Too Soon to Lock in DC Tax Cuts

June 25, 2015

Life is full of surprises, they say. So is the District of Columbia’s budget. I’m referring here to the Budget Support Act, the package of legislation that’s paired with the spending bill.

Turns out that the BSA the DC Council will soon take its second required vote on could trigger tax cuts before either the Mayor or the Council knows how much the District will need to spend just to keep services flowing — let alone how much it should spend.

Whoever knew? Doubtful all Councilmembers did, since Chairman Mendelson distributed the final BSA shortly before the first vote. Other interested parties surely didn’t because it wasn’t published.

And one would have needed time to figure out what the Chairman had done because his bill doesn’t spell out how it would change trigger provisions enacted as part of last year’s BSA.

Well, we know now — or could, thanks to a heads-up from the DC Fiscal Policy Institute and a DC for Democracy post that adds some angles.

The basic issue here — though not the only one — is when tax cuts recommended by the Tax Revision Commission should go into effect. Both the original BSA provision and the new version require a revenue projection higher than an earlier one.

Tax cuts wouldn’t all kick in at once, since that would immediately throw the budget out of balance. Last year’s BSA ranked them in priority order. The ranking would stay the same. But that’s as far as the parallels go.

Set aside for a moment the egregious lack of transparency. What’s wrong with the latest plan for triggering tax cuts based on rosier revenue projections? Three big things.

Tax Cuts Take Priority Over Spending Needs

The new plan would dedicated all of the projected revenue increase to tax cuts, rather than the excess over a threshold set by the current BSA.

And it would do that before the Chief Financial Officer had estimated the costs of sustaining existing programs in the upcoming fiscal year. These tend to rise for various reasons, as DCFPI notes.

Beyond that, we’re not spending as much as we should in a number of areas — affordable housing and homeless services, to name just two. This year’s budget makes some progress on both. But further progress will stall if the Mayor and Council can’t allocate the revenues needed.

Without them, the Housing Production Trust Fund — the single largest source of financial support for affordable housing construction and preservation — could have less next fiscal year, since half of the $100 million it has now reflects a one-time appropriation.

The next steps envisioned in the latest strategic plan to end homelessness in the District also hinge on further investments. For example, the plan envisions year-over-year increases in permanent supportive housing for families, plus some rapid re-housing vouchers extended past the usual one-year limit.

It also calls for some indefinite-term vouchers earmarked for families and single adults who can’t afford housing when they don’t need intensive supportive services any more or come to the end of their rapid re-housing extensions.

And at the risk of beating a dead horse, I’ll add that we’re likely to have homeless families until the Mayor and Council significantly increase Temporary Assistance for Needy Families benefits, which now, at best, leave a family of three at about 26% of the federal poverty line.

More generally, setting automatic triggers for a series of tax cuts denies both the Mayor and Council a chance to weigh priorities during budget seasons. Those tax cuts, recall, will mean relatively less in revenues not only next year, but every year — unless they’re repealed.

A whole lot harder politically to repeal a tax cut than to defer it until it won’t preempt spending that will do more good for more people than reducing tax obligations for some.

Cuts in the Offing Tilt Toward Well-Off Taxpayers

The Tax Revision Commission made nearly a dozen recommendations for cuts — a mixed bag if you believe that individuals and businesses should contribute to the general welfare according to how well they’re faring.

The Council adopted a couple that ease tax burdens for low and moderate-income residents. But those ranked highest in the BSA now don’t reflect a consistent preference for a progressive tax structure — far from it.

The second listed, for example, would reduce the tax rate on income between $350,000 and $1 million. Next on the list — and again in fifth place — are cuts in the franchise taxes that businesses pay.

The threshold for any tax on estates would increase to $2 million before filers would get larger standard deductions — the option virtually all low-income taxpayers choose because they’d pay more by itemizing.

Bigger Revenue Losses Than Recommended

The Tax Revision Commission recommended revenue increases to offset the losses resulting from its recommended cuts. The Council took a pass on two. The new BSA would do the same, forgoing $67 million, DCFPI reports.

So there’d be a straitjack on revenue growth — possibly indeed future shortfalls. The District has had these before — the latest only just remedied by savings found.

