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Miami Herald - Feb. 08, 2002

By Andrea Robinson

Miami-Dade officials said Thursday they'll fight to preserve the local empowerment zone, after learning the Bush administration is proposing to cut a key component in the economic revitalization program.
President Bush wants to eliminate grants for empowerment zones in 15 urban areas -- including Miami-Dade County. The administration argues that tax breaks and other incentives are a more effective way to promote economic revival.

The cut, included in Bush's budget proposal this week, is an about-face for the administration, which a year ago requested $150 million in grants for 15 empowerment zones. Congress provided $45 million.

Miami-Dade County Manager Steve Shiver said county analysts are reviewing the budget numbers and examining how they could affect the local economy.
''We're trying to make sure those dollars aren't taken out. We want to reap the full benefits of the empowerment zone,'' Shiver said.

Miami-Dade was awarded an empowerment zone designation in 1998. The program seeks to revitalize impoverished areas through grants as well as tax breaks and credits for businesses.

Dade's zone is a 13-square-mile area that takes in eight of the county's poorest neighborhoods -- Overtown, Liberty City, Allapattah, East Little Havana, Wynwood, Melrose, Florida City and Homestead.

The county has received $19 million in federal grants over the last three years. Bryan K. Finnie, director of the county's Empowerment Trust, said the bulk of that money didn't come until 2001. Another $3 million is scheduled to arrive this year.

Of the monies we've received, the empowerment zone has allocated in excess of $20 million for projects,'' Finnie said.

He added that federal monies went toward strategic planning costs, microloan programs, public service initiatives in zone neighborhoods, equity investments and facade and street improvements. Just recently, $4.6 million was loaned to Leasa Industries in Liberty City for plant expansion.

Finnie said some grant funds were used as leverage to attract state, local and private funding. Projects on the table include a mixed-income, semi-gated community in Overtown and a revolving loan fund for small businesses.

But the Bush administration has questioned whether cities are fully using the grants.
''The president's budget request places a premium on programs that demonstrate results,'' said HUD spokeswoman Nancy Segerdahl.

``It's clear that many of these empowerment zones are not spending their existing grant funds, so this budget request will shift the focus toward providing tax incentives as a more effective vehicle to promote economic development and job growth in these communities.''
U.S. Rep. Carrie Meek, a Miami Democrat, said that many government-funded programs maintain unspent balances, including education and the military. She vowed to fight for the funds.
''Last year the president recommended the Congress fund urban empowerment zones at $150 million. This year he's recommending we completely zero out the program,'' Meek said. ``There has been no change in the other tax laws and supports in the empowerment zones. Yet this year, in the midst of a recession, the president recommends zeroing out this program, which is designed to help the poorest neighborhoods in one of the nation's poorest cities.''

Meek said a cut would cause a delay -- or termination -- of some economic development plans in the empowerment zones.

There will be at least six weeks of hearings on the budget, starting with the House Appropriations Committee, on which Meek serves. Those hearings are scheduled to begin the first week in March. -