A proposed $6.2 billion cut to the Department of Housing and Urban Development could translate to an annual loss of $310,000 in the city of Denison’s budget. Earlier this week, White House officials presented a budget that included a 13 percent funding decrease for HUD and an elimination of all funding for its Community Development Block Grant program.
“That is a large enough sum that we’d have to make some difficult choices with regard to our budget moving forward,” City Manager Jud Rex said Friday.
Last year, the city of Denison applied for and was approved for a $1.55 million Section 108 loan through HUD to finance improvements to many of the city’s roadways in low income areas. To pay this off, the city planned to leverage a portion of its annual CDBG funding to finance the debt.
Rex said the city will continue forward with the plans for the road repairs, but instead of utilizing its CDBG funding, the city will make payments from its general funding. Of this funding, about $190,000 was slated to be used for debt payments, with $90,000 utilized for emergency home repairs. Historically, the majority of these funds were used for these repairs before the city’s decision to finance street repairs.
“It is not just our roads that will take a hit,” Rex said. “Our low-income residents will no longer be able to have those improvements made.”
The remaining funding was used by the city to for half of the salary for a code enforcement officer and a portion of Development Services Director Gabe Reaume’s salary.
“One misconception I think is important to clarify is that a lot of people equate CDBG and HUD with public housing only. The program is certainly far more broad and flexible for each recipient community,” Reaume said.
Historically, the city of Sherman has used its funds for housing rehabilitation, demolition and other public services. Sherman Community and Support Services Manager Nate Strauch said he wasn’t certain how many of the cuts would make it through to the actual budget, but the city will be prepared.
“Once Congress decides the degree to which these CDBG cuts could be realized, City of Sherman budgeters will begin looking at their possible impacts,” he said in an email. “But at the end of the day, federal money is found money from a municipality’s point of view — we either get it or we don’t get it, and there are 1,300 miles and an ocean of reality separating us from those who make the decision.”
Since 1974, the program has been a tool for local communities to fund improvements in low- and moderate-income neighborhoods and areas. Mick Mulvaney, director of the office of management and budget, justified the proposed cuts to CDBG in the daily White House press briefing Thursday. Mulvaney questioned the effectiveness of the program, noting that $150 billion has been spent through it since the 1970s.
“The CDBGs have been identified as programs since I believe the first — actually, the second Bush administration as ones that were just not showing any results,” Mulvaney said. “We can’t do that anymore. We can’t spend money on programs just because they sound good. … But to take the federal money and give it to the states and say, look, we want to give you money for programs that don’t work — I can’t defend that anymore. We cannot defend that anymore. We’re $20 trillion in debt.”
“(We are) going to spend money, we’re going to spend a lot of money, but we’re not going to spend it on programs that cannot show that they actually deliver the promises that we’ve made to people,” Mulvaney continued.
Reaume contended that the programs have indeed shown success, in part, because they are flexible enough to allow the cities to spend the money on projects that local leaders know the community needs rather than those dictated by an outside agency.
“I can show you thousands of reasons in Denison why it is effective,” he said.
Both Reaume and Rex said they are uncertain if this budget will passed through Congress without changes, and both said they are optimistic that the situation can be resolved.