Federal funds from the Department of Housing and Urban Development's Community Development Block Grant (CDBG) program boost local economies through a variety of projects that address development, housing, economic infrastructure and low income needs. ARRA includes an extra dose of those funds, and cities and counties are preparing to use the money to create jobs while improving their residents' lives.

CDBG will receive an extra $1 billion from ARRA in addition to $3.9 billion in the recently passed omnibus spending bill, and President Barack Obama's proposed fiscal year 2010 budget calls for $4.5 billion for the grant program. That funding comes on the heels of several years of cuts and threatened cuts to CDBG under President Bush's administration, says Mike Wallace, senior legislative counsel for the Washington-based National League of Cities (NLC).

In fiscal year 2009, the Bush administration had proposed to fund the program at an even $3 billion. NLC and other local government associations urged cities to invite their federal representatives to see CDBG-funded projects first hand and fight for more funding. “That made the impact of the program real, and I think that's how we won that battle,” Wallace says. The Obama administration also is friendlier toward the program, he added.

However, the years of CDBG budget cuts, coupled with the loss of revenue from other sources, led many communities to cut staff in their community development offices. “Many cities have lost capacity for community development because of these cuts, and now they have to quickly rebuild,” Wallace says.

Riverside, Calif., is expecting about $2.7 million in ARRA-related CDBG funds, and the county is reviewing potential projects to build, says Tom Freeman, spokesperson for the Riverside County Economic Development Agency. The projects under consideration include expansion of the county's libraries and senior centers. “Once [the contractors working on the projects] make that money, of course, they're going to have to spend it and put it back into the local economy,” he says. “With an unemployment rate at 12.6 percent, one of the highest in the state, this money is absolutely essential.”