What the shortfalls tell us is that revenue projections are inherently iffy — the more so as they estimate collections beyond the upcoming quarter of a fiscal year. That’s just how forecasts are. Ditto projections of spending needs.

Who, for example, can foresee a prodigious snowstorm, requiring millions more to clear the roads than budgeted? Who, at this point, can predict how much crucial programs will lose due to federal spending cuts?

So it seems unnecessarily risky to plow ahead with tax cuts before next year’s budget is even on the drawing board. And if past is prologue, programs that help low-income residents are what the BSA would actually put at risk.

UPDATE: I’ve learned, from reliable sources, that the excess revenue threshold in the current BSA applied only to the forecast used as the basis for next fiscal year’s budget. Under the current law, tax cuts would kick in with any higher revenue forecast, but not until next February. The Mayor could, if she chose, ask the Council to approve using the extra for unmet needs instead.

So what I wrote about the current BSA is misleading, but my basic point that the new BSA would trigger cuts prematurely stands.

 

 


DC Moves Forward on Affordable Housing. House Republicans Pull Back.

May 18, 2015

Here in the District of Columbia, we’re hopeful about prospects for more affordable housing, especially for our very lowest-income neighbors — both those homeless now and those at high risk because they’re paying at least half their income for rent.

The Mayor’s proposed budget largely accounts for these hopes. Meanwhile, our Republican neighbors on Capitol Hill have decided to put a damper on our progress — and the progress of communities nationwide.

National Housing Trust Fund Defunded

The Mayor’s proposed budget would dedicate $100 million to the Housing Production Trust Fund — our largest source of public financial support for projects to build and renovate affordable housing.

This would double the amount the Fund has for the current fiscal year and probably expand the District’s affordable housing stock by 1,000 or more units, the DC Fiscal Policy Institute reports.

The District could have counted on a share of the revenues that at long last were to flow to the National Housing Trust Fund. But the House subcommittee responsible for the U.S. Department of Housing and Urban Development’s appropriations raided those revenues.

A bit of budgetary legerdemain here. Basically, the subcommittee cut funds for the HOME program, which provides grants to state and local governments for a wide variety of activities related to housing and home ownership.

But it then partially offset the cut by allocating to HOME all the funds that were supposed to go to the Trust Fund. And for reasons not altogether clear to me, it tucked into its bill a provision prohibiting any other funding for the NHTF.

The defunding — and the under-funding I’ll discuss below — were approved by the full Appropriations Committee last week, on a straight party-line vote.

So much then, so far as the majority’s concerned, for funds intensively targeted to rental housing for extremely low-income households, as only 40% of the District’s Trust Fund resources must be.

Federally-Funded Housing Vouchers at Risk

The Mayor’s proposed budget would expand the Local Rent Supplement Program — the District’s locally-funded version of the federal Housing Choice (formerly Section 8) voucher program.

LRSP would get an additional $6.1 million — $3.7 million for tenant-based vouchers, which go directly to extremely low-income households so that they can afford to rent at market rates, and $2.4 million for project/sponsor-based vouchers, which help cover the operating costs of housing that’s affordable for these households.

But it’s doubtful the DC Housing Authority, which administers both LRSP and Housing Choice, will have more vouchers to award.

The House HUD appropriation reduces the funding local housing authorities will have to renew Housing Choice vouchers. They’d be shy a total of $183 million of what HUD estimates they’d need to sustain all vouchers now in use.

Here in the District, about 280 fewer families would receive Housing Choice vouchers, according to a White House fact sheet. If accurate, this means that DCHA would have to retire even more vouchers than it did after the across-the-board cuts known as sequestration.

DCHA and other housing authorities may face similar problems with the contracts they’ve awarded to affordable housing projects. The President’s proposed budget included HUD’s best estimate of the cost of renewing all such contracts. The House HUD appropriations bill falls $106 million short of that.

Further Losses in Habitable Public Housing

A nationwide study conducted for HUD five years ago found a $26 billion shortfall in the funds needed to repair and renovate public housing units. DCHA alone figured it would need $1.3 billion to preserve and redevelop all the units it manages.

