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Robbing Peter?
Submitted by Ray Murphy on Wed, 11/18/2009 - 11:15am.
I opened up the Metro this morning and was pretty surprised to read that the city is awarding ten grants, in amounts up to $100,000, to cultural orgs who have 'shovel ready' capital projects using CDBG money. (No link to Metro article online, but here is a WHYY link).
CDGB stands for the "community development block grant." It had always been my understanding that CDBG money was sort of a Republican concession prize to cities. Under Nixon and Ford, lots of federal sources of support to cities were cut off (and really, urban aid had been on the decline since the 1940s when the suburbs were created), but CBDGs were awarded to cities to sort of make up for it.
Mind you, every Republican congress since has tried to reduce the size of the allocation. And George W. Bush sure took a huge chunk out too. Not to mention the fact block grants are never as useful as entitlements when it comes to reducing poverty (which was part of Nixon's intention in creating them).
Nonetheless, today CBDG money has become the last line of defense against budget starvation for many cities when it comes to affordable housing and other frontline anti-poverty programs.
My experience with this source of federal money is from my time working in Pittsburgh for a welfare rights/anti-hunger organization called Just Harvest (www.justharvest.org). Each year we organized people to go to Pittsburgh City Council meetings to lobby for the use of some of that large block grant for anti-hunger programs.
I haven't done policy work around CBDG since, but it seems odd to me to give away what is essentially anti-poverty program money to fund Philadelphia's creative economy.
The total amount of the city's $14 million CDBG award to be used for creative pursuits ( which specifically include, according to the Mayor's press release, "grants...to nonprofit and for profit creative businesses for facility projects linked to job creation such as renovated office space, mixed-use facilities, artist workspace and creative industry incubators.") is about $500,000. And this award is part of a stimulus package boost to our annual federal allocation.
As many past posts of mine imply, I am not against innovative economic development. If we want to move at least some of the 1/3 of the city's population living in poverty into the middle class, we have to change what we're doing.
But...this seems to me like robbing Peter to pay Paul.
Stimulus money or not, using CDBG money for non-front-line anti-poverty measure sets a dangerous precedent.
CBDG money in Philadelphia has traditionally been used for affordable housing.
You can read an exchange here between Reinvestment Fund's Jeremy Nowak, former OHCD head John Kromer and others here about the possibility of changing that traditional use in favor of out-of-the-box community development here. The one quotation from that piece that riles is this, from Gary Steuer of the City Office of Arts, Culture and the Creative Economy:
CDBG funds here are just one test case of whether the stimulus program will challenge outmoded thinking, or simply reinforce it.
Funding affordable housing in a city where we still need to create close to 30,000 units of affordable housing is outmoded? When our own Mayor and City Council dip into the Affordable Housing trust fund to deal with other budget priorities and when Inclusionary Zoning is still not a done deal, I'd say we're far from being able to talk about affordable housing as an outmoded use of public dollars.
I would really love to hear from folks in the affordable housing world (ACORN, WCRP, Project HOME, CLS, PUP, etc.) to see if I am missing something.
Like maybe there was a deal made with other state or federal pots of money that don't make this a net loss for housing? Certainly the creation of jobs is a good thing. And I know $500,000 is not that much money.
But still...if job creation in the creative sector does not correspond exactly to the low incomes that create a need for affordable housing or other anti-poverty services for those traditionally served by CBDG then we have a real problem here with priorities.
It's part of the stimulus
These funds are part of the stimulus. From how I understand it, the stimulus plan is just using CDBG as a mechanism of disbursement.
In other words, these funds are in addition to what is existing under CDBG. The correct analogy would not be that they are robbing Peter to pay Paul but that they are paying both Peter and Paul.
I thought they shut down
I thought they shut down CBGBs last year? j/k
>>they are paying both Peter and Paul.
or they're giving additional money to Peter to then give to Paul?
Hope that's right--that it's surplus monies, rather than the usual allocation the CBDG.
It is
I am not disputing that this an additional infusion of CBDG funds via the stimulus package. It is in fact explicitly stated in my post.
But this is about a choice of this NMayoral administration to use those extra funds for something outside the bounds of what we usually do with CBDG money.
Let's not forget that CDBGs nationally were severely cut under the last Presidential administration such that $14 million hardly makes up the gap between what we have been getting and what we need.
And therefore it is more than fair to ask questions about the priority of this Mayoral administration for the use of federal dollars in relationship to frontline anti-poverty programs.
After all, the only reason stimulus funds exist are to help Americans struggling because of the current economic crisis.
sure, the question of where
sure, the question of where and how to spend stimulus money is certainly valid. The mechanism of distribution is probably less critical.
>After all, the only reason stimulus funds exist are to help Americans struggling because of the current economic crisis.
I don't think that such a broad pronouncement really helps clarify how to spend such funds.
The few economists I've read seem to favor the spending on jobs creation, infrastructure building/rebuilding and state/local funding. (Anti-poverty would likely flow through the state/local funding arena, I assume.) They also think that we didn't allocate enough in the first stimulus, and should probably have another. Mortgage modifications via 'cram-downs' also seemed to be important, but were gutted in Congress (instead we got buyer tax credits, which mere keep prices artifically inflated), along with the state/local funding aspect.
I guess the over-arching goals of the first stimulus package were organized in 'trickle-down' formula--of which I'm not much of a supporter. The non tickle-down parts--state/local funding and mortgage 'cram-downs'--were stripped out.
I imagine there's some leeway in how some of the funds are spent, but I don't know how much.
Pick a box up from the bottom and the rest rises with it.
I agree that the money should be used to fund anti-poverty/hunger programs in the city. Perhaps Nutter is thinking that by bolstering the creative community he will in effect help to invigorate sources of aid for the lower class, via the trickle down effect. But then there's the nation's economy; however, maybe on a smaller scale, the trickle down effecy would work. Maybe Philly's cultural orgs would make smart decisions that would jointly improve conditions for their target communities and the city's destitute. But I don't know how that would work, unless perhaps they were to gift that same CDBG money forthwith to anti-poverty/hunger programs, or capitalize it, and then gift such programs with a larger boon. But why would they do that?
I foresee the money stabilizing the existing middle class, which is not bad, but that also has the potential to fortify the position of the lower class.
Uplift of the lower class in any city, essentially, uplifts everyone: you don't pick a box up from the top, you pick it up from the bottom and the rest rises with it.