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JULY 24, 1997
FY98 APPROPRIATIONS - CDBG SET-ASIDES ESCALATE
As a follow-up to the NCDA Washington Report, 7/18/97 late Thursday evening, July 17 several last minute changes were made by the Senate Appropriations Committee to the FY98 VA, HUD and Independent Agencies appropriations bill which dramatically increased the number of set-asides in the CDBG program. The Senate recommendation for FY98 HUD funding contains more than $332 million in set-asides to the CDBG program.
The CDBG program has received "level funding" of $4.6 billion since, FY95, as a result of the most recent recommended set-asides approved by the Senate, the actual amount of funding for states and local governments declines by five percent nationwide, while the number of participating communities has increased by three percent the past three 3 years and is likely to increase even more in FY98.
It is important to recognize that rather than cut CDBG at the outset, which always, thanks to your efforts, generates a loud public outcry, Congress continues to indirectly reduce CDBG funding to entitlement communities through set-asides, many of which are not for CDBG related activities and several that have been funded seperately in the past. This on-going trend towards more set- asides is obviously worsening and unless we move to reverse this trend will only continue as the funding climate grows more and more competitive. If we do not act now to do as much as we can to hold this trend at bay, we are likely to see one-half a billion in set-asides by the year 2000.
This more "subtle" reduction in CDBG funding must be addressed NOW and then again during the upcoming congressional recess beginning August 1 in preparation for the House-Senate Appropriation Conference which is likely to occur in early September. We are urging members to contact your Senators and Representatives and: 1) make them aware of how these set-asides will effect your programs locally and be specific regarding how much your community has lost in funding over the past three years of "level funding"; and, 2) use August to organize a communications campaign among subrecipients and other individuals involved in the CDBG program, such as developers, lenders, business leaders, politicians, etc.
Although the losses are not "as dramatic" as cuts we have experienced in the past, this "creeping" dissolution of funding is perhaps even more detrimental to the overall well being of the program. Get activated now and help us prepare for the negotiations that will ensue in September regarding which set-asides should remain and at what levels. (Remember to forward all copies of correspondence to NCDA staff as well.)
AUTHORIZATION UPDATE - BUDGET ISSUES MONOPOLIZE CONGRESSIONAL CALENDAR
Public Housing Reform
Activity in the area of public housing reform has not occured since
mid-May when the House passed H.R 2 "The Housing Opportunity and Responsibility
Act". Senate staff had predicted earlier this month that the companion
piece of legislation, S. 462, "Public Housing Reform and Responsibility
Act of 1997" would go to the Senate floor before the end of July.
However, with only one week remaining before the August recess and several
important appropriations bills awaiting action and the budget reconciliation
debate far from complete, it appears highly unlikely that the measure will
pass before September.
H.R. 2 still contains some of the controversial elements pertaining to community development and housing such as the "Home Rule Provision/Title IV", which allows jurisdictions to undertake a performance-based contract with HUD for the use of public housing and assisted housing funds; and the "CDBG Sanction Provision", which allows the Secretary of HUD to withhold CDBG funds from a local government if the local public housing authority is designated as troubled and the local government is deemed partially responsible.
Mark-to-Market
In late June the Senate passed a budget reconciliation bill that included
S. 513, the "Multifamily Assisted Housing Reform and Affordability
Act of 1997". S. 513, introduced by Senator Connie Mack (R-FL), Chairman
of the Senate Housing Opportunity and Community Development Subcommittee,
which reduces rental subsidies received by private project landlords and
restructures mortgages to compensate for the subsequent reduction in income.
Unfortunately, because of objections raised by Representative Rick Lazio
(R-NY), Chairman of the House Banking Subcommittee on Housing and Community
Opportunities, the measure was removed from the reconciliation bill during
the House-Senate Conference. Representative Lazio, who has not introduced
a House version of S. 513 was strongly opposed to several elements in the
Senate bill. Lazio was particularly interested in a tax fix for owners
in addition to mortgage restructuring.
As a result, Senate supporters of S. 513 were successful in including elements of the bill on the VA, HUD and Independent Agencies Appropriations bill passed by the Senate earlier this week. However, it remains unclear what provisions of S. 513 is included in the funding bill and how it will fare in the House-Senate conference.
Homeless Assistance Consolidation
Consolidation of HUD's homeless assistance programs is also in a holding
pattern. The House Banking Subcommittee on Housing and Community Opportunity
held its second and potentially final hearing on the "Homeless Housing
Programs Consolidation and Flexibility Act", H.R. 217 in late June
and has not yet scheduled a mark-up of the measure. In addition, the Senate
has yet to introduce any homeless assistance reform bill, although staff
still indicates that one is forthcoming. With the Senate committed to introduction
of their own homeless bill, the Administration advocating for a single
block grant, the House consigned to a two grant program and a busy congressional
calendar ahead this fall it may be yet another year before we see a consolidation
of the McKinney Homeless Assistance programs.
EMPLOYMENT AND TRAINING PROGRAMS RECEIVE A SLIGHTLY HIGHER MARK IN FY98 FROM HOUSE
The House Labor, Health and Human Services, Education Appropriations Subcommittee marked up the FY98 appropriations bill on July 15, providing $80 billion in total discretionary funds for education, job training and health programs.