That was about a year ago, not long before Congress level-funded the public housing capital fund, leaving it with $625 million less than it had when the HUD study produced its shortfall estimate. And level-funding doesn’t translate into the same level and quality of goods and services, as all of us with personal and household expenses know.

The House Appropriations Committee has nevertheless cut funding for the capital fund by $194 million. Hard to see how this wouldn’t further increase the number of public housing units left vacant — or demolished — because they’re egregiously substandard or so damaged by fire, flooding and the like that repair costs exceed available resources.

Squeeze on Homeless Services

The Mayor’s proposed budget includes a range of investments to move the District forward toward the goal of making homelessness in the District “rare, brief, and non-recurring,” as the new Interagency Council on Homelessness strategic plan envisions.

Her budget also includes a more realistic estimate of the costs of providing emergency shelter for families during the winter months — a refreshing change from the past few years, when the Gray administration minimized family shelter needs and then had to shift funds from other human services programs to cover the costs of motel rooms.

As in the past, local funds would supply most of the homeless services budget. But the District also expects a small increase in homeless assistance funding from HUD.

The House Appropriations Committee would, in fact, provide a small, increase for the grants — $50 million more than approved for this fiscal year. For all intents and purposes, however, the grants would, at best, preserve the status quo.

No additional money to help communities achieve the goals set by the U.S. Interagency Council on Homelessness — a source for the District’s own ICH goals.

And lest I haven’t rained on this parade enough, the Mayor’s plan to expand permanent supportive housing includes an as-yet unreported number of Housing Choice vouchers supplied by DCHA. So we could be looking here at a robbing Peter to pay Paul.

Not the District’s fault. It’s what the Republican Congressional majority chose when it decided not to lift the caps imposed by the 2011 Budget Control Act, but instead to boost defense spending through another bit of budgetary legerdemain.

None of this is yet a cause for hand-wringing, though teeth-gnashing seems appropriate. A bill passed by one appropriations committee is a long way from becoming an agency’s budget.

But we’re a long, long way from a HUD budget that would meaningfully support the District’s commitments to more affordable housing and a lot less homelessness.

 

 

 


DC Homeless Count Shows Some Progress, Still Big Unmet Needs

May 13, 2015

On a single night late last January, nearly 7,300 people were counted as homeless in the District of Columbia, according to the Metropolitan Council of Government’s just-released report. Nearly half of them were adults and children together as families.

Both these figures are moderately lower than those reported for 2014. But over the longer haul, we see an upward trend in the homeless total, driven entirely by the sharp spike in family homelessness.

Nearly Twice as Many Homeless Families as in 2008

The count identified 1,131 homeless families, i.e. those in shelters or transitional housing. None reported on the streets, in bus stations or other places “not meant for human habitation.” And as I say virtually every time I report count figures, they don’t include nearly all families (or individuals) without a home of their own.

The latest family total is 100 fewer than in January 2014. But it’s nearly double the number counted in 2008, when the recession had just set in. Looked at another way, family homelessness has increased by well over 92%, despite the 2014 dip down.

High Percent of Homeless Families With Very Young Parents

The MCOG report includes a first-time-ever breakout of “transition age youth,” i.e., 18-24 year olds. For this we can thank the U.S. Department of Housing and Urban Development, which sets the data collection rules.

Here in the District, the count identified 1,103 TAY — all but 193 of them in families, i.e., as parents who had at least one child with them, but no parent or guardian of their own in the group. This means that nearly 64% of all adults in families counted were in their late teens or early twenties.

Now, this doesn’t mean that such a large percent of all homeless young adults in the District were parents who had babies and/or toddlers to tend and, insofar as they could, protect.

Far more single, i.e., lone, TAY than counted had probably found friends or relatives to give them a temporary alternative to the streets or the nasty singles shelters. It’s obviously one thing to let a young person sleep on your couch. Quite another to bring a mom and her newborn or understandably fretful two-year-old into your home.

It’s also likely that many single TAY who had no shelter of any sort didn’t get counted because unaccompanied youth generally don’t spend their nights where they’re reasonably easy to find — and often won’t admit they’re homeless when found.

