Federal Cuts to Community and Economic Development Funding: Impact on Infrastructure

Sept. 2, 2005

This page indicates the potential impact of cuts in community and economic development funding to selected cities.

The President's budget request for fiscal year 2006 proposes eliminating 18 different community and economic development programs and replacing them with one program called the 'Strengthening America's Communities Grant Program.' The largest program to be eliminated under this proposal would be the Community Development Block Grant (CDBG) which currently awards $4.7 billion in support for community development to cities, counties and states across the country. The budget proposal would reduce total community and economic development funding by $1.6 billion, or 30 percent.

The table below shows how selected cities and counties might be impacted by these proposed cuts in community development. In fiscal year 2005, cuts already impacted communities as total funding for CDBG was reduced by nearly 5 percent. If the proposed cuts are distributed equally, the table indicates how much would be lost. The budget proposal states that it would re-focus funding to the most economically-distressed areas. However, the new program would require goals to be met for commercial development, private sector investment and job creation. Communities not meeting the goals would lose funding. 'Bonus' funding would be received only by cities and towns that reduce regulation of business, reduce crime and meet progress goals of the No Child Left Behind Act.

Place CDBG '05 Nominal Cut in '05 Possible Losses '06
Little Rock, AR $1,911,383 -$111,617 -$576,855
Los Angeles, CA 82,783,415 -4,641,444 -24,984,034
Oakland, CA 9,511,930 -449,070 -2,870,700
San Francisco, CA 24,137,382 -1,119,618 -7,284,662
Santa Rosa, CA 1,446,939 -85,061 -436,686
Sonoma County, CA 2,295,165 -139,835 -692,681
Denver, CO 10,511,835 -513,165 -3172,472
Hartford, CT 4,409,509 -262,491 -1,330,790
New Britain, CT 2,140,918 -125,082 -646,129
Hillsborough County, FL 6,726,087 -347,913 -2,029,933
Pasco County, FL 2,815,360 -119,640 -849,676
Pinellas County, FL 3,493,162 -207,838 -1,054,236
Palm Beach and Broward County, FL 27,766,035 -1,498,965 -8,379,789
Atlanta, GA 10,681,626 -602,374 -3,223,715
Chicago, IL 95,490,820 -5,361,180 -28,819,129
New Orleans, LA 17,126,719 -944,281 -5,168,844
Boston, MA 23,062,500 -1,202,500 -6,960,263
Detroit, MI 43,322,807 -2,506,193 -13,074,823
Kalamazoo, MI 2,056,687 -109,313 -620,708
New York City, NY 207,194,963 -11,640,037 -62,531,440
Cincinnati, OH 15,288,842 -814,158 -4,614,173
Cleveland, OH 27,429,753 -1,597,247 -8,278,299
Columbus, OH 7,397,066 -422,934 -2,232,435
Multnomah County, OR 339,653 -20,347 -102,507
Austin, TX 8,476,947 -490,053 -2,558,343
Seattle, WA 14,038,888 -764,112 -4,236,936
Milwaukee, WI 19,617,242 -1,098,758 -5,920,484

CDBG amounts for FY04 and FY05 are from the Deparment of Housing and Urban Development and local amounts do not include any funding received through the state-level CDBG program.

Possible cuts for FY06 are based on assuming the 30% cut is applied across the board to all communities currently receiving CDBG money. The projected cuts do not take into account potential losses from other programs that are being eliminated such as Brownfield Economic Development Initiative or Community Services Block Grant Program. According to the FY2006 budget request, poor communities could receive more funding through the 'Stregthening America's Communities Grant Program' than they received in CDBG money. However, given the size of the reduction in community and economic development funding, and the new goals set around obtaining private investment and commercial development, it is quite likely that few communities if any will benefit.