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Fiscal Year 2013 Emergency Solutions Grants Program Budget Allocation Reduction

May 30, 2013
Fiscal Year 2013 ESG Budget Allocation

HUD recently announced that the total Emergency Solutions Grants program (ESG) allocation for FY 2013 is $215 million, which is a $71 million reduction from the Fiscal Year (FY) 2012 funding amount. This year, the ESG allocation was affected by a shortfall in the Homeless Assistance Grants appropriation to cover both increased renewal demand in the Continuum of Care (CoC) program and maintain ESG funding at the FY2013 level. The existing shortfall was further affected by the 5 percent Sequestration reduction. Congressional direction to HUD in handling the CoC/ESG funding shortfall was to mandate that at least $200 million be allocated to ESG, which became $190 million after the 5 percent sequestration cut. However, HUD chose to allocate $215 million to ESG, $25 million over the Congressional minimum. 

View FY 2013 Formula Allocations

Factors Affecting Individual Recipient Allocations
Changes in the number of ESG entitlements and individual recipient allocations are largely due to the application of the recent American Community Survey (ACS) data to the Community Development Block Grant (CDBG) program formula. Because the percentage of ESG funds allocated to ESG recipients is determined by the percentage of the total allocation of CDBG funds for the prior fiscal year, the use of ACS data for the CDBG formula in FY 2012 has affected ESG recipients’ FY 2013 grant amounts. 
Following the 2000 Census, the Census Bureau began transitioning to the ACS, an annual survey. The ACS is generally the same as the long form used for the decennial Census and now provides the most comprehensive, nationwide source of data for demographic, social, economic, and housing characteristics. The law implementing the CDBG program requires the use of “the most recent data compiled by the United States Bureau of Census” for allocating CDBG funds (42 U.S.C. ch. 69, sec. 5302 (b)). For this reason, the CDBG formula, which accounts for population, poverty, overcrowded housing, pre-1940 housing, and growth lag, began using ACS data in FY 2012. 
The transition from Census to ACS data has caused significant changes in grant amounts for some CDBG and ESG recipients. HUD’s Office of Policy Development and Research did a report examining the possible effects of using new data from the ACS and 2010 Census for the CDBG formula. The analysis is only a simulation since the FY 2011 CDBG allocation amount and recipient universe were used to measure the impact of the transition from Census to ACS data on recipients’ FY 2012 grant amounts. However, the report helps explain how the differences between the Census and ACS estimates reflect distinct methods used by the two surveys in addition to changes in conditions between the two time periods.  

Review the report for a more comprehensive explanation about the transition from Census to ACS data and the implications on CDBG and ESG grant amounts.

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