Community Development Corporations Get $50M Increase in CT Budget

Community development corporations have long been active in Connecticut, and the state will begin officially certifying them as a step to funneling more money to support their work in strengthening struggling neighborhoods.

Governor Ned Lamont on Monday signed a budget adjustment for fiscal year 2023 that would allow the state to borrow up to $50 million to support community development corporations, or CDCs, under a new program of the State Department of Economic and Community Development.

The DECD will establish a Community Economic Development Assistance Office to work directly with nonprofit CDCs as long as eligible nonprofits have boards of directors that live in the communities they exist to support and s align demographically with these neighborhoods.

A department spokesperson said the DECD is still analyzing the next steps in setting up the new office.

The initiative was incorporated into the state budget adjustment bill after the Connecticut General Assembly failed to move forward on a standalone bill to create a $100 million program, which would have included a tax credit to attract more private sector investment in CDCs.

Lamont’s acting budget chief opposed the standalone bill in March when he testified before the Connecticut General Assembly’s Finance, Revenue and Surety Committee.

But the idea had champions in the General Assembly, including Sen. John Fonfara, D-Hartford.

“A community development corporation can transform communities, and it has a history of that across the country,” Fonfara said, speaking in March at a finance, revenue and bond committee hearing. “We just haven’t had much in Connecticut.”

Community Development Corporations date back more than half a century, with Robert F. Kennedy promoting the concept while serving as a US Senator in New York. The National Alliance of Community Economic Development Associations estimates that there are more than 4,500 organizations nationwide that identify as CDC.

Aside from their 501(c)3 status as a nonprofit, CDC bears no other official government designation, and many nonprofits use the term to describe their activities. Under the budget provision Lamont signed Monday, the new OCEDA office at DECD would offer formal certification to community development corporations operating in Connecticut.

The DECD is also responsible for promoting the formation of new CDC nonprofit organizations, if it detects opportunities where they could make a difference.

“It will give a community like North Hartford the opportunity to create a CDC where none currently exists,” said Vicki Gallon-Clark, executive director of the Blue Hills Civic Association in Hartford, during the hearing. March of Finance, Revenue and Bonding. Committee. “I have a co-worker that I keep in close contact with in New Haven, and he shared with me examples of how residents come together to make these local decisions in partnership with area employers, and they do amazing things – and I know we could do the same here in Hartford.

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Norma P. Rex