The high percent of youth-headed homeless families is nonetheless striking. The TAY count isn’t the only indicator. MCOG, relying on facts and figures from last year’s count, says the median age for homeless D.C. adults in families is 25.

Fewer Homeless Singles, But More Unsheltered

The latest count found 3,821 homeless single adults, i.e., those who didn’t have children with them and thus didn’t qualify as family members, though some undoubtedly had spouses or partners sharing their plight.

The new figure is a tad lower than last year’s, which was somewhat higher than the figure for 2013. We don’t see a clear long-term trend. The latest figure, however, represents a decrease of about 9.2%, as compared to 2008.

Though the vast majority of homeless singles were in shelters or transitional housing, 544 were exposed to the elements or spending their nights in cars, vacant buildings, stairwells and the like. The unsheltered figure is nearly 150 higher than last year’s — and even a bit higher than in 2008.

With such (happily) small numbers, it’s hard to know whether we’re seeing a real uptick or merely the results of a more effective count. The District’s chapter in the MCOG report suggests the latter.

Fewer Chronically Homeless Residents

We do see what seems a genuine downward trend in the number of homeless singles identified as chronically homeless, i.e., those who’d been homeless for quite a long time or recurrently and had at least one disabling condition.

The January count found 1,593 of these singles — only 16 fewer than in 2014. But it’s the fifth year the number dropped, making for a 27% decrease since 2008.

The count also found fewer chronically homeless families, i.e. those in which at least one adult met the HUD definition I’ve linked to above. The latest figure — 66 — represents a marked drop from 2014, but that was a marked increase over 2013.

MCOG didn’t start reporting chronically homeless families as a separate group until 2011, presumably because HUD didn’t require grantees to do so. Looking back as far as we can then, we see a decrease of roughly 51%.

More Residents Not Homeless Because of Permanent Supportive Housing

Singles and families living in permanent supportive housing are rightly not counted as homeless, though most probably would be without PSH. They are, however, accounted for in the MCOG report and its members’ reports to HUD.

And here’s where we see the explanation for the relatively low chronically homeless figures, especially for singles. In January, 4,230 singles were living in PSH units in the Distric — an increase of 730 over 2014. This represents a whopping 115.5% increase since 2008.

We also find more families who’d like as not have been chronically homeless were it not for PSH. The District reported 1,128 of them, somewhat over three times as many as in 2008.

Not Just More Data Points

At this very moment, the DC Council is chewing over the Mayor’s proposed budget for the upcoming fiscal year. Both the progress and the challenges the new count indicates should persuade it to support her proposed investments in both homeless services and affordable housing, including PSH — indeed, to make at least some of them bigger.

And I, getting back on my hobbyhorse, see yet further justification for her proposal to extend a lifeline, though thin to the 6,300 families who’ll otherwise lose what remains of their Temporary Assistance for Needy Families benefits.

If they’re not already homeless, they’re likely to be. And as things stand now, a goodly number will have to fend for themselves until the next severe cold snap because the Mayor’s budget won’t cover the costs of sheltering all with no safe place to stay when the multifarious harms they’re exposed to don’t include the risk of freezing to death.

Like I said, some bigger investments needed.

 

 

 


DC TANF Program Short-Changed Core Purposes

April 23, 2015

My last post focused on the “cautionary tale” we can find in how states spent their Temporary Assistance for Needy Families funds. Now here, as promised, is what we learn about the District of Columbia’s TANF spending.*

The figures are somewhat dated, but they’re still relevant to decisions the DC Council must make as it works on the Mayor’s proposed budget for the upcoming fiscal year.

The District reported $254 million spent on TANF in 2013. Twenty-three percent went for cash assistance. This is a tad higher than the percent reported for 2012. But a family of three was still left at 26% of the federal poverty line. And that’s about where it is now, unless it’s one of the 6,300 families whose benefits have been cut three times already.

They’ll get zero, come October if the Council doesn’t approve the Mayor’s proposal to give them a one-year reprieve. Even if it does, our three-person family will have to get along somehow on $156 a month — roughly 9% of the current FPL.

