House leaders push for changes in beloved CDBG program
Gita Balakrishnan, The Times-Gazette and The Associated Press
WASHINGTON — While House leaders gently push for changes to a beloved federal grant program, the chairman of a Senate subcommittee Thursday said he’s concerned about fraudulent use of the aid and promoted the administration’s proposed changes.
The Community Development Block Grant (CDBG) program is jealously guarded by cities and counties who rely on the flexibility it gives them to use federal money to cure all kinds of local ills, from health care access problems to urban blight.
In past years, President Bush’s attempts to overhaul the grants have gained little traction in the face of heavy local government lobbying. But Sen. Tom Coburn, R-Okla., whose subcommittee oversees the program, was ready Thursday to push changes to grant distribution formulas and tougher restrictions on how the money is spent.
‘‘The lack of transparency and accountability of this program is unacceptable,’’ Coburn said.
The tenor of Senate hearings contrasted similar House hearings earlier this week. Rep. Mike Turner, R-Ohio, the former mayor of Dayton, has warned mayors that the grants require some changes and he welcomed some of the same witnesses to his House committee to tout their proposals.
But Turner said he didn’t like how the Department of Housing and Urban Development’s planned changes to the grant formula would shift funds from the Midwest and Northeast to the faster-growing, newer communities of the South and Southwest. Turner’s hometown of Dayton stands to lose more than $1 million a year under HUD’s proposal.
In a phone interview with the The Times-Gazette, Turner added that in aggregate, the state of Ohio could potentially lose more than $11 million if the proposed changes were to pass.
“That would impact the state’s ability to provide grants to rural areas, and it would impact urban areas that currently receive the (CDBG) funds directly,” Turner said. “When you have $11 million less in the state of Ohio to use for community and economic development, it has an impact on our ability to continue to grow and to address community development issues. There are ways that CDBG funding can be improved, but a state like Ohio, with a shifting economy, should not be penalized. Our federal assistance is necessary to make positive improvements.”
“Even with the population drain, we should be putting more weight on the urban poverty in the Midwest and East Coast, not less,” Dayton Commissioner Dean Lovelace said. “These cuts would be devastating to us.”
Highland County Commissioner Russ Newman agreed saying that “those cities that are growing should also be having growing economies. They should have a better opportunity for funding. (If CDBG funding were cut) it would reduce our ability to upgrade roads, housing, water and sewage throughout the county. CDBG funds are one way small, rural counties can take care of some of the problems we have.”
Newman added that in past five years, CDBG funding to the county has already been reduced by close to 50 percent, citing 2002’s grant at $232,000 and this year’s grant at only $178,000.
Turner added that in the past, Ohio had always been a big winner in receiving CDBG funding because of an element included that would base the allotment of monies to state on the number of houses that were built pre-1940.
“They have eliminated that as a consideration and that was a big element for us,” Turner said. “Another big thing in Ohio is that for our urban areas, they took out any funds addressing abandoned housing. In Ohio, there tends to be thousands of abandoned housing that CDBG had been used for.”
Even cities that stand to gain under a revamped formula are concerned. Lorain Mayor Craig Foltin, a Republican congressional candidate, said cuts to the overall pot of grant money is hurting his Lake Erie shoreline city and restrictions on use of the money have already kept him from beautifying areas of his downtown.
“Every year I personally contact our delegation and send letters to the relevant committees to keep the block grant in tact,” he said.
Coburn emphasized that he doesn’t want to eliminate the grant program, but fears it will be swept away entirely if it isn’t reformed. He was particularly disturbed by the testimony of Kenneth Donohue, the Federal Housing Department’s internal auditor, who reported several types of fraud using the federal grant funds, including the 2004 bribery conviction of former East Cleveland Mayor Emmanuel Onunwor.
Donohue said his investigators have questioned $100 million in grant spending since 2004 after reviewing just 35 of the approximately 1,200 cities, counties and state governments that receive the funds.
“The CDBG program has been one that has showed great examples of success and some cases of abuse,” Turner also said. “One of the abuses are areas where cities use a lot of the funds to pay their staff instead of using it for community development activities. Congress is very concerned that this money should get to the roads, housing and infrastructure of communities. This is an important program where in almost every community you can see the results and as a federal program, that makes quality, I want to make certain that it is sustained.”
Subcommittee member Sen. Norm Coleman, R-Minn., the former mayor of St. Paul, said the program works too well to change so dramatically. Local leaders would be more accepting of changes if they weren’t accompanied by a 25 percent cut to the program’s current $3.7 billion budget, he said.
“My subcommittee just held a hearing on this,” Turner said. “We were the first to have a hearing on this with the administration proposals and we’ll work to modify their proposals that would obviously not penalize Ohio.”
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