Debt Ceiling Impacts Cities at Just the Wrong Time

Amid both the cheers and jeers last week, there was seemingly little discussion of the impact the debt ceiling bill is going to have on our inner cities. Almost half of the impending $2 trillion in cuts are expected to come from domestic, discretionary spending (all programs other than entitlements and defense).  One third of this discretionary spending typically goes to local municipalities. Not anymore.

Though it’s not quite clear yet where cuts will come from, most agree on one thing: federal contributions toward community programs, housing and infrastructure are sure to be slashed. Republicans in the House have already proposed the elimination of $3.9 billion in Community Development Block Grants. These grants directly support our inner cities: they fund projects like affordable housing developments and community centers.  Meanwhile, the President wants to halve the funding for a program that provides assistance to the poor for heating and air conditioning.   

These cuts couldn’t be coming at a worst time. Property values in many of our inner cities have already plummeted due to the recession, deflating cities’ tax bases. To deal with budget shortfalls, cities have spent the past three years cutting funding from things like education, health care, and law enforcement. The federal government cutting additional discretionary spending is only going to compound the troubled finances faced by our inner cities. 

Those hurt the most will be lower-income households. Ryan Holeywell, of Governing.com, perhaps states it best: “It’s not the wealthy who borrow books from the library and take their kids to the community pool.”

Urban residents should begin contacting their legislators and pleading for their most necessary programs. Without advocates, these programs will most certainly be cut, leaving poor households to suffer most.

To read more about this topic, and how the debt ceiling is going to impact our cities, check out Holeywell’s article from last Friday - “What Central Falls and the Debt Deal Mean for Cities.”  Also, share your thoughts on additional budget cuts in your city.

BY Amanda Maher on August 10th, 2011

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