The Bowser administration justifies the reprieve on the basis of continuing weaknesses in the employment component of the District’s TANF program.

I’ve previously reported the results of an audit that focused on outcomes for the parents facing benefit cut-offs who were actually referred to a contractor for job training and/or help in finding a job. Not encouraging.

But there are two other parts to this story. One is that some parents have had to wait for nearly a year to get those job-related services. This may be in part because the Gray administration froze additional funds for them.

And that’s perhaps because the Department of Human Services didn’t spend all the TANF employment funds in its budget, according to the new director. We certainly see what seems to be under-spending in the Center on Budget and Policy Priorities report I’m using here.

Only 15% of TANF funds spent on work-related activities in 2013. And even this was a marked improvement over 2012, when only 7% went for what surely ought to be a top priority for a TANF program.

At the same time, the District spent an unusually low percent of its TANF funds on administration and systems — 2%, as compared to a nationwide 7%.

This matters because the DC Council enacted exemptions from the benefits phase-out for families facing specified hardships, i.e., difficulties, beyond the usual, that parents would face trying to support themselves and their kids.

One, added for the current year, would temporarily stop the time clock for mothers with infants to care for. But the department hasn’t actually granted this exemption. The reason, we’re told, is that it doesn’t have the computer capacity to suspend time-counting for the moms and their babies.

I personally believe that the TANF time limits merit rethinking altogether. DHS itself is looking into a policy that would convert the one-time hardship exemptions for at least some of the designated families and perhaps others into hardship extensions, as federal law has always allowed.

But that’s not even on the drawing board yet. The proposed reprieve is on the Council’s must-decide agenda.

A rollback of the benefits cuts should be too, given what we know about job training waiting lists — and the many months families had to wait for the assessments used to decide what training and/or other services they should get to give them a reasonable chance of success in the workplace.

Beyond these obviously urgent issues, the Council should, I think, take a hard look at how DHS spends its TANF dollars. In 2013, the department spent nearly as much on “non-assistance” as on work activities. What’s in this catch-all category is a mystery. Not the department’s fault, but rather a flaw in the U.S. Department of Health and Human Services’ reporting format.

The new DHS director, unlike her predecessor, shared a break-out of TANF spending with parties interested enough to have attended a recent briefing. Some money here, some there, some someplace else.

I doubt the Council has ever delved into the dispersal of TANF funds. Every dollar may support something worthwhile. But the mechanism is hardly responsible — let alone transparent — budgeting.

And it inevitably diverts funds from cash support for very poor families and from work-related services that can help the parents get to the point where they can pay for their families needs.

These, I think most of us view as core purposes of the TANF program. And both the CBPP report and everything else we know suggests they’re being shorted.

* The TANF funds spent include the District’s federal block grant share and what it claimed as its maintenance of effort, i.e., what it spent of its own funds, plus funds that some nonprofits spent on at least on of the program’s four major goals.

UPDATE: Shortly after I finished this post, I learned of a petition the Fair Budget Coalition has created to drum up Council support for the proposed reprieve. Some on the Council, I’m told, are in need of persuasion. So I hope those of you who are District residents will sign. You’ll find the petition here.


Another Take on the Proposed DC Sales Tax Increase

April 16, 2015

The DC Fiscal Policy Institute makes a case for the proposed increase in the District of Columbia’s sales tax. It’s persuasive. And the more I’ve thought about it, the more I’m persuaded that the increase will serve the interests of some of the District’s poorest residents better than a campaign to replace it.

So, in a semi-retraction of my earlier post, here’s what DCFPI says, fleshed out for those who haven’t been immersed in the issues and punctuated with remarks of my own.

The increase is very small. It would add a quarter of a penny per dollar to the purchase price of anything subject to the sales tax. DCFPI has figured that poor families would probably have to pay at most $25 more a year.

The District needs additional revenues for homeless services. The Mayor has said that the additional tax revenues would fund the first steps in making reforms laid out in the new strategic plan adopted by the Interagency Council on Homelessness.

Her budget would, among other things, provide more permanent supportive housing for chronically homeless individuals and families with a chronically homeless adult member.

