DCED facing grant cutbacks beyond WAMs

With Gov. Tom Corbett slashing the Department of Community and Economic Development in his proposed budget, economic and community development grants also have taken a hit.

The $65.5 million in “Walking Around Money,” or WAMs, reintroduced in last year’s budget, were taken back out in Corbett’s proposed budget released Tuesday. WAMs were legislatively directed economic development grants, administered by DCED.  

According to DCED, a combined $70 million was cut between WAMs and community revitalization grants, as part of Corbett’s “streamlining.”

“What we have done at DCED is to streamline an agency that, frankly, looked like the back of an old radio,” said Corbett in his budget address Tuesday. “Too many good ideas entered at one end and never found their way through the wires. Where once there were 127 programs there are now 56. Additionally, we have straight-out eliminated line items that produced little more than spending.”

Gene Barr, vice president of government and public affairs at the Pennsylvania Chamber of Business and Industry, said streamlining DCED was supported by the business community.

“You had a number of programs come into place that are duplicative,” said Barr. “We believe the streamlining is necessary. Our members have told us they’re not willing to have tax increases to pay for these programs.”

The Pennsylvania First grant, to encourage Pennsylvania businesses to compete with other states, was cut from $41.36 million to $25 million. The $6 million grant for Local Government Resources and Development was eliminated.

The grant for Partnerships for Regional Economic Performance was cut from $15.5 million to $12 million. The $10.5 million grant for Urban Development was eliminated, and the $181,000 grant for Rural Leadership Training was eliminated.

The Housing and Redevelopment Assistance’s funding of $17.85 million was eliminated. The Homeowners Emergency Mortgage Assistance’s funding of $10.47 million also was eliminated. The $800,000 grant for Infrastructure Technical Assistance was eliminated, and the Infrastructure and Facilities Improvement Grants were cut from $27.27 million to $23.4 million.

The Cultural Activities grant and the Cultural Preservation grant were both eliminated, worth $2.4 million and $2.7 million, respectively.

Some grants, however, fared better.

The Keystone Communities grant of $9.99 million was increased to $12.5 million, and the Municipal Assistance Program’s budget of $532,000 was increased to $683,000. The Appalachian Regional Commission grant was increased from $817,000 to $999,000. The Discovered in PA, Developed in PA grant was funded again, for $10 million.

The grant for Life Sciences Greenhouses, after going unfunded, would be available in this budget for $3 million.

The proposed cutbacks to community economic development grants are not just occurring at the state level--the federal government is considering cutting up to 62 percent of Community Development Block Grants, used at the municipal level in Pennsylvania.

Even with all the streamlining, Barr said Pennsylvania has a long way to go, and reliance--or cutting back--on state issued grants is not how business in the Commonwealth will pick up again.

“Real long-term growth is going to come from structural reforms, legal reforms, working on our tax structure here in Pennsylvania,” said Barr. “These are going to do much better for economic development in the future. These programs are really supplements to a good business climate, which, unfortunately, Pennsylvania has lacked over the years.”

Other special funds managed by DCED also saw cutbacks.

The Ben Franklin Technology Development Authority Fund was cut from $52 million last year to $36.5 million this year. Similarly, Minority Business Development Fund will see its budget shrink to $1.7 million from  $2.7 million, as will the Small Business First Fund--$29.3 million from $39.2 million.

Still other funds went untouched, such as the Broadband Outreach and Aggregation Fund for $1.8 million; the Home Investment Trust Fund for $1.17 million; and the Local Government Capital Project Loan Fund for $1 million.

Eric Epstein, coordinator for RockTheCapitol, a government reform advocacy group, said the proposed budget does not address three structural problems Republicans--and Corbett--promised to address when they were on the campaign trail.

“If you haven’t addressed pensions, prisons or property taxes, what relief have you actually provided to taxpayers?” said Epstein.

Epstein has long railed against WAMs and per diems, the latter of which are daily payments to legislators. Per diems are reimbursement for legislators’ “incidentals” when they are in session, capped at $163 for those who travel more than 50 miles to Harrisburg and $52 for those who travel less than 50 miles. Receipts are not required.

He argued the meager cuts to the Legislature’s fund--$300 million to $296 million--and the continuance of per diems was made in exchange for eliminating WAMs from the budget.

“They still get per diems. They still get an unrealistic pension. They still get health care after retirement,” said Epstein. “The governor and the Legislature need to live under the roof as the rest of us, and they’re not.”

Darwyyn Deyo is a reporter for PA Independent.