U.S. mayors descended on Washington this week to combat the budget cuts approved by the House last week that would threaten certain federal programs for local governments, especially the community development block grant program.
A bipartisan group of 30 mayors, representing the U.S. Conference of Mayors, told reporters Thursday that they are appealing to the Senate to restore a proposed 62.5% cut in federal funding for the CDBG program. The program received $3.99 billion for fiscal 2010, but the continuing resolution for fiscal 2011 that was approved by the House last week would cut the program to $1.5 billion.
The mayors said such a cut in the program would affect the most vulnerable Americans and is fueled by political rhetoric.
Michael Nutter, mayor of Philadelphia, called the proposed cut "outrageous" and "literally un-American."
The "only hope is in the Senate," which can prevent the cuts from becoming law, said Elizabeth Kautz, the mayor of Burnsville, Minn., and the president of the U.S. Conference of Mayors. She said the program "has had bipartisan support" in Congress.
Mick Cornett, the mayor of Oklahoma City and the president of the Republican Mayors Association, said members of Congress are "lame" to say the CDBG program needs to be cut to rein in the federal deficit.
"This is about priorities and the priorities need to be about the economy," Cornett said. If Congress approves the CDGB cut, "then they have lost their sense of priority," he added.
The CDBG funds, initially approved by Congress in 1975, have come under pressure from federal budget hawks before. Tom Cochran, the Conference of Mayors chief executive officer, said the program faced budget cuts during the Reagan and first Bush administrations. But this time around, the threat to the program "is more serious," he said.
The program provides local governments with flexibility for spending programs in middle- to lower-income neighborhoods. It allows local governments to leverage an additional $1.62 for every dollar received in CDBG funds, according to the National League of Cities.
The mayors, the NLC and the National Association of Counties are working together to push for the full funding of the CDBG program in fiscal 2011 and 2012.
Michael Wallace, a principal associate at the NLC, said Thursday that he is optimistic the CDBG funding can be put back in the fiscal 2011 budget.
"We anticipate the Senate is going to do its own thing," he said, noting that the CDBG funds have helped local governments fill budget gaps during the economic downturn.
President Obama's fiscal 2012 budget requests a $300 million cut to the CDBG program. The mayors said they are not pleased with the proposal, but that first they need to address the much larger House-proposed cut for fiscal 2011.
The program reduction could affect financing deals that combine CDBGs with local general obligation and revenue bonds, the mayors said.
Louisville, Ky., expects to use $100 million of CDBG funds, in addition to $45 million of general obligation bonds, $15 million of revenue bonds, and private funds to finance construction of a $465 million, 62-story skyscraper.
In November, Rep. John Yarmuth, D-Ky., announced the Department of Housing and Urban Development was "optimistic" the CDBG grant would be approved. The skyscraper program, known as Museum Plaza, could generate 2,300 permanent jobs, Yarmuth said in a statement. But the funds still have not been approved.
The mayors also criticized other House spending cuts. The proposed elimination of $1 billion in fiscal 2011 for high-speed rail projects would take money away from 54 projects in 23 states, they said. The elimination of $600 million for the Transportation Investment Generating Economic Recovery, or TIGER, grants, would threaten 75 projects in 40 states, they added.