It would convert a pilot rapid re-housing program for individuals into a regular program and expand it so that more of them who don’t need PSH could move from shelter into housing they’ll be able to afford — at least, till their short-term subsidy expires.

It would create some new, specially-targeted housing vouchers for individuals and families who no longer need the intensive services PSH provides, but can’t afford market-rate rents. Individuals and families who come to the end of their term in rapid re-housing, but still can’t afford those rents would also be eligible for the vouchers.

The budget would also dedicate funds to begin the process of closing the over-large, decrepit DC General family shelter. About $4.9 million would pay rent to landlords who’ve offered up units — thus moving 84 families into more habitable living quarters swiftly.

All worthwhile investments, I think you’ll agree.

Other recent changes in the District’s tax code would more than offset the increased sales tax burden on lower-income residents. The DC Council enacted a higher standard deduction for income taxes last year. It expanded the Earned Income Tax Credit for childless adults, enabling them to get the same credit as from the federal EITC.

And it raised the income threshold for Schedule H property tax relief, which benefits renters, as well as homeowners. Elderly residents get a higher tax credit too.

Now, of course, residents with no earned income and not enough income from any other source to owe income taxes or pay rent won’t benefit from these changes. But “a large share of lower-income households” would come out ahead, even with the sales tax increase, according to DCFPI.

The Tax Revision Commission recommended the increase. Now, the Commission need hardly be the last word on the District’s tax policies. In fact, at least one of its recommendations made me cringe — a five-fold, plus increase in the dollar value of estates exempt from our local estate tax. (DCFPI didn’t like this either.)

At the same time, the Commission’s recommendations have credibility where it counts. The income tax and EITC changes I mentioned above originated with the Commission. So from a political perspective, the sales tax increase stands a better chance in the Council than some more progressive revenue raisers coming out of left field (pun intended). And we already have some evidence that any increase is likely to encounter headwinds.

The increase would make the sales tax rate the same as Maryland’s and Virginia’s. The point, I think, is not that the District should model its tax policies on its neighbors’. It’s rather that the new sales tax rate wouldn’t be higher than theirs — and thus tend to shift retail purchases across the borders.

Perhaps DCFPI is also giving preemptive reassurance to Councilmembers who’ve used Maryland and/or Virginia tax rates as arguments against tax increases here. Whether this strategy will work remains to be seen. It doesn’t seem to have gotten Finance and Revenue Committee Chairman Jack Evans on board. Nor will it, I suspect. But he’s only one Councilmember out of what will soon be twelve.

Bottom line: I doubt the Council will adopt an alternative, more progressive revenue raiser to support reforms in our homeless services system. And I’m quite sure it won’t shift nearly $19 million from other programs to support them while leaving revenues alone.

If we want those homeless service reforms, then we’ve seemingly got to settle for a less than ideal way of getting money for them. And this won’t be the end of the story anyway because the sales tax revenues won’t cover the costs of putting all those needed reforms in place.

 


Should DC Raise Its Sales Tax to Help End Homelessness?

April 6, 2015

As you may have read, Mayor Bowser has proposed a quarter of a percent increase in the District of Columbia’s sales tax to raise revenues for homeless services. The new rate would be 6%, as it was from mid-2009 until October 2013.

The bump-up would raise an estimated $22.2 million in the upcoming fiscal year and slightly more in each of the three out-years the budget must project. About $18.7 million would move the District toward the goal of ending homelessness.

One of those quick, easy Washington Post online articles asks whether Bowser should be increasing the sales tax — quick and easy because it consists mainly of imported tweets. But it poses a good question. And we’re bound to hear more answers than we already have.

Here’s how I see the issue at this point.

For the Sales Tax Increase

The best argument in favor of the increase is that the District needs more money to reduce homelessness — let alone to make it “brief, rare, and non-recurring,” as the new strategic plan intends.

The DC Fiscal Policy Institute gives us an itemized account of $12.7 million in spending on plan priorities that the sales tax increase would apparently cover.* The remainder of the $18.7 million would give about 6,000 families a yearlong reprieve from the impending cut-off of their Temporary Assistance for Needy Families benefits.

