Bowser Budget Scants Needs of Homeless and Others at High Risk

April 20, 2017

Picking up where I left off, some major parts of Mayor Bowser’s proposed budget don’t link as obviously to the inclusive prosperity road its title promises as, for example, adult education and available, affordable child care.

Yet two other parts we care about do because both are virtual preconditions to earning income and having enough left over after basic needs to invest in boosting one’s marketable knowledge and skills.

But I don’t want to leave impression that I equate “prosperity” with income or wealth, as I think Bowser’s budget title does because it seems an indirect way of referring to the extraordinarily high level of income inequality in the District.

The Latin root of “prosperity” means made successful, but also made happy, according to one’s hopes. One can surely make a homeless family happy by providing it with decent, stable housing it can afford without—or before — doing whatever necessary to boost its income so that it can pay full rent.

So we need to look at the following from multiple perspectives.

Affordable Housing

No one, I suppose, needs anything further said about the acute shortage of housing in the District that its lowest-income residents can afford.

Such prosperity as they might achieve — through taking college courses, for example — is beyond their means because, if they’re not homeless, most are paying more than half their income for rent and more than half of those at least 80%.

The Mayor, to her credit, would again commit $100 million to the Housing Production Trust Fund, plus $10 million to a new fund dedicated solely to preserving existing affordable housing.

But helping developers finance new affordable housing construction and/or renovations isn’t enough to produce units affordable for the lowest-income residents.

Those units need housing vouchers attached to cover the difference between what tenants must pay — no more than 30% of their income — and ongoing operating costs, e.g., maintenance, utilities, staff wages. The Mayor fails to propose funding to increase the number of these so-called project-based vouchers.

And as I earlier said, additional funding could be needed merely to sustain vouchers now in use because if Congress extends the current funding level for federal Housing Choice vouchers, the DC Housing Authority won’t have the money to issue any.

If the Republican majorities in Congress accede to anything like Trump’s budget plan, a larger loss, as yet unestimated at the state/District level.

Homelessness

Want of affordable housing obviously causes homelessness. But it does more than that. It’s hard to get and keep a job when you’re living in a shelter.

That’s especially true if the shelter’s for adults only because they generally have to get in line in mid-afternoon to get back in. And those who make it may not be able to wash themselves and are highly vulnerable to theft.

There goes the cell phone that’s the only way to contact them — and the photo ID they’ll need, if they have one.

All but impossible to get a job if they’re among the chronically homeless without the safety, stability and appropriate services they’d get in permanent supportive housing.

The Mayor does increase PSH funding by $2.7 million. But that would meet only 30% of what’s needed to end chronic homelessness, the DC Fiscal Policy Institute reports. (The target year set by the strategic plan the Mayor’s embraced obviously won’t be met,)

Other single homeless people get shorted in several different ways. No additional rapid re-housing for them, though some temporarily down on their luck could pick up the full rent when their short-term subsidies end.

About 46% for less for families as in the current fiscal year. But its success in ending homelessness — or as the program’s formally titled achieving “stabilization” — is at the very least debatable.

And the District’s youngest homeless people — those under 25 who’re on their own in the city — will continue to suffer from neglect, in addition to the egregious neglect (or abuse) that caused some to leave home to begin with.

Others became homeless when they became legally adults. Various reasons for this. For example, they were either kicked out by their parents (something that can happen earlier) or reached the maximum age for foster care and didn’t have foster parents who’d foster them for free — or any one else who’d take them in.

These young people need safe, stable housing, but also education and/or training and mentoring because, as the National Network for Youth puts it, many are in a state of “extreme disconnection.”

In other words, they’re worst cases of youth commonly referred to as “disconnected” — or more hopefully, “opportunity.” They’re not only neither in school or working. They lack basic life skills, e.g., how to keep themselves healthy, look for a job, manage such money as they make.

The DC Interagency Council on Homelessness developed a five-year plan specifically for homeless youth, based on census (no link available) that’s surely an undercount. It nevertheless captured 545 youth who were either homeless or insecurely housed, e.g. couch-surfing.

The ICH developed a five-year homeless youth plan, as an amendment to the District’s basic homeless services plan requires. The Mayor’s budget invests $2.4 million — less than half what the upcoming (and first) year requires.

