Published: February 28, 2008 02:37 pm            

Re-energize local economies | Bring back federal revenue sharing, expand CDBG funding

By now the voters might either be turned on or tuned out to the presidential race. It has been a long road and perhaps most of us wish that it would end sooner than later.

The candidates have stated their positions on the economy, universal health care, education, immigration and the war in Iraq.

Hopefully, before the voters in Pennsylvania go to the polls in April, the candidates will be asked whether more federal dollars can be expected for our state and municipal governments. This critical infusion is essential for reinvigorating and re-energizing our local economies.

Many would argue that revenue sharing worked well back in the 1970s in providing those extra dollars to initiate critically needed local projects. Revenue sharing came at the right time, but, unfortunately, today the “federal spigot” is barely a trickle of what it was then.

Begun under the Nixon administration, revenue sharing gave an annual slice of the federal tax revenue to the states and their cities, counties, boroughs and townships. It was extremely popular with municipal officials.

It ended under the Reagan administration because it was believed that the states had accrued large surpluses and could go it alone. As a consequence, federal revenue sharing was stopped in order to help shrink the national government’s deficit.

In 1974, under the Ford administration, the Community Development Block Grant program was initiated to be used by states to expand economic opportunities, principally for low- and moderate-income families.

Currently, CDBG funds are allocated to more than 1,100 local and state governments on a formula basis, with $4.7 billion allocated in fiscal year 2005. Pennsylvania received nearly $249 million, but recent proposed budget cuts could reduce that amount by $70 million.

In 1984, the Pennsylvania Legislature passed Act 179, which established new rigid state guidelines for CDBG funds. The law stipulated that municipalities with a population of fewer than 4,000 were not eligible for entitlement funding but were eligible for competitive nonentitlement grants.

Presently, only six municipalities in Cambria County qualify for yearly entitlement funding: Adams, Cresson, Jackson and Cambria townships, Northern Cambria Borough and the city of Johnstown.

It is worth noting that of the 2,563 municipalities in the commonwealth, the majority of boroughs and townships, 1,854 or 72 percent, fall below the threshold of 4,000 population required for entitlement status

Municipalities can always turn to state agencies that offer grant funding for shared government services, community recreation projects, low interest loans, etc. However, most of these grant programs require a substantial match of funds.

Many municipalities in our region must forego grant opportunities since their budgets are at the breaking point, with little flexibility to go after grants.

It seems clear that some municipalities are having a difficult time improving their fiscal health because state and federal funding levels to local governments continue to be shortchanged and underfunded. Perhaps our local legislators would support an economic stimulus program to reinvest in our municipalities by returning 10 percent of the sales tax collected in Cambria County.

This special reinvestment program could be as much as $4.4 million of the nearly $440 million sent to Harrisburg in 2006-2007.

Revitalizing distressed communities in our region is both essential and difficult. But, no one should dispute the fact that many of our communities need help – now.

One does not have to be a demographer or statistician to recognize that the fiscal health of many of our communities are on the decline.

These once-vibrant communities must be at the centerpiece of a “back to prosperity movement” that begins with a strong commitment by state and federal officials to look for alternative funding mechanisms that expand the financial capacity of our municipalities, without raising taxes.

Perhaps our presidential candidates should be encouraged to participate in these discussions.

Finally, we should encourage everyone to roll up their sleeves and get involved in the political process by becoming more proactive. When was the last time you attended and spoke your views at a municipal meeting?

Engagement and mobilization from all of us who are concerned about our communities is just the first step in building a brighter future for our children.



David A. Knepper of Adams Township has held several professional positions: Cambria County community and economic development specialist, school superintendent, principal and college teacher. He holds a doctorate in educational administration from Penn State. Presently, he is executive director of the Forest Hills Regional Alliance.

        

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