CDBG Cuts Whack Cities and Nonprofits

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May 5, 2011; Source: The Salem News | Remember when we published clips on city officials breathing a sigh of relief about the FY2011 budget deal between the White House, Senate Democrats, and House Republicans? The message was, it could have been a lot worse. It wasn’t as bad as we thought it might have been. But one of the bigger cuts in the budget deal was the 16 percent lopped off the Community Development Block Grant program, certainly less than the 62 percent extraction that House Republicans had proposed, but big nonetheless.

Now that cities have to deal with their CDBG budgets, the cascading impacts of the Washington budget deal are hitting home. Communities along the North Shore of Boston admit to “scrambling” to deal with the cuts. The city of Peabody’s CDBG allocation will decrease from $500,000 to $419,600. Salem’s CDBG program will shrink from $1.245 million to $1.04 million. It leaves Peabody, according to the city’s assistant director of planning and development, “going on a wing and a prayer.” The nine nonprofits that received $100,000 from Peabody’s CDBG program will need more than that, because they’ve been cut out of the city’s program.

Erie, Penn. is adjusting to its lower CDBG allotment by slicing off funding to the city’s community centers. Erie’s director of community and economic development advised the community centers to become “more philanthropic and creative as far as fundraising goes and more collaborative” to adjust to the cuts.

Elmira, N.Y.’s CDBG program will decrease by $244,483 to $1.23 million, “an unprecedented decrease . . . occurring at a time when investment in our city is most needed,” according to the mayor. The city will adjust by cutting funding to several nonprofits, including the Senior Center, the Economic Opportunity Program, and Catholic Charities, but street and sidewalk repairs will be untouched.

Nonprofits in Concord, Calif. will see cuts to homeless assistance groups such as the Contra Costa Crisis Center, the Food Bank of Contra Costa and Solano, SHELTER Inc., and the Monument Crisis Center. These cuts will be exacerbated by the impending reduction and eventual termination of the city’s practice of matching the CDBG grants to nonprofits with local funding.

Do you think this is bad? Just wait until the CDBG reduction in the FY2012 budget gets negotiated.—Rick Cohen

  • Denise L Harlow

    The 2011 CR was only the first hurdle. All who care about the role of nonprofits in serving our communities and their ability to maximize government funds need to be very atuned to the 2012 debate. Hard to maximize or leverage ever-diminishing resources in light of the increasing needs.

  • Jake

    Wow, they just keep cutting that CDBG budget. Yeah, doesn’t look good for 2012.