Homeless now — others to become so. How then will the District make not only youth, but former youth homelessness brief, rare, brief and non-recurring  — let alone enable these potential contributors to our economy and our civic life share in the prosperity the Mayor dangles before us?


Inclusive Prosperity Programs Shortchanged in Mayor Bowser’s Budget

April 17, 2017

My last post merely mentioned shortfalls in the Mayor’s proposed budget, due at least partly to the $100 million or so she chose to forfeit by doing nothing to halt the automatically triggered tax cuts.

I’ll turn now to my picks for programs she shortchanges, based on how she styles her budget — a roadmap to inclusive prosperity.” Still only summaries. And not all programs some advocates have flagged.

Nevertheless, more than I can cover in a single post with enough substance to convey what’s under-funded — or unfunded — and why that violates the budget’s promise. So I’ll deal here with what seem the most obvious and followup with a couple of others that matter too.

Education and Training

We also all know that education and relevant job training generally move people along the road to some modicum of prosperity. For many adults in the District, the first step must be remedial education — basic literacy in reading and math, help in preparing for the GED exams.

For others, appropriate programs include those leading to a regular high school diploma and /or vocational education courses in other publicly-funded institutions, e.g., charter schools and alternative education in regular public schools like the Ballou High School’s STAY program.

Several surveys have found that adult learners miss classes because they can’t come up with the transit fare. Eighty-six percent of the youngest who had subsidized transportation said it would hard or altogether impossible to attend without it.

No reason to believe that’s not true for at least as many older adults, who’ve often got to spend more of such income as they have on basic needs for both themselves and their children. And, of course, we’ve got to assume that some of all ages drop out.

The Deputy Mayor for Education recommended an adult learner parallel to the Kids Ride program, which covers the public transit costs of getting to and from school.

Not a big ticket item—a mere $1.5–2 million. But no money in the Mayor’s budget for it.

Double-Duty Work Support

The full, unsubsidized cost of child care in the District is higher, on average, than in any state. Though low-income parents are officially eligible for subsidies that help pay for it, as a practical matter it’s difficult, if not impossible to find a center that will accept them.

This is a long-standing problem rooted in the insufficient rates the District uses to reimburse providers. For this, among other reasons, it was shy roughly 14,000 slots for infants and toddlers in 2015.

They’re the most costly to care for properly, what with diaper changing, feeding and all — hence local center charges averaging $22,658 a year.

The kids are too young for pre-K, of course. But the quality of care, e.g., nurturing relationships, talking to, has more impact on brain development than at any later stage. The very young children who get it will do better in school — and thus have a better chance of sharing in prosperity.

Now, if you can’t find trustworthy care for your child, you’re unlikely to work. Nor enroll in an education or training program that would prepare you to do so. And you won’t do either if you can’t pay for it.

Charges for licensed childcare are likely to increase, since the District recently set new licensing standards that require not only teachers, but their assistants to have at least a two-year college degree, unless they’ve got an independently-awarded Child Development Associate credential.

Those who manage to get either surely — and reasonably — will expect increases in their pay. It’s already, on average, extremely low — $26,470, on average, according to the latest figures.

If they don’t get them they can find employers that will. And that’s likely to further reduce open slots, since replacing them would be as difficult as keeping those who left.

Yet the Mayor’s budget doesn’t nothing about this. It would instead put $15.3 million into a new initiative to increase center capacity. But the new slots would be market rate — helpful for better-off parents, but no help at all for the most in need of affordable care to move down her road.

Paid Family Leave

The Mayor proposes no funding to translate the paid family leave law the Council passed into an operating program.

That requires both the creation of a new agency to administer the law, e.g., to ensure employers pay what they owe, pay out to eligible workers for the time off they take, and a new computer system to make all this possible.

We know the Mayor doesn’t like the law. But the essence of being an executive is executing laws.

Forcing more than half a million workers to wait for who knows how much longer to either keep working when they need time off for compelling  for compelling family reasons — or at least as likely forgo needed income — hardly comports with including them in prosperity.

Her refusal to propose the $20 million needed to get the program started doesn’t, I think, reflect only spending constraints imposed by her deciding not to even hit the pause button on the tax cuts. But they do perhaps provide some cover.


