven results. Over 95 percent of CDBG funds went to activities principally benefiting low- and moderate-income persons. Twenty-eight percent of CDBG funds supported housing activities in distressed communities, 24 percent supported public improvements, 15 percent went to the provision of public services, and 7 percent supported economic development activities. In FY2004, CDBG housing projects assisted 168,938 households. Public service projects funded with CDBG served 13,312,631 individuals. Economic development programs funded by CDBG in fiscal 2004 created or retained 90,637 jobs for Americans and public improvement projects benefited 9,453,993 persons. CDBG also has a strong record in business retention: CDBG ensured that over 80 percent of the businesses assisted through the program were still in operation after three years.

Thank you for your consideration. We look forward to working with you to ensure that communities across the country can provide good jobs, affordable housing, and public services to meet the needs of all Americans.

Sincerely,

Norm Coleman, Patrick J. Leahy, Jack Reed, Mike DeWine, Evan Bayh, Edward M. Kennedy, Jeff Bingaman, Rick Santorum, Carl Levin, Jon S. Corzine, Christopher S. Bond, Paul S. Sarbanes, Barbara Mikulski, George V. Voinovich, Debbie Stabenow, Frank R. Lautenberg, Olympia J. Snowe, Charles E. Schumer, Lincoln Chafee, Herb Kohl, Christopher J. Dodd, Mel Martinez, Joseph I. Lieberman, Byron L. Dorgan, John F. Kerry, Mary L. Landrieu, Richard Durbin, Kay Bailey Hutchison, Hillary Rodham Clinton, Max Baucus, Arlen Specter, Tom Harkin, Conrad R. Burns, Barbara Boxer, David Vitter, Tim Johnson, Mark Dayton, Jim Talent, Ken Salazar, Bill Nelson, Ron Wyden, Daniel K. Akaka, Maria Cantwell, Gordon Smith, Patty Murray, Russell D. Feingold, Barack Obama, Dianne Feinstein, John D. Rockefeller IV, James M. Jeffords, Blanche L. Lincoln, Joseph R. Biden, Mark Pryor, E. Benjamin Nelson, and Thomas R. Carper.

Mr. COLEMAN. I also ask unanimous consent to have printed in the RECORD a letter of support for the Community Development Block Grant program from the U.S. Conference of Mayors, the National Governors Association, the National Community Development Association, National Association of Counties, the National League of Cities, the Council of State Community Development Agencies, the Local Initiatives Support Corporation, the Enterprise Foundation, the National Association of Housing and Redevelopment Officials, the National Association of Local Housing Finance Agencies, the National Council of State Housing Agencies, and the National Congress for Community Economic Development.

There being no objection, the material was ordered to be printed in the RECORD, as follows:

March 4, 2005.

Hon. JUDD GREGG,
Chairman, Committee on the Budget, U.S. Senate, Washington, DC.

Hon. KENT CONRAD,
Ranking Member, Committee on the Budget, U.S. Senate, Washington, DC.

DEAR CHAIRMAN GREGG AND RANKING MEMBER CONRAD:

As you prepare to consider the FY 2006 Budget Resolution, we the undersigned organizations want to convey our opposition to proposed cuts in the FY 2006 Department of Housing and Urban Development (HUD) budget. We respectfully request that you craft a Budget Resolution that will provide adequate budget authority for all HUD programs and maintain important community and economic development functions and funding at HUD.

Of particular concern to us is the proposed elimination of the Community Development Block Grant (CDBG) program along with 17 other Federal community and economic development grant programs. We oppose in the strongest terms the elimination of CDBG, and we urge you to reject the proposed “Strengthening America’s Communities” (SAC) Initiative and support full funding for the CDBG program at HUD.

