City could get housing funds from economic stimulus plan $13.5 million would come from Clinton program

February 06, 1993|By Karen Hosler | Karen Hosler,Washington Bureau

WASHINGTON -- Baltimore stands to gain a one-time infusion of $13.5 million in community development funds that President Clinton plans to include in the short-term economic stimulus package he will present to Congress Feb. 17.

Mr. Clinton outlined his plans yesterday at a White House gathering of 31 big-city mayors, including Baltimore Mayor Kurt L. Schmoke, to discuss how the cities could best use a new spurt of public-works money in the package.

In putting together what is expected to be a $16 billion program of public spending matched with a $15 billion package of tax incentives to spur private investment, Mr. Clinton told the mayors he would include "a fairly significant increase" in the Community Development Block Grant program. Participants in the meetings later said that the amount of the increase is tentatively set at $2 billion.

Baltimore already receives $27 million each year from the $4 billion block grant program. Its share of the increase would be about $13.5 million, a 50 percent boost.

"Needless to say, we are very pleased with this," Mr. Schmoke said. But he noted that Mr. Clinton had cautioned that final decisions haven't been made.

Mr. Clinton's announcement comes at a time when Baltimore's housing agency has come under scrutiny for having amassed $52 million in unspent federal funds. The housing commissioner, Robert W. Hearn, has blamed delays in spending the money on regulations of the Department of Housing and Urban Development, although other city and HUD officials have said the delays stem from inefficiency within the city housing agency.

The president also moved yesterday to free $11 billion in public housing money already approved by Congress that he says was tied up in administrative red tape at HUD by the Bush administration.

"We can keep you busy for a year, if we can get the department running right," Mr. Clinton told the mayors.

HUD Secretary Henry Cisneros had urged mayors to bring to the meeting examples of projects that could be financed immediately if the money were made available.

Mr. Schmoke said he showed the president 300 city-owned houses that are ready for renovations whenever the cash begins to flow.

"I could do a lot of things with that money," Mr. Schmoke said.

The community development block grant program was one of the tools Baltimore used with great success in the 1970s to finance the renaissance of the Inner Harbor area and refurbish other parts of the city.

But during the 12 years of the Reagan and Bush administrations, Democratic lawmakers had to fight just to keep the program in the budget without any increases. Because of inflation, that meant that the program was effectively cut by a few percentage points every year, Mr. Clinton noted.

Despite the slowdown in funding, Baltimore has piled up $52 million in unspent funds administered by the U.S. Department of Housing and Urban Development, including $42 million in block grant funds.

The block grant funds may be used to improve living conditions for low- to moderate-income residents, but Robert W. Hearn, Baltimore's housing commissioner, said this week that the city has a limit on housing stock.

Baltimore and the rest of the state would benefit in several other ways from the stimulus package Mr. Clinton outlined.

The president said he plans to "accelerate" transportation funding for projects approved by Congress in 1991 but not yet financed. He did not provide a specific figure, but congressional leaders have urged him to include $5 billion to cover all remaining highway projects.

Mr. Clinton also is expected to seek enough money to expand the Head Start program for low-income children to include 3-year-olds as well as 4-year-olds, and to finance a universal vaccination program. That money wouldn't add much in the way of new jobs, but it would address two problems the Clinton administration has identified as urgent.

In the private investment part of his stimulus package, Mr. Clinton hopes to include money for an enterprise zone program.

He asked the mayors yesterday to support his preference for a two-year experimental program that would provide substantial incentives for 50 cities, rather spending the same amount of money on a broad program for 150 cities that wouldn't be able to do much for any of them. He did not win an immediate endorsement of this approach, however, because of fierce political competition between cities for scarce federal funds.

All the programs for the cities Mr. Clinton announced yesterday were consistent with promises he made during his re-election campaign, according to Mike Brown, a spokesman for the National League of Cities.

"We're pleased he's keeping his campaign promises," he said.

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