Reading the Fair Budget Coalition’s New Report

March 14, 2013

The Fair Budget Coalition released its eighth annual report last week. As in the past, the Coalition recommends specific funding and other policy priorities for the District of Columbia’s next annual budget.

There are 33 recommendations in all — nearly half of them related to housing. The remainder address jobs, health, safety and revenues.

No way I can cover so many and diverse recommendations in a post. And at this point, I don’t want to pick and choose.

So let me instead share some thoughts I had as a read the report.

Growing income inequality is one of the District’s biggest challenges.

The District’s poverty rate remains considerably higher than the rate before the recession set in. And that was pretty high.

But the overall rate — 18.7% — is an inadequate measure of the challenges our policymakers face if, as Fair Budget proposes, they choose to “advance dignity and equity for all.”

For one thing, the poverty rate masks huge disparities. The poverty rate for black residents, for example, is more than four times the rate for those classified as white/non-Hispanic.

Not coincidentally, the poverty rate for the Census Bureau’s “micro area” that’s mostly Wards 7 and 8 is 34.3%, as compared to 9.6% in the area that’s mostly upper Northwest.

As I’ve written before — probably too many times — the official poverty rates are based on an outdated, over-simple measure. So they egregiously fail to reflect the hardships low-income people struggle with, especially in a high-cost city like D.C.

Consider, for example, that the median income for all the District’s black households was only $39,302 last year — about $19, 140 less than what would make a modest two-bedroom apartment affordable.

Meanwhile, the wealthiest households were doing very well indeed. In 2009, the top 5% had incomes averaging $436,900 — 25.7 times greater than the average for households in the bottom fifth.

The District has done more to address the hardships of low-income people than most jurisdictions.

We see this very clearly in the recommendations themselves.

One set, for example, calls for targeted expansions of the Local Rent Supplement Program — a housing voucher program the District established to supplement the woefully under-funded federal equivalent. Only four states have voucher programs like this.

Another recommendation asks for continuing adequate investments in the DC Healthcare Alliance — a program the District created to provide affordable health care to residents barred from Medicaid under federal rules.

For perspective on this, look at the states that won’t expand their Medicaid programs now, even though the federal government would pick up all the initial costs — and all but 10% for the long term.

Recent budgets have short-changed programs that serve low-income residents’ needs.

Like state and local governments across the country, the District had to cope with revenue losses due to the recession. And, like most, it decided to cope mainly by cutting spending rather than raising more money through tax policy changes.

So some safety net programs, e.g., homeless services, didn’t expand as they should have to meet increased recession-related needs. Others that could have helped low-income residents support themselves and their families were actually cut.

As I’ve written (and written), the District decided to start phasing out benefits for families who’d participated in the Temporary Assistance for Needy Families program for a lifetime total of more than five years — even though officials knew the program had failed them.

Also knew that even well-trained people with substantial work experience were having a hard time finding employment unless they had at least a bachelor’s degree.

Meanwhile, the budget for child care subsidies was cut by a total of $30 million, making it difficult for low-income parents, especially those with infants and toddlers, to manage full-time jobs.

Funding for adult education was also cut, significantly limiting opportunities for the very large number of working-age residents who are functionally illiterate and others who aren’t, but lack a high school diploma or the equivalent.

The District now has an opportunity to rebuild and expand.

The District weathered the recession much better than many jurisdictions. And its economy has bounced back nicely.

Even the super-conservative Chief Financial Officer now projects $190 million more in revenues for the current fiscal year and nearly $178 million more for the upcoming fiscal year, when he (and everyone else) expects the District to experience greater impacts from the across-the-board cuts in federal spending.

The Mayor and the DC Council will still have to make choices. That’s what budgeting is about.

But they can, if they choose, invest more in programs that will alleviate the hardships of the have-nots and support their aspirations to share the opportunities and decent standard of living that many of us take for granted.

And I believe a large majority of the community would support this.

Those who do need to let the Mayor know ASAP. Fair Budget has an editable e-mail we can use.

Proposed DC Budget Would Gut Affordable Housing Programs

May 2, 2011

Seems that Mayor Gray has decided that the District of Columbia should get out of the affordable housing business.

Hard to see how else one can interpret the end results of the proposed cuts and related policy changes the DC Fiscal Policy Institute details in its brief on the proposed Fiscal Year 2012 affordable housing budget.

The affordable housing budget, if one can call it that, is hard to get one’s mind around — three different housing agencies, a number of programs designed for different purposes and, to some extent, different segments of the population.

And there’s housing in the homeless services and mental health budgets too.

Brief overview of the biggest issues, as I understand them.

Housing Production Trust Fund

The mayor’s proposed budget would siphon $18 million out of the Housing Production Trust Fund as a substitute for the customary separate appropriation for the Local Rent Supplement Program.

The $18 million cut wouldn’t be a one-time thing. The same amount would be transferred — though not necessarily to LRSP — every year until at least 2015.

The Trust Fund is a major source of local funding for affordable housing construction and preservation. It’s the most flexible tool we’ve got.