DC Mayor Bowser Won’t Halt Triggered Tax Cuts to Gain Needed Funding

April 13, 2017

Just finished my annual dialogue with my tax preparation software. So as always, my thoughts turn to the tax laws that determine what I have to pay. A sweeping federal tax reform is much in the news. And I’ll probably have things to say about that.

But I’ll start with the automatically triggered tax cuts Mayor Bowser has decided to let alone in her proposed budget, styled “DC Values in Action: A Roadmap to Inclusive Prosperity.”

These because they don’t hinge on new legislation. And they push down spending because the District, like most states must balance its budget every year.

As you may know, the triggered tax cuts reflect recommendations made by the Tax Revision Commission in 2014. It didn’t recommend triggering them whenever a certain revenue projection exceeded the version the budget was built on.

That was the work of DC Council Chairman Phil Mendelson, who folded them, ranked according to his preferences into the final version of the legislative package that accompanied the Fiscal Year 2015 budget.

A last minute thing. Other Councilmembers had no chance to consider them — perhaps didn’t even know they were there.

The triggered tax cuts have already reduced revenues by $102 million — none a one-time loss. The rest will all kick next fiscal year, unless the Council decides to instead recoup about $100 million.

Some of the cuts, would benefit lower and moderate-income residents, though not those with incomes so low they already don’t owe income taxes, once they’ve taken all now allowable exemptions, credits and the like. Nor, of course, those who’ve no taxable income at all.

These cuts include a further increase in the standard deduction, which a very large percent of DC filers with incomes less than $75,000 choose because they don’t have more costly specific deductions like interest on a mortgage or real property taxes high out-of-pocket medical expenses. (The District relies on the federal government’s Schedule A for these.)

The other of this sort is a multi-part increase in the personal exemption, which applies to all filers and their dependents, except apparently those whose incomes exceed $275,000.

But the surplus also triggers a second increase in the threshold for the estate tax, bringing it to $5.49 million if left by an individual and twice that for a married couple — the same as in federal law.*

Why the District should aim to mirror a tax giveaway to heirs of the very most prosperous that Congressional Republicans insisted on as part of the deal that pulled us back from the fiscal cliff is a mystery.

Additional cuts in the business franchise tax, coupled with a further cut in the business income tax are, at the very least questionable.

Sure, we want profit-making businesses in the city — a source of jobs, among other things. But a recent survey indicates that the taxes they must pay are a relatively minor factor in their decisions on whether to locate here or elsewhere.

Topping the list is the ready availability of workers with the knowledge and/or skills they need. One could do a lot to help residents qualify for and get jobs with the potential loss of $35.7 million.

Advocacy organizations of various sorts have already flagged a wide range of shortfalls in the Mayor’s proposed budget. We’ll have a fuller accounting from the DC Fiscal Policy Institute fairly soon — and undoubtedly more from other concerned nonprofits too.

I’d thought to cite examples, based on the Mayor’s prosperity promise and my own topmost concerns. But even summaries made this post far longer than my somewhat flexible maxim. So I’ll return to them shortly.

Yet I don’t want to leave the impression that the Mayor’s budget shortchanges her low-income constituents in every way.

The most significant example of how it would benefit them is the funding she proposes to begin the Temporary Assistance for Needy Families time limit reforms recommended by diverse working group the Department of Human Services convened.

This will not only save roughly 6,500 families from losing all their benefits when the new fiscal year begins — and more as time goes on.

It will preserve those benefits for all children and all parents who’re meeting their work preparation and/or job requirements until they’ve found jobs or otherwise gained enough income to put them over the eligibility cut-off.

Cash benefits being as low as they are — and will be — the initiative in and of itself hardly shares the non-inclusive prosperity reflected in the District’s tax revenues. But it does save very poor families from the most dire poverty.

And the non-cash benefits — free training and, in some cases, formal education, no-cost child care and transportation — give parents a chance to move from welfare to decent-paying work and, in the process, improve their children’s future prospects.

* The thresholds were somewhat lower when the Council adopted the triggers, but the legislation refers to raising the threshold “to conform to the federal level.” And the federal level rises with the inflation rate.

UPDATE: I’ve learned that the Mayor’s budget doesn’t altogether reflect the working group’s recommendations. They would significantly protect children if their parents had their benefits cut for not complying with their work requirements by allocating 80% of the family grant to them.

