FY 2013 CDBG Formula Allocation

The City of Champaign received a slight increase in FY 2013/14 funding ($704,817) from FY 2012/13 ($702,739). This final figure is contrary to our original estimate of $645,114, which was based on federal information and our national trade organization reports. The following information from HUD provides an explanation of the funding allocation. Staff is now working on appropriate activities for the additional funding.

The Community Development Block Grant Program (CDBG) experienced a net increase in funding from FY 2012 to FY 2013. The FY 2012 HUD appropriations law directed that $300 million of the CDBG funding appropriation be allocated for disaster recovery; this reduced the funding available for formula distribution in FY 2012 to $2.94 billion. That set-aside for disaster recovery grants did not carry over to the FY 2013 Continuing Resolution, which provided $3.07 billion for CDBG formula funding. After the mandatory reductions due to sequestration and an across-the board recession, the result is a 4.4% increase in CDBG formula national funding levels from FY 2012 to 2013.

However, not every CDBG grantee will see a 4.4% increase. Beginning in FY 2012, HUD uses Census Bureau American Community Survey (ACS) data as the source for most demographic data in computing formula allocations. ACS data is updated annually and is based on five year weighted average data, so every grantee’s formula demographics will change every year as a new year’s data is introduced. The FY 2012 allocations were computed using 2005-2009. The FY 2013 allocations are computed using 2006-2010 ACS data, which relies on the Census 2010 counts as new weights for estimating the CDBG formula variables. The slight increase in funding ameliorates some of the effects caused by introducing new data. However, some CDBG grantees will see increases of more than 4.4% in their FY 2013 funding, while others will see a smaller increase or even a decrease. 

HUD has posted a new, interactive map tool on its website to illustrate the effects of the new data on individual grantees’ FY 2013 CDBG allocations. Viewers can click on any CDBG Entitlement jurisdiction in the country to see how each jurisdiction’s grant changes from replacing the 2005-2009 ACS data with newer 2006-2010 ACS data into the CDBG formula. This page also provides answers to Frequently Asked Questions about the use of ACS data in the CDBG program formula. HUD’s 2011 report, “Redistribution Effect of Introducing 2010 Census and 2005–2009 ACS Data into The CDBG Formula,” provides further information on how the CDBG formula works and on the initial effects of introducing ACS data into the formula in FY 2012.