Baltimore City’s Spending Of Federal Community Development Block Grant Dollars For Economic Development is Less Than Comparable Cities

September 1994 / Abell Reports / Community Development

The cornerstone of Baltimore’s economic development during the burgeoning 1970s was its ability to leverage federal, state, and private resources; today, even though those resources are scarce, Baltimore spends little of the federal funds that are available for job creating and tax producing activities. Is a reallocation needed?

The Time cover story of August 24, 1981, featured James Rouse and Baltimore’s Inner Harbor; its title proclaimed, “Cities are Fun.” For Baltimore’s spectacular develop­ment of its inner harbor and other dramatic redevelopment efforts, the city was hailed as one of the most innovative cities in America. From around the world, urban officials flocked to Baltimore to learn the secret of the city’s economic devel­opment success story.

The cornerstone of Baltimore’s economic development program during the 1970s and 1980s was its ability to leverage federal, state, and private sector resources. Federal pro­grams like the Urban Development Action Grant (UDAG), Urban Renewal, and the Community Devel­opment Block Grant (CDBG) helped the city to build a new downtown, establish a tourism industry, and be­gin crucial inner city neighborhood revitalization. With Federal Economic Development Administration funding, the city worked aggressively to aid industries through outreach initiatives and business park devel­opment. Small Business Administration opportunities were exploited to offer an array of financing pro­ grams for business. Department of Labor resources helped to make critical employment and training link­ages. In addition, state programs were tapped and city bonds were floated to help meet local requirements. Whenever possible, private sector participation was encouraged, creat­ing what are now known as public­ private partnerships.

Today, federal resources are scarce and Baltimore, like other cit­ies, struggles to fund economic development activities in light of other pressing needs. But unlike other cit­ies that have managed to acquire public funds and put them to work in job­ creating programs, Baltimore spends little of the federal funds that are available on job-creating and tax-pro­ducing economic development activities. Largely because of this decision, Baltimore in the 1990s lags behind its urban counterparts through­ out the country in local economic development spending and initiatives. This lost opportunity costs the city taxes and jobs, further stagnating an already perilous local economy.