Loss of CDBG funds would have great impact in city
President Trump's budget proposal to eliminate the nation's Community Development Block Grant Program would have an effect on Lawton far beyond the $1 million the community receives in actual funding each year.
City of Lawton officials have begun their annual process to finalize the Annual Action Plan, the detailed explanation of how they will use Community Development Block Grant (CDBG) and HOME Program funding that Lawton can expect to receive in the coming federal fiscal year. The process is more difficult than normal this year because of uncertainty at the federal level.
Tony Griffith, assistant director of the city's housing and community development divisions, said Lawton and other cities across the nation haven't been told what funding they will receive in the next federal fiscal year, even though the action plan must be turned into the Department of Housing and Urban Development (HUD) by May 15. Without that document in place by the federal deadline, the city won't receive its CDBG and HOME allocations.
Griffith, who took the planning document to the City Planning Commission on Thursday as the first step in the yearly process, said he was basing expenditures on the allocations that Lawton received this year: $921,503 in CDBG and $277,935 in HOME funding. Those were the totals he recommended the planning commission accept when it considered the Annual Action Plan, and the commission's recommendation will be forwarded to the City Council for final action, something Griffith plans for April 25. He said he is waiting as long as possible before going to the council because he hopes to receive final word on how much money Lawton can expect.
Griffith acknowledged Trump's budget proposal, but he said he also knows members of Congress already have made their opposition known.
"I feel strongly that is not going to happen," he said, of the potential loss of funding.
It's not a new concern. Community development officials have warned city officials most years in the last decade that federal officials had discussed reducing the funding programs, with an eye toward eliminating them. While local allocations had steadily decreased, they have stabilized in the last five years. But there still is variance. While the allocation was $992,974 in 2014 and $990,522 in 2013, it has been as low as $912,175 in 2015.
Griffith said his divisions are totally funded by CDBG and HOME, with those funds designated primarily to benefit low-income residents. Because of what had been a steady decline, most of the programs funded in recent years have centered on housing.
Griffith said changes in federal funding allocations would have his divisions looking closely at what they do, while elimination of those funds would mean elimination of those divisions.
He said that decision would have an effect well beyond the loss of about $1.2 million in federal funding. This fiscal year, the city received $921,503 in CDBG funding and $277,935 in HOME funding, money that primarily focuses on housing programs and services, but which also benefits community-based organizations that range from counseling for low-income families to Teen Court. The funds also let the city pay $149,517 on a $2 million debt it owes on the Section 108 Loan that the city obtained in 2007 for the Northwest 2nd Street/downtown revitalization project. While half the debt on that 20-year loan is guaranteed by a Brownfields Economic Development Initiative grant, council members were told at the time the city would be responsible for the debt if CDBG funding no longer was available.
Loss would be 10 times greater
Griffith estimated that the actual loss to Lawton would be eight to 10 time as much the funding loss, because those funds prompt other spending.
For example, it allows the city to buy and renovate deteriorating houses for purchase by low-income residents who are becoming first-time home buyers, or renovate the houses of low-income owners who otherwise couldn't afford the work. Those renovations are done by local contractors who buy their materials at local businesses, Griffith said, noting the loss of those spending dollars. Renovations allow residents to move into new homes or stay in other own homes, which aids the local economy through taxes, he said, adding that without the ability to stay in their homes, the city's homeless rate could increase.
"The effect is catastrophic," he said of what he called the societal and economic loss represented by the end of the CDBG program.