Great Barrington — If they come to fruition, the Trump administration’s proposed budget cuts could have a profound effect on organizations in the Berkshires that deliver everything from Meals On Wheels to affordable housing.
Of particular concern to those who work in social services are the proposed abolition of the federal Community Development Block Grant program and the deep cut in the budget of the U.S. Department of Health and Human Services.
Run by the Department of Housing and Urban Development and distributed by the states, the CDBG program this year had a budget of some $3 billion, while the HHS budget is slated to be trimmed by a whopping 18 percent. The president proposed the reductions as part of $54 billion in cuts to domestic programs to boost military spending, to pay for his as-yet-unspecified intention to reduce corporate taxes, and to fund a wall along the Mexican border.
But it remains to be seen whether Trump will get his way. In an interview with The Edge, Congressman Richard Neal (D-Springfield) said he does not think Trump’s cuts will see the light of day.
“I don’t think the proposed cuts are well thought out,” Neal said. “They’re not likely to be successful. There is broad support for Meals on Wheels, CDBGs, the NEA, NIH, and CDC.”
Even so, those who run organizations dependent on the grant programs are nervous that they will be adversely affected, if not by the proposed cuts in their current form, then by a compromise budget that still includes significant cuts in federal aid.
John Lutz is executive director of Elder Services of Berkshire County in Pittsfield. The organization’s regional nutrition program regularly serves approximately 3,000 seniors annually across the county.
Each year, more than 45,000 meals are served at 15 congregate meal sites — largely at senior centers such as Claire Teague in Great Barrington. Meanwhile upwards of 220,000 Meals on Wheels are hand-delivered to mostly housebound Berkshire seniors.
Of Elder Service’s $1.77 million nutrition budget, $581,500, or almost 33 percent, comes from federal sources. Many Meals on Wheels programs receive federal funding through the CDBG program. Elder Services gets the bulk of its funding through the Older Americans Act, passed during the administration of Lyndon Johnson and the first federal-level initiative aimed at providing comprehensive services for older adults. Lutz says the bulk of that money ultimately comes from HHS, whose budget Trump wants to slash by the aforementioned 18 percent.
“The loss of federal dollars to support the Elder Nutrition Program, which represents one third of the program’s funding, would present a significant challenge to replace and would likely result in service reductions,” Lutz told The Edge.
But Lutz emphasized that perhaps the most significant part of the program is the role the meals program plays in monitoring seniors, or what he calls “the daily wellness check” or the “early warning system.”
“Whenever someone delivers a meal, they see the whole person, the environment, whether anything is amiss,” Lutz explained. “They’re really the front line warning for [seniors’] health.”
For many seniors, the daily nutrition program is the difference between being able to live alone and having to go to an assisted living facility or a nursing home, often at state expense. The program therefore saves considerable money for taxpayers, Lutz said.
And it’s not just nutrition for seniors that CDBG and HHS money helps fund. Officials say the CDBG program has made a significant difference in Great Barrington alone. Over the last 10 years, the town has received $2.5 million from the CDBG program: one in 2008, and three others from 2014 to 2016, two of which were shared with the town of Sheffield.
The CDBG is especially targeted to so-called “slum and blight” communities such as the Housatonic section of Great Barrington, so designated because of the income level, the vacancy rate and overall condition of its homes.
The town has received grants of hundreds of thousands of dollars for infrastructure improvements in Housatonic, such as new sidewalks, drainage and streetscape enhancements, Town Planner Chris Rembold said.
Last year, Sheffield used a portion of the grant funds to complete the architectural barrier removal at Sheffield’s historic Town Hall, which implemented design work funded three years ago, and resulted in a town hall that is accessible to all residents.
Indeed, then-Gov. Deval Patrick traveled to the Berkshires in July of 2014 to announce on the steps of the Housatonic School $27.5 million in federal Community Development Block Grants (CDBG) for 54 cities and towns across the state, including $803,100 for the combined application from Great Barrington and Sheffield.
“One of the key elements of the CDBG program is also housing rehabilitation programs,” Rembold explained. “Towns can use funds so that low- and moderate-income homeowners can get grants to improve or repair their homes.”
Some homes are old and their owners are unable to afford necessities such as a new roof, a boiler replacement or foundation repair. The town has used CDBG grants to fix about 20 homes. As Rembold noted, the town not only needs new affordable housing; it needs to hold onto the affordable housing it already has.
“Someone could get kicked out of their house if these needs are not taken care of,” Rembold told The Edge, “A grant of $10,000 to $20,000 can be really important for accomplishing these really basic needs. These are not luxurious; they’re very basic housing and shelter needs. These people pay their taxes, and in most cases work locally.”
If the CDBG funds dried up, then municipalities would have to look at alternative means of funding through the state level or by raising taxes. Neither is appealing in an era of lean-and-mean budgeting.
Trump’s budget director, Mick Mulvaney, said last month that $150 billion had been spent on block grant programs since the 1970s, and the programs were “just not showing any results.”
“I would invite him to come to Housatonic and take a little tour,” Rembold said.
Last year, the state received some $91 million from the CDBG program, according to the Massachusetts Municipal Association.
“The CDBG program has also been an invaluable tool in combatting the housing shortage in the Commonwealth, ” said Geoff Beckwith, executive director of the MMA. “Over the [last] seven-year period, CDBGs have rehabilitated more than 3,000 housing units and repaired or rehabilitated more than 300,000 linear feet of public infrastructure.”
Over at the Community Development Corporation of South Berkshire, Executive Director Tim Geller says he’s not concerned about losing direct federal aid but he and his board are keeping a close eye on a Trump proposal to lower the corporate income-tax rate, in part because CDC is in the process of developing an affordable housing project at 100 Bridge Street.
Dramatically lowering the corporate rate could have a significant effect on the Low Income Housing Tax Credits (LIHTC), which Geller characterized as “the cornerstone of affordable housing development across the country,” creating “2.8 million rental units in the last 30 years.”
“If the corporate tax rate were to fall from 35 percent to 15 percent, the demand for these tax credits would significantly decrease and, hence the value — the amount a corporation is willing to pay for a credit — would drop precipitously,” Geller said.
Indeed, Geller said the uncertainty created by Trump’s stated desire to lower the corporate rate has already has kept multiple projects in Massachusetts that were fully funded in 2016, from being able to close on financing and start construction. The budget gaps in larger projects as a result of this uncertainty can run into the millions of dollars.
“For affordable housing developers, this has made an already highly competitive state financing situation, into an extremely difficult and competitive situation,” Geller said.
Back in Washington, Neal is the ranking Democrat on the powerful Ways and Mean Committee, the chief tax-writing committee of the House of Representatives.
“We will be fully thrust into the conversation about reshaping and revamping the tax code,” Neal said. “If you put Trump’s current budget in front of the full House, it would have no chance of passing.”
Neal added that Trump has a history of bluster and either not delivering or actually backing down. He cited the promised repeal of Obamacare and talking tough on China as examples.
“The Chinese president came and went and Trump did not call him a currency manipulator,” Neal said of the recent visit of Xi Jinping. “The rhetoric is jarring. Now there’s the reality.”
Of the funding programs prized by the Berkshires and other communities, Neal added, “Some of these issues supersede party affiliation. I think you’d find every mayor in America, whether Republican or Democrat, likes the CDBG program.”