Budget developments at the federal level have Schenectady leaders bracing for the need to cut services as basic as street paving, and others that assist the city’s most vulnerable residents.
In an effort to cut spending, President Donald Trump’s “skinny budget,” or initial plan, hacks away at various departments, including the Environmental Protection Agency, the Energy Department and the Department of Housing and Urban Development.
Among his proposals were the complete elimination of HUD’s Community Development Block Grant program and the Home Investment Partnership Program, or HOME. A recent modification called for a roughly 50 percent cut to CDBG funding, a measure that could blow a more than $1 million hole in the city of Schenectady’s budget.
The CDBG program provides significant funding for numerous community organizations that serve the city’s homeless and low-income residents. It also helps finance critical services, such as street paving, building demolition and code enforcement.
The final federal budget bills won’t be signed until September, and local officials are hopeful funding will be restored. Even so, communities are bracing for the prospect of cutting staffing or services to make up the financial gap.
“Some of it would be as simple as we’d have to go back and not pave some of the streets that we’re planning to do in the future,” Schenectady Mayor Gary McCarthy said. “Some of those service providers that provide stability within the community are not going to be able to do that.”
Schenectady is in the midst of a public comment period regarding CDBG allocation, though the uncertainty at the federal level clouds what can be done at the local level.
The first iteration of Trump’s budget was largely panned by federal lawmakers, including some who called it “dead on arrival.”
“CDBG is a vital program not just to larger cities like Schenectady, but go to Amsterdam or Canajoharie, and they depend on these programs,” U.S. Sen. Chuck Schumer, D-New York, said during a stop Tuesday in Schenectady. “We’ll fight hard to get it back, and I’m optimistic we will.”
At a full funding level, Schenectady typically receives about $2.7 million in CDBG money. A 50-percent cut would eave the city and local organizations scrambling to cover $1.3 million in unfunded services.
“It’s hard to judge what public reaction would be to some of those cuts,” McCarthy said. “People might say, ‘I definitely want this street paved or this service,’ and it would be up to the City Council to see how to reallocate that money.”
The city spends nearly $1.1 million annually on paving and demolition work alone, said Curtis Eatman, the city’s assistant finance commissioner. Another portion is allocated toward the city’s code enforcement office, its development office and its law office.
If the city opted not to cut services, it could resort to raising taxes to cover the funding difference, Eatman said. He estimated that, if the CDBG funding were completely eliminated and the city didn’t cut services, a house in the city assessed at $100,000 would see a tax bill increase of about $107, or 2 percent.
If the funding were reduced rather than fully eliminated, as is currently proposed, the subsequent service reduction would not be as significant, but would still be necessary to an extent, Eatman said.
A number of local groups that depend on CDBG and HOME funding to provide an array of services are facing a similar problem.
SICM typically receives $5,000 for its summer meals program to provide free lunch to impoverished city children. The Schenectady County Youth Bureau last year received close to $70,000 from CDBG. Roughly $40,000 was allocated last year to the YMCA for its summer drop-in program.
“What was proposed was draconian,” said Rev. Phil Grigsby, executive director at SICM.
The SICM summer lunch program could continue without the $5,000, but slashing CDBG money would have a profound effect on quality of life in the city, he said.
Without money for demolitions, more blighted properties would remain. Without shelter for the homeless, they might end up at the library during the day, he said.
Bethesda House, a Schenectady organization that assists homeless and low-income residents, relies on CDBG and HOME grants to maintain its services.
The non-profit provides a security deposit and first month’s rent for homeless individuals, a case management program that assesses whether an individual needs treatment for mental illness or addiction and a drop-in center that provides food, clothing and shelter.
About 200 people per day utilize the drop-in services, and the case management program has housed 253 people since July 2016, said Kim Sheppard, executive director of the Bethesda House.
“[A funding cut] would require us to either scale back staff, or reduce services while we look for other funding to help support the department,” she said. “It would have a devastating effect on the community.”
Limited staffing would mean fewer people could access the drop-in center, for example.
Even those who don’t directly benefit from programs like those at Bethesda House could still see the consequences of the pared federal budget, Sheppard said.
“There’s a high percentage of homeless people in the city, and without this particular funding, more would be on the streets during the day,” she said. “Without our day program, if we didn’t have that funding, where would they go?”
Sheppard said she’s already looking for alternative funding sources that would keep the existing services in place, or at least limit the impact of federal cuts.
That’s a reality for many community organizations around the state, which depend on federal money to leverage private money, which in turn provides economic development opportunities for the whole community, said Karla Digirolamo, CEO of the New York State Community Action Association.
“We’re fooling ourselves if we think these significant providers of services in our community are only serving the low-income population,” Digirolamo said.
If the cuts come to fruition, certain groups might have to step back and reassess how they can best serve the community, she said.
“Some agencies would not survive, while some would survive but in a reduced form,” Digirolamo said. “But the need for those services would not disappear.”