Public Policy Forum Blog

Public Funding for Community Development on the Decline

In recent years, concerns have been raised by neighborhood-based organizations in Milwaukee regarding the stability of key public funding sources that support their programs. Our new report analyzes the extent to which local community development efforts have been impacted by federal, state, and local government funding levels by examining funding trends for nine key programs identified by neighborhood organizations as crucial to their work:

  • Community Development Block Grants (CDBG)
  • HOME Investment Partnerships Program
  • Weatherization Assistance Partnerships Program
  • Head Start
  • Title 1
  • 21st Century Community Learning Centers (CLCs)
  • Workforce Innovation and Opportunity Act (formerly WIA)
  • Community Services Block Grants (CSBG)
  • Substance abuse grants

The report provides information on how government appropriations at the federal and state levels make their way to Milwaukee and its neighborhoods and how funding for services in Milwaukee have been impacted in recent years by overall programmatic cuts or increases. The timeframe used – 2007 to 2015 – is long enough to illustrate funding changes that have occurred from before the Great Recession to the present.

Our analysis reveals the following observations:

The amount of public funding coming to Milwaukee is trending downward for most of the programs included in our analysis, which may indicate a reduction in service levels for those programs. Annual funding totals are at least 10% lower now than they were before the recession for seven of the nine programs we examined.

While reduced appropriations tell part of the story, the re-direction of federal or state dollars from Milwaukee to other parts of the state also is a factor. In some cases, funding for Milwaukee programs decreased despite increased appropriations at the federal and/or state level, as increased poverty levels throughout the state produced a shift of funding away from Milwaukee and toward other areas

To sustain the services supported by the programs we examined, efforts will be needed to supplement declining federal resources with local public funding, private sector support, or through service innovations. This is already happening for some programs. For example, the Milwaukee Area Workforce Investment Board has grown its overall budget despite declining federal WIOA dollars, and Milwaukee County’s Behavioral Health Division has attempted to maximize intergovernmental resources by blending some mental health and substance abuse services.

It is important to recognize that trends in public funding tell only part of the story when it comes to assessing the capacity of community-based agencies and local governments to effectively deliver needed services to Milwaukee neighborhoods. Service capacity also can be impacted by program efficiency, amounts spent on overhead, programmatic innovations, and a variety of other factors that go beyond dollars and cents. Nevertheless, we can conclude from this analysis that reports of steadily shrinking public sector appropriations for community-based services in Milwaukee are more than anecdotal.

As local leaders strive to strengthen Milwaukee neighborhoods, it is important to understand the trajectory of the public funding sources that support needed services for neighborhood residents. We hope this report offers insight that will help local policymakers, community development organizations, and philanthropists in their efforts.

Joe Peterangelo