Fiscal Note
This resolution does not commit any funds; the likely effect of the Federal Executive 2005 Budget proposal is to reduce the HUD annual grant amount to the City of Madison by some $2.4 million per year starting in 2006, with little chance for Madison to obtain replacement funds through a new and shrunken Commerce program.
Title
Petitioning Congress and the President to retain the CDBG program in its current format, so that local governments can continue to effectively benefit lower income persons, create housing and economic opportunities, and strengthen neighborhoods.
Body
WHEREAS the Federal Executive 2006 budget proposes to cut the national CDBG program by about 40%, move the remaining funds to the Federal Department of Commerce, and merge it with some seventeen other programs from several other departments into a challenge program of two components, one targeted to cities with very high poverty and one focused into a discretionary competitive program.
WHEREAS the White House says that the rationale for this change is that the move will help CDBG and the other transferred programs merge into a more focused approach on private business development, the new approach appears to virtually eliminate an emphasis on community-based economic development or longer term sustained efforts in community development,
WHEREAS the proposed program will likely reduce the role of neighborhoods and community-based groups if merged with other programs in the new Department of Commerce challenge fund,
WHEREAS the proposed program will restrict Madison's access to funds to address community development issues in higher need neighborhoods,
WHEREAS the CDBG program has worked effectively at the Federal level for 30 years to combine national goals of benefit to low and moderate income persons with local flexibility to address those goals in a comprehensive manner in partnership with many community-based groups,
WHEREAS Madison has made effective use of its CDBG funds to invest in community groups and projects that address a wide range of housing, service, and job creation goals, and have strengthened target neighborhoods within the City, including Williamson Street, Atwood Avenue, Vera, Darbo, Broadway, Northport-Warner, Wexford, Bayview, and South Madison
WHEREAS Madison has creatively invested approximately 30% of its CDBG funds over the years to help create a model business loan program, Wisconsin's first publicly seeded venture capital fund, three of the city's four business incubators, and the UW Small Business course on business plans, and created over 2,000 full-time jobs to be filled by lower income persons, and assisted over 20 entrepreneurs each year to start or grown their small businesses, and leveraged about $8 for each CDBG dollar invested,
WHEREAS the national CDBG program has used about 40% of its total for affordable housing activities, and such a move would undermine Federal support for affordable housing,
WHEREAS the local CDBG program has used about 20% of its resources to create or support program that strengthen Madison neighborhoods and the White House proposed move would negatively impact planned redevelopment efforts in target neighborhoods such as Allied and South Madison,
THEREFORE BE IT RESOLVED, that the Common Council of the City of Madison hereby petition its representatives and those of the state of Wisconsin to stand against the dismemberment of an effective Federal program, and to voice support to retain the Community Development Block Grant program within its current format of entitlement grants to cities and local government so that these cities and local communities can use Federal resources to effectively address the challenges of community development.
NOTE: The Proposal describing the proposed re-organization, its likely impacts, and the CDBG staff and CDBG Commission recommendation are available on file in the Council Office and in the CDBG Office.