The bill provides a total of $10.8 billion in spending for employment and training programs, a nearly $600 million increase over last years allocation. Virtually all of the programs under the Job Training Partnership Act (JTPA) will be funded at FY97 levels, including the summer jobs, dislocated workers and year-round youth program. The Adult Training program - Title IIA received a significant boost from $895 million to $1 billion, equivalent to the President's request.
The House provided $100 million for the new Opportunity Areas for Out-of-School Youth program, which would be closely linked to the Empowerment Zone and Enterprise Communities programs.
The Social Services Block Grant lost some funding dropping from $2.5 billion to $2.2 billion in FY98, but the Child Care and Development Block Grant received a slight increase to $953 million. Head Start received $4.3 billion a $400 million increase over this year and the Low Income Energy Assistance program was slated at $1 billion.
The full House Appropriations Committee is likely to take up the Labor, HHS and Education funding measure sometime before the congressional recess, but the timing of Senate action is still uncertain.
WELFARE-TO-WORK PROGRAM MAKES PROGRESS IN BUDGET DEBATES
The budget reconciliation bills passed by the House and Senate both contain authorization for a new $3 billion program of mandatory spending for welfare-to-work activities targeted on longer- term, harder-to-employ welfare recipients. The House bill actually contains two differing versions of this new authorization -- one reported by the Ways and Means Committee and another by the Education and the Workforce Committee.
These three versions share a common framework. Each version would distribute some of the available funds to states on a formula basis, with a requirement that states pass through at least 85% of those funds according to a needs-based formula that states could design within perscribed standards. Under all of the versions, a one-third state match would be required to draw down available formula-based funds. Each version also would provide funds for competitive grants awarded directly by the Secretary of HHS to local applicants.
Although many proponents of the proposal including the U.S. Conference of Mayors worked hard to have the program operated out of the Department of Labor, thereby creating a stronger voice for local governments, it appears as though congressional leadership is commited to HHS's operation of the program.
There are significant differences, however in the design of other aspects of the proposed welfare- to-work initiative, the most dramatic of which is the proportion of available funds reserved for competitive grants varies greatly -- House Ways and Means calls for a 50/50 split, while Education and Workforce calls for 95% states, 5% competitive and the Senate calls for 75/25. In addition, the Ways Ways and Means version requires at least 65 percent of the competitive funds to be used for grants in 100 cities with the largest poverty populations, while the Senate version contains no earmarks for large cities but reserves 30 percent for rural areas.
For more information on the welfare-to-work initiative call Margaret McGilvray, at NCDA, (202) 293-7587.
ISTOOK AMENDMENT PART II /SON OF ISTOOK EFFORT SQUELCHED
Recognizing that he didn't have the necessary support, Representative Ernest Istook (R-OK), did not offer his "Son of Istook" amendment to the House Labor, HHS and Education Appropriations bill as was reported in the NCDA Washington Report, 7/18/97.
Amendments of any kind, were strongly discouraged by Representative Robert Livingston, Chairman of the House Appropriations Committee and only a few were allowed during the markup of the bills. In addition, pressure on Istook had grown considerably as many members of the Appropriations Committee had received negatiave constituent respondeces to his proposal. Whether it was Livingston or the public this was the reason or not, Rep. Istook withdrew his amendment, however we will watch closely as to whether or not he makes an attempt to tack it onto another funding measure.
DISASTER RELIEF GUIDEBOOK UPDATE
We are delighted to announce that Dr. James E. Huger, NCDA Past President and former Community Development for Daytonna Beach, FL has agreed to take on the role of Project Director for the Disaster Relief Guidebook, highlighted in the NCDA Washington Report, 8/17/97.
HOMEOWNERSHIP RATE INCREASES -- NATIONAL HOMEOWNERSHIP PARTNERSHIP STRATEGY SHOWS EFFECTIVENESS
Secretary Andrew Cuomo announced earlier this week that the U.S. homeownership rate rose .3 percent to 65.7 percent during the second quarter of 1997 -- the highest quarterly rate in nearly 17 years and within one-tenth of a percent of the all-time high rate. During the April to June reporting period 597,000 new homeowners were added to the roles, increasing the number of homeowners by 3.1 million since the National Partners in Homeownership was launched in 1995.
During the second quarter:
Secretary Cuomo and President Clinton credit much of this increase to the diligent efforts of the National Partners for Homeownership, of which NCDA is a member and active participant. President Clinton's goal is a homeownership rate of 67.5 percent and 8 million new homeowners by the end of the year 2000. Two percentage points and 4 million additional homeowners left to garner in the next three years.
FEDERAL REGISTER
Availability of Funds Supplementary Notice Economic Development Assistance Program for Disaster Recovery Activities: FR 62 38200-38202, 7/16/97 - EDA announces the policies and the application procedures for funds available to support disaster recovery projects in North Dakota, South Dakota, Minnesota, Kentucky, West Virginia, Ohio, Indiana, Illinois, Arkansas and Tennesee.
FY97 Portfolio Reengineering Demonstration Program Request for Qualifications: FR 62 38109- 38112, 7/16/97 - Provides details of demonstration program for designated sites.
HUD PUBLICATIONS
The State of the Cities - A report released in June by HUD outlining
the decline of city life from the 1970's through the 1990's, the challenges
that remain and an assemblance of the Administration's "urban agenda".
Although, the report provides a moderately interesting and brief review
of recent history, it does not contain any substantive information regarding
the details of the Administration's urban agenda. For copies call the HUDUser
800-245-2691 or access HUD's Homepage.