Many are homeless already. But the reprieve is still a fair, sensible preventive measure if ever there was one. It would be even more effective (and fairer) if the budget rolled back at least some portion of the earlier benefits cuts that have left the families with a pittance.

Against the Sales Tax Increase

DC Council Chairman Phil Mendelson was quick off the dime. “When revenues are growing by 3 percent,” he told reporters, “you don’t need to be raising taxes.” This, however, assumes that projected revenuessans tax increases, will be enough to pay for all critical needs.

Tackling the large, complex homelessness problem is, of course, only one of them. Perhaps Councilmembers can carve out sufficient funding from other programs, but neither he nor anyone else knows that now. And it’s not what he’s saying.

What he also says, however, raises what’s probably the most significant objection to the sales tax increase — and to sales taxes generally. They’re regressive, i.e., take larger shares of income from lower-income people than from those who are wealthier.

The District’s sales tax isn’t as regressive as some. I recall my shock when I moved from Berkeley, California to St. Louis and discovered that I had to pay tax on food I bought at the grocery store and on over-the-counter medicines.

The proposed increase would nevertheless require anyone who shops in the District to pay somewhat more for items that are also basic necessities — toilet paper, soap, light bulbs, shoes, etc. Most shoppers who’d take the hit are District residents.

DCFPI’s Executive Director, Ed Lazere, puts the best face on this he can, telling a Washington Times reporter that the effect on families is likely to be modest — a point the Institute’s budget brief repeats.

But, he adds, “All things being equal in a city that is marked by increasing income inequality, it probably would have been reasonable to raise revenues by asking those with the highest incomes to pay a little bit more.”

Alternative Revenue Raisers

Now, I don’t have anything like the expertise to say how the District could raise at least as much revenue as the proposed sales tax increase in a more progressive way. But I can draw on concepts experts have floated.

You who follow this blog know I’m about to get on my hobby horse and cite services that are still exempt from the sales tax. All but six in the long list DCFPI compiled in 2010 still are. And the vast majority of them can hardly be viewed as basic necessities.

Our property taxes are also worth a look. We have some extraordinarily pricey homes here in the District that are taxed at the same relatively low rate as small, unrenovated homes in our as-yet ungentrified neighborhoods.

And the tax collected doesn’t capture their actual increasing value because residential property tax increases are capped. Owners who live in those homes most of the year also benefit from reduced assessments.

I understand the need to craft a property tax increase carefully so as to protect low-income owners who bought their homes many years ago, before housing prices soared. But I think it could be done.

What surely could be done is to repeal the recent property tax break for seniors with incomes far from low. This beneficiary would willingly forfeit it to help fellow residents with no homes whatever.

There are probably other — and perhaps better — alternatives. But whatever the DC Council may consider will raise outcries from some interested parties. That’s just how revenue policymaking works. As former Senator Russell Long quipped many years ago, “[D]on’t tax you, don’t tax me, tax that fellow behind the tree.”

In the immediate case, I hope that fellow behind the tree won’t be a mother who already can’t afford to buy enough diapers.

That said, it may be wrong to frame this issue as an either-or choice. DCFPI cites several priorities that could require more revenues than the sales tax hike would raise. Two speak directly to homelessness — the rollback of the TANF benefits cuts and additional locally-funded housing vouchers.

More generally, I suspect that dedicated sales tax revenues will fall far short of the funds needed to end long-term homelessness in the District within five years — even if budgets continue to ensure $100 million a year for the Housing Production Trust Fund.

I note that the Mayor’s State of the District address pushes the target year forward to 2025. Doubt this is just a slip by her speechwriter.

* As DCFPI notes, the Mayor’s budget includes $40 million to construct some smaller shelters — a step toward replacing the DC General family shelter. The money would be borrowed, however, not drawn from sales tax revenues.

 

 


Two Thumbs Up for New Plan to End Homelessness in DC

March 30, 2015

The District’s Interagency Council on Homelessness recently released its draft strategic plan for the next five years. This isn’t just another of those plans that officially-established entities produce, when required. It’s truly impressive — and in a number of ways.

The plan has many pieces. And the pieces have pieces. I may have more to say about some of them. For now, I’ll confine myself to a few general observations.