As you know, the FY 2006 Budget would effectively eliminate 18 community and economic development programs, including CDBG, and create an entirely new initiative to be operated by the Department of Commerce. Proposed funding for this “consolidated” program would be $3.7 billion, and 35 percent reduction in funding when compared to total FY 2005 appropriations for the 18 programs targeted for elimination under the initiative. Consider that Congress funded the CDBG program alone at $4.7 billion in FY 2005, $1 billion more than the entire proposed budget for the SAC initiative.

Eliminating these 18 programs and substantially reducing the Federal investment in community and economic development would have a devastating impact on State and local governments. Each of these existing programs is an important and necessary component of urban, suburban, and rural communities’ efforts to revitalize neighborhoods, expand affordable housing opportunities and create economic growth. We believe that CDBG is the glue that holds these efforts together.

For 30 years, the CDBG program has served as the cornerstone of the Federal government’s commitment to partnering with state and local governments to strengthen our Nation’s communities and improve the quality of life for low- and moderate-income Americans. Since its inception, CDBG has made a real and positive difference in communities across America, and there is no shortage of CDBG success stories. Many of the groups that signed this letter have been working in partnership with HUD and the Office of Management and Budget (OMB) in a good faith effort to improve the CDBG program’s ability to measure performance. As a result of this effort, HUD plans to unveil a new outcome-based measurement system in early 2005. As recently as November 2004, OMB endorsed this undertaking. We believe this new system will verify what is already obvious: CDBG works.

CDBG’s emphasis on flexibility and local determination of priority needs through citizen participation is allowing state and local governments to achieve real results. According to HUD’s “Highlights of FY 2004 CDBG Accomplishments,” CDBG funding led to the creation or retention of more than 90,000 jobs in the last year alone. Thanks to CDBG, in 2004 over 130,000 rental units and single-family homes were rehabbed, 85,000 individuals received employment training, 1.5 million youth were served by after-school enrichment programs and other activities, and child care services were provided to 100,065 children in 205 communities across the country. CDBG also funded nearly 700 crime prevention and awareness programs. Additionally, more than 11,000 Americans became homeowners last year thanks to CDBG funding. CDBG remains a smart, efficient form of investment, as it continues to leverage around three dollars for every dollar of Federal investment. It certainly did not come as a surprise to us when HUD Secretary Alphonso Jackson, in a March 2nd appearance before the House Financial Services Committee, stated, “The program works.”

The CDBG program’s design is especially successful at targeting resources to those who need them most. In 2004, 95 percent of funds expended by entitlement grantees and 96 percent of State CDBG funds expended were for activities that principally benefited low- and moderate-income persons. A full half of persons directly benefiting from CDBG-assisted activities were minorities, including African Americans, Hispanics, Asians, and American Indians. Despite the fact that economic challenges and pockets of poverty exist in almost all American communities, adoption of the SAC initiative would almost certainly result in a complete loss of funding for a significant number of communities.

For all of the reasons detailed above, we believe that CDBG should remain at HUD and receive full funding of at least $4.7 billion in FY 2006. We also believe it is premature for the Budget Resolution to even address such a far-reaching change to the program before the numerous committees of jurisdiction have had sufficient opportunity to hold appropriate hearings on the topic. We urge you to craft a Budget Resolution reflecting those sentiments. More specifically, we strongly encourage you to include language in your Resolution clearly stating that the Resolution “does not assume enactment of the proposed ‘Strengthening America’s Communities’ Initiative nor the proposed reduction in funding for the CDBG program included in the Administration’s FY 2006 budget.”

We thank you for your favorable consideration of this request.

Sincerely,
Council of State Community Development Agencies.
The Enterprise Foundation.
Habitat for Humanity International.
Housing Assistance Council.
Local Initiatives Support Corporation.
National Association for County Community and Economic Development.
National Association of Counties.
National Association of Housing and Redevelopment Officials.
National Association of Local Housing Finance Agencies.
National Community Development Association.
National Conference of Black Mayors.
National League of Cities.
National Low Income Housing Coalition.
United States Conference of Mayors.

Mr. COLEMAN. I urge my colleagues to adopt my amendment and show their support for these community leaders by fully funding the