HUD CDBG: FY2013 Appropriations Update

Posted on: July 13th, 2012 by NADO Admin

HUD COMMUNITY DEVELOPMENT BLOCK GRANTS

RETAIN FUNDING FOR LOCAL DEVELOPMENT AND INFRASTRUCTURE PROJECTS

ACTION NEEDED: Urge your members of Congress, especially those serving on the House and Senate Appropriations Subcommittees on Transportation, Housing and Urban Development and Related Agencies (T-HUD), to support the HUD Community Development Block Grant (CDBG) program as part of the final FY2013 Transportation-HUD Appropriations bill.  The members of NADO support retaining CDBG formula funds as a flexible, locally driven resource that provides valuable assistance for local community and economic development initiatives, including infrastructure and job creation projects supported by the CDBG state small cities program. 

ISSUE: The HUD Community Development Block Grant (CDBG) program continues to face cuts each year.  The program was reduced from $3.99 billion in FY2010 to $3.34 billion in FY2011 to $2.94 billion in FY2012. This continues a recent downward trend in CDBG funding since the program reached a high of $4.36 billion in FY2003.

On June 19, the House Appropriations Committee approved a FY2013 T-HUD appropriations measure (H.R. 5972) that would fund the CDBG program at $3.34 billion, approximately $400 million above FY2012 and level with the Administration’s FY2013 request.  During House floor debate of the T-HUD measure, an amendment offered by Rep. Tom McClintock (R-CA) to eliminate all funding for CDBG grants in FY2013 was soundly defeated with a 80-342 vote.

Of interest to regional development organizations, the House Appropriations Committee included report language that would examine how grantees use CDBG funds as matching dollars for other federal programs.  Specifically, the report directs HUD to detail the percentage of CDBG funds used to match other federal programs; which federal programs are being matched; the local match requirements of such federal programs; what portion of the local match requirements are being met using CDBG, by federal program; and what legal authority allows the use of CDBG as a local match, by federal program.

On April 19, the Senate Appropriations committee approved a FY2013 T-HUD appropriations measure (S. 2322) that would fund the CDBG program at $3.1 billion, approximately $150 million above FY2012 and the Administration’s FY2013 request.  It is unclear when the Senate will move the bill to the floor.

KEY TALKING POINTS:

  • CDBG is an important tool used by state and local officials as they tackle their most serious community and economic development challenges, such as providing affordable housing, upgrading and building essential public infrastructure and water systems, creating small business development loan funds for local entrepreneurs and industries, and addressing local planning and technical assistance needs.
  • At a time when local governments and communities are striving to overcome intensifying global economic competition, upgrade aging public infrastructure, and address the severe housing crisis, it is vital that federal policy makers continue to maintain support for the CDBG program.
  • The cornerstone of the CDBG program is its locally driven, flexible, and bottom-up approach.  The program provides invaluable resources for 1,180 urban counties and cities to meet locally-identified needs.  As required by law, 30 percent of CDBG formula funding is reserved for states to assist rural communities with economic development, infrastructure improvements, and other fundamental building blocks for job creation and economic development.
  • State, regional, and local officials use the CDBG program to provide valuable seed capital, gap financing, and core support for a variety of projects.  In addition, CDBG funds are typically used to leverage and attract private sector investments.  Every CDBG dollar invested in communities is leveraged, on average, by three dollars in private funding, bringing much needed business investments to distressed areas.
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