The Mayor would split the grant 50-50. As a practical matter, this might not make much difference. The parents will have the same amount to spend, and it will surely go for the same basic needs. We will need to see how the Mayor justifies her split, assuming she or a Department of Human Services official is asked.


Bowser Budget Shorts Vouchers, Leaves Huge Affordable Housing Gap

April 7, 2016

The National Low Income Housing Coalition reports that the District of Columbia has only 40 apartments affordable and available to rent for every 100 extremely low-income households and only 30 per 100 for the deeply low-income.

ELIs have incomes no greater than 30% of the area median — at most, $32,600 for a four-person family in D.C. For DLIs, the maximum is 15% of that median.

The NLIHC figures actually understate the affordable housing shortage here because the area includes well-off communities beyond the city line. Several years ago, the District’s own median was 23% lower.

Even so, clearly a yawning “housing gap” — a shortage of more than 30,600 units two years ago, when the Census Bureau conducted the survey NLIHC used.

It helps explain why nearly two-thirds of the District’s ELI households and nearly three-quarters of the DLI subset had to spend more than half their income for rent, plus utilities — commonly (and aptly) referred to as a severe housing burden.

The gap also, of course, helps explain why the District had so many homeless individuals and families — and still does, though we’ll have to wait a bit for new hard numbers.

The report confirms what everyone has known for a long time. The District sorely needs more housing that’s affordable for its lowest-income residents. And the District government must invest local tax dollars to create it — and preserve what remains.

The Mayor’s budget includes another $100 million for the Housing Production Trust Fund, which helps finance both construction and preservation, though not exclusively for ELIs and DLIs.

But developers can’t afford to build or renovate housing for them without an ongoing source of funds to help pay operating costs. That’s why the District also needs enough housing vouchers of the sort that’s attached to specific units — so-called project-based vouchers.

At the same time, it needs more tenant-based vouchers — those that make up the difference between what low-income people can afford and the market-rate rent of units landlords will lease to them.

Don’t look to the federal government to fund more vouchers. The current budget at best barely sustains those already in use. And the District hasn’t gotten anything like the number of vouchers it needs for many years.

That’s why its policymakers created the Local Rent Supplement Program — a source of vouchers modeled on the federal.

The DC Fiscal Policy Institute has raised concerns about proposed funding for LRSP in next year’s budget. There’d be only enough more to provide affordable housing for some 200 formerly homeless individuals and families, it says.

These would be tenant-based vouchers. They would replace some of the short-term vouchers individuals and families have through rapid re-housing and/or enable either or both to move from permanent supportive housing because they no longer need such intensive services.

The Mayor proposes no additional funds for the project-based type. How then could the Production Trust Fund actually produce more affordable housing for ELI residents — let alone the subcategory NLIHC has created?

The Fund, by law, is supposed to spend 40% on ELI housing every year. It hasn’t always in the past. But the head of the Housing and Economic Development Department said she’d ensure it did. And the latest awards seem to confirm that.

But developers may not respond to all the new opportunities the Fund will create if the Bowser administration can’t assure them of the ongoing subsidies project-based vouchers provide.

This isn’t the only problem with the significantly smaller LRSP increase the Mayor proposes. If all the tenant-based vouchers go to residents in rapid re-housing and/or PSH, there’ll be none for the ELIs and DLIs with housing burdens that put them at high risk of homelessness.

NPR recently profiled a single mother who’d just narrowly escaped eviction, but can’t rest easy because her monthly rent is about $335 more than what her job pays.

She knows that she should move the family to a more affordable place. but even the no-bedroom apartments she’s found rent for barely less than what she makes.

She applied for a housing voucher eight years ago. The family is now “1,000 something” on the DC Housing Authority’s waiting list, she says. There are about 40,000 families behind her. And there would be more if DCHA hadn’t closed the list three years ago.

The problem NLIHC documents is hardly unique to the District. The shortages it documents are actually larger nationwide, as are the severe housing burdens. We can, I think chalk this up partly to investments of local funds.

But that’s hardly a source of comfort to District families who can barely come up with the monthly rent and money for the electricity bill — or who can’t, but manage to stay housed, heated and the like by putting off first one and then the other.

