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Proposed Elimination of Federal CDBG Funding Causes Uncertainty for Cities, Santa Barbara Nonprofits

Community Development Block Grant program accounts for more than half of Santa Barbara’s human services grant funding

City Councilman Bendy White, left, thanked the organizations at Tueday’s council meeting for their “work each day on the front lines.” The city Community Development Block Grant process “has helped all of us do better work,” he said. “I think that has made our nonprofits stronger.” Click to view larger
City Councilman Bendy White, left, thanked the organizations at Tueday’s council meeting for their “work each day on the front lines.” The city Community Development Block Grant process “has helped all of us do better work,” he said. “I think that has made our nonprofits stronger.” (Sam Goldman / Noozhawk photo)

Though the vast majority of Women’s Economic Ventures’ funding is from private sources like banks and foundations, the micro-loan and self-employment-training organization uses public money from the City of Santa Barbara to support its 14-week program to help people launch or expand their business.

A major component of Women’s Economic Ventures’ $220,000 of annual public money ultimately comes from the federal Community Development Block Grant program, allocated to it by five Santa Barbara County and Ventura County jurisdictions.

The future of that funding could be in jeopardy.

Looming over human-services organizations across the country is a provision of the Trump Administration’s recently released budget proposal calling for the elimination of all $3 billion of funding for the CDBG program — a major slice of the 13-percent proposed funding reduction for the U.S. Department of Housing and Urban Development.

The CDBG program funds affordable-housing projects, infrastructure, anti-poverty efforts, parks and other public projects on the local level.

“That would be a huge hit for us,” said Women’s Economic Ventures founder and CEO Marsha Bailey.

White House officials wrote in the budget blueprint that since the program’s inception in 1974, the block grants are “not well-targeted to the poorest populations and has not demonstrated results.

“The Budget devolves community and economic development activities to the state and local level, and redirects federal resources to other activities.”

Bailey, along with many cities and politicians on both sides of the aisle, disagrees.

“It’s hard to understand. This is money that supports infrastructure, job creation, access to capital, community development — all of the things that President Trump campaigned on,” she said.

“These are federal dollars coming back to our local communities, and our communities get to decide, within federal priorities, how the money should be used.”

Santa Barbara Mayor Helene Schneider called the proposed elimination extreme and drastic. 

“Frankly, I don’t understand the concept behind it because so much of the funding that comes through here ends up helping people become self-sustaining, and actually provides jobs,” she told Noozhawk.

“It’s something that you ask any official at the local level — doesn’t matter their political stripe — they would tell you CDBG funds mean something tangible to the local city,” she said. “It comes directly to us, you can see the results, it’s a big deal.”

On Tuesday, the Santa Barbara City Council approved a list of recipients for the city’s fiscal year 2018 human-services grants, totaling $1.4 million.

After an application, review and scoring process, 46 of the 54 organizations requesting funding for the fiscal year starting July 1 were selected for grants.

Jennifer Griffin, business manager at the Independent Living Resource Center, said her organization was concerned about the proposed elimination of the CDBG program, telling the City Council Tuesday that “it’s really quite shocking in many ways that this could be a reality.” Click to view larger
Jennifer Griffin, business manager at the Independent Living Resource Center, said her organization was concerned about the proposed elimination of the CDBG program, telling the City Council Tuesday that “it’s really quite shocking in many ways that this could be a reality.” (Sam Goldman / Noozhawk photo)

The primary sources of human-services grant money are $726,000 from the city’s General Fund and an expected $834,000 from the CDBG program — the latter number based on last year’s federal allocation.

Both Santa Barbara and HUD prioritize where their funding goes.

Entities focusing on poverty, domestic violence and gang violence are first in line for the city’s human-services grants, followed by infrastructure and economic and personal development programs.

Should HUD funding come in lower than expected, grants for capital projects and the lowest-scoring “Priority 2” public- and human-service applicants would be reduced or eliminated to make up the difference.

“At this point, we do not know how much the city’s allocation is going to be for fiscal year ’18,” Elizabeth Stotts, the city’s community development programs specialist, said at Tuesday’s council meeting.

Congress must first complete the appropriations process for HUD’s fiscal year 2017 funds before the department can announce the CDBG allocation. Stotts told Noozhawk the city’s 2018 CDBG allocation is dependent on HUD’s 2017 appropriations.

The White House’s proposed CDBG elimination, however, would not go into effect until fiscal year 2019, she noted. And Congress would still have to choose to incorporate that cut into the national budget.  

Even still, this month’s proposal to eliminate that funding lifeline has already become a source of anxiety for human-services organizations.

“We are seeing the impacts on our clientele. Lots of fear across the board,” said Lisa Brabo, the executive director of Family Service Agency, which was allocated city grant money Tuesday night and offers services supporting families, youths, seniors, school counseling and behavioral health.

“People are wanting to withdraw from entitlement programs, not wanting to sign paperwork, not wanting to leave paperwork behind, staying at home,” she said.

Without agencies like a public health department, Schneider told Noozhawk that partnerships with nonprofits and other organizations are necessary to meet some of the city’s basic human needs, like affordable housing programs.

“We really see this as an investment,” she said.

Even though it supplements CDBG funds more than many other jurisdictions, Santa Barbara's City Hall might have to come up with a new human-services funding plan should the federal program be terminated.

“We’d have to have that policy discussion,” Schneider said.

Noozhawk staff writer Sam Goldman can be reached at .(JavaScript must be enabled to view this email address). Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.

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