Cincinnati warns nonprofits to tighten up spending amid uncertainty over federal budget

CINCINNATI -- The city of Cincinnati has warned local nonprofits to tighten up their spending, the first tangible effect of the uncertainty surrounding President Donald Trump's budget plans.

City staff made phone calls to the nonprofits Friday; the city's Department of Community and Economic Development also sent a follow-up letter.

In some cases, the city might suspend payments to the nonprofits altogether.

The warning comes as federal lawmakers consider sweeping reductions to the U.S. Department of Housing and Urban Development. The president wants to pull federal dollars from domestic programs and move them to Homeland Security and the Department of Defense.

But, it's not clear if lawmakers will go along.

In Cincinnati, HUD grants pay for a home repair program helping elderly and low-income residents, initiatives to reduce homelessness, along with many other efforts. The city manages how HUD dollars are spent locally.

If Congress passes anything close to Trump's plan, City Manager Harry Black warned the cuts could be "extreme" and "drastic."

Last year, for example, Cincinnati received nearly $13 million from HUD's Community Development Block Grant, or CDBG, program. Trump's budget plan would eliminate CDBG funding entirely.

HUD also sends Cincinnati money from three other programs:

  • HOME Investment Partnerships
  • Emergency Solutions Grant
  • Housing Opportunities for Persons with HIV/AIDS

Trump has put HOME funding on the chopping block, too.

HUD typically gives some indication early in the year of how much money it expects to give out for each program. The city spends its own money to cover costs until the federal government sends funds. That money reimburses the city for what it's fronted up to that point.

HUD has, in the past, announced funding in mid-February. But not this year. As of late March, HUD hasn't indicated how much each program might get.

That's left the city and nonprofits in limbo.

Black told Mayor John Cranley and City Council last week the uncertainty is complicating the city's budget plans. Cincinnati already faces a $25.1 million deficit.

If lawmakers do make deep cuts to HUD, City Council might try to make up the difference so local programs aren't lost.

Black plans to give his budget to Cranley by May 18.

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