AUGUSTA – Economic development efforts across the state will suffer if President Bush’s proposed reductions in the Community Development Block Grant program are approved, say state and local development officials.

“We’ve already taken hits,” Economic and Community Development Commissioner Jack Cashman said. “We have seen reductions every year, even though Congress has not gone along with the deep cuts the president has proposed, and we hope they don’t go along with these cuts.”

The budget document criticized the CDBG program as being inefficient and not effective and proposes cutting the overall program by 25 percent.

“The state program provides help to the rural areas of the state,” said Orman Whitcomb, director of the Office of Community Development. “We have seen funding go from nearly $17 million in 2002 to $14 million this year, and under the proposal we would go down to about $10 million.”

The result of the cuts has been less money available for infrastructure and housing projects in rural areas of the state, he said. The program, because of its flexibility, has been a “very useful” tool in helping with infrastructure costs, Cashman said.

“There are economic development projects that probably would not have happened without this program,” he said, “and with less money, we will have to do less.”

For example, the state provided $3.6 million in grants to communities for public infrastructure in 2002. That has decreased to $3 million this year. Downtown revitalization grants have decreased from $1.2 million in 2002 to $800,000 this year.

In addition to the state-administered program, the state’s largest cities, so-called “entitlement” communities, receive CDBG funds directly. They are Portland, Bangor, Lewiston, Auburn, South Portland and Biddeford.

Bangor received just over $1 million this budget year, Portland $2.4 million and Lewiston nearly $1.2 million. All of the cities would see a 25 percent reduction under the budget proposal.

Bangor Housing Program Manager T.J. Martzial said the $7 million, 35-unit housing development at the old waterworks facility on the Penobscot River would not have been possible without $800,000 from the CDBG program.

“I don’t think that would have gone forward without that piece,” he said, “and we have used the program for several smaller housing projects as well.”

Martzial, who chairs the New England region of the National Community Development Association, said the proposed cuts would result in fewer housing projects in Bangor and in the other cities that receive direct federal dollars. He said it also would reduce the number of infrastructure development projects.

Members of Maine’s congressional delegation oppose the reduction. Sen. Olympia Snowe, a member of the Senate Commerce Committee that has jurisdiction over the program, said it has broad support because it has been effective.

“Only months after the Congress rejected cuts to the Community Development Block Grants program, we have before us another budget that would greatly reduce support for this essential program,” she said. “The fact is that this federal program works by giving communities throughout our state the best means of meeting the needs of some of our most disadvantaged rural and urban communities.”

Snowe said that since 1998 Maine communities have received millions in funding for economic development, housing and infrastructure projects through the CDBG program, resulting in the creation of nearly 3,800 jobs.

First District U.S. Rep. Tom Allen serves on the House Energy and Commerce Committee that has jurisdiction over the program. He agreed the CDBG program has been effective, but said he expects the program will get cut despite congressional opposition.

“Congress has pushed back against the president’s cuts in this critical program for economic development,” he said. “But while Congress pushes back, he always gets part of what he requests.”

Allen said he hopes Congress will not cut as deeply as the president has asked, but any cut is more than he believes is justified given the effectiveness of the program.

“I don’t know what the final number will be,” he said, “but I can guarantee he will be back next year trying to cut this program again.”