Shrinking Community Grants Put Cities In A Crunch

Budget cuts approved by Congress in the past two years are trickling down to local communities, and officials there are not happy. They say that reductions in community development block grants will hurt the nation's most vulnerable neighborhoods.

Two years ago, the federal government gave out about $4 billion in such grants to low- and moderate-income communities. This year, the figure is $3 billion — a 25 percent cut. And as that pie has shrunk, those whose slices have shrunk even more are hungry for answers.

"We feed over 1,000 people a day," says Angela Vazquez, who is with Southwest Social Services in Miami, which gets community development block grant funds. "These are our grandparents, the people who built the community." She told city commissioners last week that a potential cut of almost $40,000 for the group's community centers would be devastating for people who have nowhere else to go. "You will condemn people to four walls and declining health," she says.

Like other cities, Miami isn't getting the money it used to — not even a year ago. The city has been told that its CDBG funding this year will be cut by more than a third, to less than $5 million. In nearby Hialeah, funding is down 47 percent. And Allentown, Pa., is getting $2 million this year, a cut of more than 20 percent.

"Incredibly shortsighted, as far as I'm concerned," Allentown Mayor Ed Pawlowski says. It might not seem like a lot of money in Washington, he says, but for Allentown, it's a big deal. He says the city needs the money to help provide social services and to maintain neighborhoods suffering from a lot of foreclosures.

"It's going to be tough," Pawlowski says. "I mean, we're going to have to cut funding for agencies like our ESL programs and our after-school programs and other initiatives that have utilized CDBG funding. We're going to have to curb back or dramatically reduce, or maybe even eliminate, some of our blight-remediation programs." And, he says, he's confused by the cuts because the city's poverty rate has grown and so has its population.

Renena Smith, assistant city manager in Fresno, Calif., was also surprised to see that her allocation was cut by more than 30 percent from two years ago.

"We are considered, you know, one of the highest regions for concentrated poverty," Smith says. "So from that aspect, I was struggling to understand how the calculation was made."

Housing and Urban Development Assistant Secretary Mercedes Marquez oversees the program in Washington, D.C. "Why they're seeing such a big drop this year is because there have been two years of cuts," she says.

Marquez says there's less money to go around because of last year's budget battle in Washington. And she says HUD is required by law to hand out the remaining money using a complicated formula. It looks at a city's needs, relative to the rest of the country, so she says there are bound to be winners and losers.

"Poverty has gone up all across the country," Marquez says. "And so while in some of these places they also saw an increase, actually it's much less in relationship to how poverty grew in all metro areas across the country."

But some local officials think there's something else going on. They note that for the first time this year, HUD is using different housing data from the census and they say this has skewed the results.

Frederick Marinelli, director of grants and human services for the City of Hialeah, says the new census data show that his entire county, Miami-Dade, has about 25,000 overcrowded housing units.

"I can tell you Hialeah alone has that, at least, which is approximately a third of our housing units," Marinelli says. "So it doesn't make sense."

He notes that areas with large Hispanic populations like his appear to have been hit the hardest by the cuts. He speculates that some of those residents were afraid to tell census takers how many people were living under the same roof. "Something is off and that's what we need to get to the bottom of," Marinelli says.

HUD's Marquez says she's confident the numbers are good. But Marinelli and other local officials say they'll fight the cuts. It might be too late, though. The focus in Washington is already on next year's budget and efforts to keep the program from shrinking even more.

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