Ambitious Goals, Realistically Defined

The plan establishes three major goals — one for homeless veterans, one for chronically homeless individuals and families and a third for everyone else who is or will become homeless. They differ by deadline, but the basic goal itself is the same — an end to homelessness.

This doesn’t mean, as the plan makes clear, that no District resident will ever again experience “a housing crisis,” i.e., the crisis of not having housing. The plan instead envisions an end to long-term homelessness. By 2020, it says, “homelessness in the District of Columbia will be rare, brief, and non-recurring.”

Whether the District can get there in only five years is far from certain. Much hinges, as the plan also makes clear, on the availability of more housing that’s affordable for the lowest-income residents and the success of efforts to increase their income.

This, as it says, is especially important for households that have the time-limited subsidies provided by rapid re-housing, but it’s critical for all — both for their own well-being and for the funds it would free up to meet the needs of others.

Enlightened View of Homeless People

Actually, this headline runs afoul of what seems to me an important change in thinking, both within the administration and among some service providers. “There are no ‘homeless people,'” the plan says, “but rather people who have lost their homes.”

They “deserve to be treated with dignity and respect,” which we know isn’t always the way they feel they’re treated now. Nor the way they’ve been viewed by past administration spokespersons, who’ve contended that families seeking shelter just want to live in a hotel room, for free.

The redefinition of homeless people has further implications. One is that they’re all ready for housing immediately, rather than only after they’ve successfully completed programs designed to fix them, e.g., by enabling them to kick drug and/or alcohol addictions.

In short, the plan unequivocally embraces the Housing First model — and quite clearly, in several places, addresses the fact that funding, through the Housing Production Trust Fund and other sources, has supported projects inconsistent with the model.

More generally, the plan stresses economic, rather than behavioral causes of homelessness. It doesn’t by any means ignore needs for services, including those that address behavioral health problems.

But key factors it identifies — and recurs to in its strategies — are the egregious shortage of affordable housing, wages that won’t cover housing costs and public benefits that are even more inadequate.

Anyone who thinks this is just common sense should look at some of the mainstream conservative explanations of poverty — this recent piece by New York Times columnist David Brooks, for example.

Another implication of the drafters’ view of homeless people is that programming must meet their needs, rather than expecting them to adapt to what currently exists. This is one of many indications that the drafters envision a system that will continue to evolve.

It’s why they call the plan a roadmap, rather than a blueprint. They set goals. They outline “pathways” from homelessness to housing. They use these, together with data on differing homeless groups to estimate “inventory” needs over time, e.g., the number of permanent supportive housing units required, the number of rapid re-housing subsidies.

But they also stress ongoing data collection and assessments “to understand what is working and where changes are needed.”

A Collaborative Venture

The District government alone can’t end homelessness, as the plan rightly says. Service providers have to make sure their programs mesh with the revamped — and evolving — system. Donors have to align their support with the system and help fill gaps. Developers, landlords and employers obviously all have roles. Churches and other community groups likewise.

To all these, I’d add advocates, of course, and those who belong the the community just by virtue of living in D.C. We who can must be willing to pay higher taxes. The envisioned end to homelessness should save money in the long run, but achieving it won’t be cheap.

And we’ve got to willingly accept homeless shelters in our own neighborhoods, since the plan includes contracting for and actually constructing smaller, scattered shelters to replace not only the DC General family shelter, but several over-large and decrepit shelters for individuals.

We see collaboration in the plan itself. To some extent, it could hardly be otherwise, since ICH members include not only government agency heads, but representatives from service provider and advocacy organizations and homeless or formerly homeless people.

This at least partly accounts for some innovations tucked into the plan, but the public “conversation” sessions the ICH conducted may have played a role too.

The style and format of the plan invite further collaboration. The pathways, inventories and the like reflect a lot of serious number-crunching. And the plan has a lot of numbers in it. But it’s a remarkably readable document — and remarkably transparent about the data sources, the assumptions, the known unknowns, the magnitude of the challenges and the tentativeness of the specifics.

So we everyday interested residents can understand what’s really a very complex system overhaul — and over time, participate. In short, a lot to like, even at this draft stage.

 


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