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Letter to Chairman Kent Conrad and Ranking Member Judd Gregg of the Senate Budget Committee

Letter to Chairman Kent Conrad and Ranking Member Judd Greggof the Senate Budget Committee

Snowe Calls on Budget Leaders to Increase CDBG Funding

U.S. Senator Olympia J. Snowe (R-Maine), a senior member of the Senate Finance Committee, sent a bi-partisan letter today to the Chairman and Ranking Member of the Senate Budget Committee requesting an increase of $4.1 billion in Community Development Block Grant (CDBG) funds for FY-2009. The President's proposed budget requests $3 billion for the CDBG fund, a decrease of 22% the prior fiscal year's levels. The CDBG program provides billions of dollars in flexible funding to states, localities, and other community organizations for economic development and public works projects.

"CDBG is one of the few remaining federal programs available to assist Maine communities in their efforts to create jobs, provide affordable housing, eliminate blight, and generate new economic development," Senator Snowe said. "Increasing our investment in CDBG will help us grow our regional economy and address critical infrastructure upgrades. At a time when our nation's economy is struggling and pubic works upgrades are falling behind schedule, this is the worst time to scale-back funding for this essential program."

The CDBG program is the largest source of federal financial assistance in support of state and local governments' community development and neighborhood revitalization activities. Maine's CDBG program provides funding and technical support for projects that achieve local community and economic development objectives, while principally benefiting Maine's residents with low-to-moderate income. These programs are only available to Maine towns, cities and counties for the benefit of Maine residents.

The text of the letter is provided below:

Dear Chairman Conrad and Ranking Member Gregg:

As you near consideration of the fiscal year (FY) 2009 Budget Resolution, we urge the Budget Committee to oppose the President's budget proposal to cut funding for the Community Development Block Grants (CDBG) Program by $866 million (22 percent) from the $3.866 billion enacted in FY2008. Instead, we request that you maintain the Federal government's commitment to community development programs at the Department of Housing and Urban Development and support a budget allocation of $4.1 billion in Function 450 for CDBG.

The CDBG program is the largest source of federal financial assistance in support of state and local governments= community development and neighborhood revitalization activities. The program promotes local decision making in the development of community development plans intended to principally benefit lower moderate- income persons, including homeownership assistance, housing rehabilitation, public improvements, public services, and economic development projects. CDBG funds are allocated by formula to 1,100 entitlement communities, states, and the Commonwealth of Puerto Rico. After funds are set aside to fund a number of related categorical programs, 70 percent of the remaining funds appropriated are allocated by formula to CDBG entitlement communities while states share the remaining 30 percent.

The CDBG formula allocation was funded at $4.41 billion in FY2001. We are very concerned about the impact cuts since FY2001 have had on the program and the continued impact the proposed cuts will have on the communities that rely on this funding to serve their most vulnerable residents, principally low- and moderate-income persons. Particularly during the current housing foreclosure crisis facing our nation, CDBG could be an avenue for local communities to acquire and rehabilitate foreclosed homes until owners and renters are ready to move in. Homes that have been foreclosed and are sitting unoccupied on the market can sap neighboring homes of their value.

Communities will continue to experience setbacks with a decline in funding for the CDBG formula allocation. Therefore, we urge you to increase the allocation for Function 450 in the FY2009 Budget Resolution to accommodate $4.1 billion for CDBG during the appropriations process. We appreciate your attention to this matter of mutual concern.


Senator Olympia J. Snowe Senator Herb Kohl
Senator Russell D. Feingold Senator George V. Voinovich
Senator Susan M. Collins Senator Sherrod Brown
Senator Edward M. Kennedy Senator John F. Kerry

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