As Congress ponders the fate of the Community Development Block Grant (CDBG) and other vital economic development tools, the National League of Cities continues to vigorously advocate saving the programs from budget cuts and reorganization that could weaken their effectiveness.

President Bush has proposed that the fiscal year 2006 budget combine CDBG and 17 other programs important to municipal economic and community development efforts into one package called the Strengthening America?s Communities Initiative. The combined program would have a budget of $3.7 billion, nearly $1 billion less than the budget for CDBG in FY 05.

The new program would be administered by the Department of Commerce.

Mobilizing against the administration?s proposal, NLC First Vice President James Hunt, councilman from Clarksburg, W.Va., will testify before the House Government Reform Subcommittee on Federalism and the Census on March 1.  Representative Michael Turner (R-Ohio), a former mayor of Dayton, Ohio, chairs the subcommittee.

Hunt, whose city has used CDBG funding to remove dilapidated housing and build retail and small businesses, is expected to tell the subcommittee that the President?s proposal is counterproductive to assisting low- and moderate-income neighborhoods, that it will take flexibility away from local governments and make the program less effective, that the new eligibility requirements for Strengthening America?s Communities would fail to meet the needs of low- and moderate-income communities and that CDBG should remain a distinct program funded at its FY05 level.

Hunt was briefed about the President?s proposal by NLC staff who participated in a listen-only phone conference with members of the Administration?s staff who developed the Strengthening America?s Communities Initiative.

During the conference call, Administration officials said the new combined program would include two parts.

The first part would receive the majority of funding for formula-based grants for cities that meet eligibility requirements.
The second part would be distributed to what the Administration terms ?Development Ready? communities that would demonstrate they are ready for development based on a series of goals related to the No Child Left Behind Act, education reform, reducing barriers to business creation and housing development and reducing violent crime rates.

Assisting NLC in its efforts to save CDBG is a ?Dear Colleague? letter being circulated in Congress by senators and representatives who do not agree with the Bush proposal.

The letter states that CDBG is the centerpiece of the federal government?s efforts to help local governments and states meet the needs of low-income communities.

?It serves more than 1,100 entitlement communities, urban counties and states, and more than 3,000 rural communities. CDBG is one of the most effective Federal domestic programs to help revitalize neighborhoods with proven results,? the letter says.

Senators George Allen (R-Va.), Max Baucus (D-Mont.), Jeff Bingaman (D-N.M.), Christopher Bond (R-Mo.), Barbara Boxer (D-Calif.), Hillary Clinton (D-N.Y.), Norman Coleman (R-Minn.), Jon Corzine (D-N.J.), Mike DeWine (R-Ohio), Christopher Dodd (D-Conn.), Byron Dorgan (D-N.D.), Richard Durbin (D-Ill.), Tom Harkin (D-Iowa), James Jeffords (I-Vt.), Edward Kennedy (D-Mass.), John Kerry (D-Mass.), Herb Kohl (D-Wisc.), Mary Landrieu (D-La.), Frank Lautenberg (D-N.J.), Patrick Leahy (D-Vt.), Carl Levin (D-Minn.), Joseph Lieberman (D-Conn.), Barbara Mikulski (D-Md.), Jack Reed (D-R.I.), Paul Sarbanes (D-Md.), Charles Schumer (D-N.Y.), Debbie Stabenow (D-Mich.) and George Voinovich (R-Ohio) have already signed the letter.