CC PACKET 11221989 - Laserfiche WebLink

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• Action Alert Federal Update Congress considering proposal to restrict CDBG If Congress approves a proposal restrict- gram an antipoverty measure.The CDBG address objectives to aid low-and mod- ing the use of Community Development program can now address public works, crate-income people;and Block Grants (CDBG), many cities in capital development, rehabilitation, *Require entitlement cities to establish Minnesota will no longer be eligible for housing,economic development,and a an antipoverty strategy. these grants after FY'89.HUD Secretary variety of other local needs. The pro Jack Kemp made the proposal. posal will prevent cities from relying on The House Banking Subcommittee on CDBG for these purposes in the future. Housing and Community Development City officials must take this threat se- Many non-metro cities in the state use has begun to put the finishing touches on riously and respond now by contact- CDBG grants for economic develop- the reauthorization of the housing and ing House and Senate members of the ment activities as well as for public community development act(H.R. 1180). Minnesota Congressional delegation improvements and housing. The refo- Title I of the legislation will probably and oppose this action. cusing of such grants would shift those include Kemp's proposal which will funds to public service activities. increase the overall low-mod benefit Actions to redirect the CDBG program requirement from 60 percent to 75 per- would substantially limit the flexible The proposal will force smaller cities,in cent for projects CDBG is funding. block grant approach that is an essential particular,to end the use of CDBG funds �l feature of the federal community devel- for needed street and sewer improve- Rep. Bruce Vento (4CD) is a senior opment assistance program.In addition, ments for instance. member of the subcommittee.Cities in many cities may find they will not be the 4th Congressional District as well as eligible for CDBG grants in future years. Recommendations made by Kemp would those communities that depend on both eliminate public improvement projects. CDBG entitlements and Small Cities House and Senate conferees also re- unless it could be shown that the im- CDBG funds should contact him and duced appropriations for CDBG by 7.8 provements provided the"required per- emphasize the impact of the loss of such percent, as of October 1, 1990. That centage benefit"to low-and moderate- funds after September 30,1990.Itisalso cutback actually represents a loss of 11 income residents. The proposal would important for city officials to contact percent, when inflation is factored into not permit"area wide"benefits. their House member of the state's Con- the total reduction.The level of CDBG gressional delegation to let them know funding to be available in 1990 would be The basic changes Kemp is proposing the consequences cities will face if CDBG reduced from the current funding level would transform the program from a -funds are no longer available for city of$2.9 billion to$2.7 billion,according federal effort to aid cities to overcome programs and services. to the National League of Cities(NLC). urban decay and to rebuild local econo- mies.The proposal would redirect fed- In the Senate,the Banking Subcommit- By stringently targeting eligibility for eral assistance to public services. The tee on Housing and Urban Affairs start CDBG entitlement grants to cities that Kemp recommendations would include work on its version of major housing I can meet criteria established for Urban the following changes: legislation this week(November 8).The Development Action Grants (UDAG), subcommittee will review CDBG re- less than half the cities that now receive * Tighten accounting requirements to strictions in Kemp's proposal to deter- entitlement grants would continue to do mandate proportionate calculation of mine which provisions to include in the SO. benefits; HUD reforms in the national affordable * Increase overall low/mod benefit re- housing act. City officials should encourage mem- quirement to 75 percent; bers'of Congress to question whether it *Require more affluent cities to use 100 The proposal to target CDBG funds would is appropriate to make the CDBG pro- percent of CDBG-funded activities to no longer permit"more affluent"cities See Federal update,page 10 November 9, 1989 Printed on recycled paper page 9