Community Aid Grants May Face Changes
Thursday, May 25, 2006; 6:43 PM
WASHINGTON -- The Bush administration wants to impose new requirements on cities for them to continue receiving federal grants used for needs ranging from low-income housing to new fire trucks.
The Housing and Urban Development Department proposed new standards Thursday that would require cities to meet goals for development and eliminating blight to continue receiving Community Development Block Grants. The standards were part of a series of changes HUD wants Congress to make to the program.
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The nation's mayors and their allies in Congress have repeatedly blocked Bush's attempts to cut funding for the grants, which are heavily relied upon by cities. Local governments have great flexibility on how they spend the money, which has been disbursed under the same formula since 1978.
Rep. Michael Turner, R-Ohio, former mayor of Dayton and a staunch defender of the grants, said he is concerned that it may not be possible under the proposed changes to measure worthy uses of the aid.
In addition to penalizing communities for not meeting stated goals and changing funding formulas, HUD's proposal would remove about 300 smaller communities from direct grant funding and put them in a pool that must get its money through the state.
Rep. Bob Ney, R-Ohio, chairman of a House subcommittee that oversees HUD and housing issues, said he would take a close look at the proposal, but initially didn't like how it would affect rural housing.
"I would oppose any proposal that hurts the ability of my local officials to secure CDBG funding," Ney said.
In his 2007 budget proposal, President Bush recommended cutting the grants from $3.7 billion to less than $3 billion a year.
"The decades-old formula increasingly distributes funding in a distorted way," HUD Assistant Secretary Darlene Williams said Thursday. "Yes, the current formula, on average, still targets funds to the neediest communities, but much less so than it did in the 1970s."
Some of the neediest communities are underfunded, some of the least needy recipients get more than their fair share, while cities with similar needs get different amounts of aid, a 2005 HUD analysis showed.
There are two funding formulas, and a community can use the one that gets it the most aid. HUD proposes eliminating one formula that measures the age of housing stock without considering the level of poverty, a measurement that has rewarded some affluent towns because they have older houses.
High-need cities like New York or Compton, Calif., now get fewer dollars per resident than areas such as Tonawanda Township, N.Y., which HUD scores in its second-lowest need category. HUD's proposed changes would reverse that, while bringing per-capita funding for similar cities like Detroit and St. Louis in line. Currently, St. Louis gets 37 percent more per resident than Detroit.
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