These families are obviously one loss of working hours or other new strain on their budgets away from homelessness — or just one more late rent payment.

The District may rapidly re-house them. But few will be able to pay full rent when their short-term subsidies expire — or find an apartment they can afford. And the proposed budget would by no means fund LRSP vouchers for all that will need them to remain securely housed.

The Mayor has embraced the goal of making homelessness a rare, brief, one-time experience in the District. So it’s perplexing to see that she’s proposing a smaller real-dollar increase for LRSP than budgeted in any recent year but one.

Not much of the “fair shot” her budget promises for those residents on the waiting list and the severely housing-burdened who aren’t because they couldn’t apply.

 


DC Mayor Leaves TANF Families Dangling Near Bottom of a Cliff

March 28, 2016

Mayor Bowser said, in her State of the District address, that she would ask the DC Council to raise the local minimum wage to $15 an hour. She wants to “make sure that more families … can earn a decent wage … [s]o that when their time on TANF has ended, they can afford to stay in the District of Columbia.”

Meanwhile, a reform of some sort “will keep families working their plans from falling off a cliff.” This, I take it, refers to families headed by parents who are putting in the required number of hours on their required work preparation and/or job search activities.

The Mayor’s proposed budget quashes whatever hope her speech raised. It would, once again, just push back the benefits cut-off for families who’ve participated in TANF for 60 months or more.

Better than pushing them out of the program six months from now. But they’d still receive only the drastically lower cash aid intended to lead up to the cut-off — perhaps with a very small adjustment to compensate for inflation.

A family of three now receives $156 a month — $1.71 per person, per day. Seems to me they’re already pretty near the bottom of that cliff.

One could understand the cut-off delay if the notion of extending benefits indefinitely for some at-risk families were altogether new such that experts in the Human Services Department had to start developing a proposal from scratch.

If they had no precedents in other states to look at, instead of those in forty-four. If the notion of preserving benefits for all the 13,600 or so children who’d get only a temporary reprieve had never crossed the Mayor’s radar screen before.

If no research had found that children in extreme poverty suffer irreparable damages that put them at extremely high risk for a lifetime of poverty.

The Mayor knows, as do many of you, that the Council already has a pending bill that would qualify families for extensions if cutting off their TANF benefits would leave them penniless — or in less dire cases, short of enough wage income to cover their basic needs.

The same bill would extend a lifeline to all children, even those whose parents didn’t qualify. And it would restore the cash benefits they and reprieved parents would receive if not up against the time limit.

That’s hardly enough to live on, even with other safety net benefits, but a whole lot better than what the Mayor intends. Our family of three would have $288 more a month — and could look forward to an increase next year, if still not earning enough to boost it over the income cut-off.

Strengthening the safety net, as the bill proposes, would cost roughly $30 million during the upcoming year — $20 million more than the Mayor’s kick-the-can-down-the-road-again approach.

She chooses instead to give more than half the total to businesses through another cut in the franchise tax and to the beneficiaries of estates, which would have no tax levied until the value, after deductions exceeded $2 million.*

The Council triggered these tax cuts — and possibly others — in its latest budget-related legislation, but she could have asked it to defer them.

I have nothing like the expertise to say where else Bowser and her budget experts could have found the funds needed for the TANF extensions. But they’re surely somewhere in that $13.4 billion budget.

I realize I’m not giving the Mayor credit for a number of fine budget proposals — $13.1 million to move the plan to end homelessness forward, for example, another $100 million commitment to help finance construction and/or preservation of affordable housing, further investments in public education. And so on.

But I can’t get over her decision to leave nearly 6,600 poor families hanging by a thread when she has such a clear, justifiable alternative. And I don’t think Councilmembers should go along when they could, at least in this respect, make the budget live up to its billing as “a fair shot.”

* Current law exempts assets that pass directly to surviving spouses and/or charitable organizations. So the larger tax break wouldn’t benefit them. It would benefit other heirs if either or both received some of the assets because the taxable value doesn’t include them.

UPDATE: I’ve just seen the Chief Financial Officer’s (unpublished) cost estimate for the short-term reprieve. He puts it at $11.6 million, based on an estimated 6,200 families and no cost-of-living adjustment, as I had thought there might be.


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.

 

 

 


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.