Developers can use Trust Fund commitments together with other public sources, including certain types of LRSP vouchers, to show private lenders that their projects are credit-worthy. The Trust Fund can also provide critical time-sensitive grants and loans that enable tenants to purchase the buildings they live in.

The Trust Fund gets a percentage of revenues from the deed transfer and recordation taxes that buyers and sellers pay when properties in the District change hands. So it’s been cash-short ever since the local housing market cooled a couple of years ago. As a result, lots of approved projects in the pipeline have stalled.

But the market’s on an upswing again. So some of these projects could move forward if the revenues earmarked for the Trust Fund were left where they belong. With the proposed transfer, the Fund would instead have $1 million less next year.

Only $8.9 million would be available for the Fund’s core purposes. It will have to use increasing amounts of its total revenues for debt service on bonds. So what’s left for core purposes will shrink over time. Only $4.8 million will remain in 2015.

Local Rent Supplement Program

The transferred funds would not sustain LRSP. Far from it.

The mayor’s proposal would phase out the tenant-based vouchers that are part of the program. These are the vouchers that recipients (all very low-income) can use to help pay market-based rents on any approved unit in the District.

The District would continue to subsidize rents for current voucher holders. But as households left the program, their vouchers would effectively disappear. So another major affordable housing tool would continuously shrink.

LRSP also provides vouchers that are attached to units in affordable housing developments. Like the tenant-based vouchers, they’re supposed to make rental housing affordable for a range of very-low income residents. And indeed, they do.

But the mayor wants to use all vacant LRSP units for the District’s permanent supportive housing program — a key part of the Department of Human Services’ homelessness strategy.

Though PSH is affordable housing, it’s only for individuals and families who’ve been homeless for a long time or recurrently due, at least in part, to severe challenges like mental illness and/or substance abuse.

So another fund shift — or the equivalent. And another case where a tool that was serving a particular purpose gets used for another.

Bottom Line

At the end of the day, the shifts would drastically curtail the District’s efforts to ensure that low-income individuals and families can afford to be part of this “one city” the major has promised.

And dollars to doughnuts, they’d put more pressures on the under-funded homeless services budget too.

What Now?

It’s up to the DC Council now to restore the funds the mayor’s budget cuts.

The Coalition for Nonprofit Housing and Economic Development and allies in its Continuum of Housing Campaign have organized a rally to urge this. We’re asked to show up at the John A. Wilson building tomorrow, May 3 at 6:00 p.m., just before the last of three back-to-back hearings on Fiscal Year 2012 budgets for D.C. Housing Agencies.

DC Emergency Rental Assistance Program Fully Funded (For Now)

April 22, 2011

My recent posting on the latest homeless count in the District noted a couple of Mayor Gray’s budget proposals that could spell a further increase in family homelessness. A $2.3 million cut for the Emergency Rental Assistance Program was among them.

But administration officials have just informed local advocates that ERAP would get $7.4 million under the mayor’s budget — about the same as its original appropriation for the current fiscal year.

Deborah Carroll, the Interim Director of the Department of Human Services, confirmed this during her presentation at a budget briefing the DC Fiscal Policy Institute hosted yesterday.

The ERAP figure I cited was based in part on the Fiscal Year 2012 funding figure in the mayor’s budget presentation to the DC Council and in part on an unannounced reduction made last December as part of the latest gap-closing plan.

So either the mayor’s presentation was in error or someone in the administration has had a change of heart. Hard for an interested outsider to know because there’s no separate line item for ERAP in the budget.

For the same reason, we’ve got to take the full-funding assurance on faith. The budget structure would allow DHS to shift ERAP funds at its discretion — orĀ  just deep-six them to close some future budget gap.

But the assurance is still good news because short-term help with the rent can keep some people from becoming homeless.

And DHS certainly can’t cope with more homeless people, given the large funding loss its homeless services program faces. Probably not even with all the homeless individuals and families it’s serving now.

My Blog Turns Two

December 6, 2010

Today is my blog’s second birthday. An occasion for me to thank all of you who’ve been reading what I write. Special thanks to the many of you who’ve contributed — through your comments, your analyses and your generous responses to my many questions.

In some ways, it’s also an occasion for me to celebrate. When I started this blog, I was plunging into the unknown. Had no idea whether I could sustain it, no clear plan beyond the next posting and no knowledge whatever about some of the issues I’ve addressed.

And now I’m writing my 250th posting, with some sense of presence, purpose and place in the interlocking advocacy communities I so admire.

In another way, it’s not an occasion to celebrate. My first posting was about how the DC Council had rebalanced the Fiscal Year 2009 budget with spending cuts that disproportionately affected low-income residents.

And here we are two years later with the Council considering a plan that would achieve nearly 40% of its savings by cuts in programs that serve them.

That first posting focused on a couple of issues — affordable housing and cash benefits for participants in the District’s Temporary Assistance for Needy Families program. The cuts on the table now would be worse.

The Local Rent Supplement Program would lose $3 million. Once again, a small approved increase would be rescinded. No new housing vouchers for any of the 26,000 households on the waiting list. No additional support for new affordable housing development.

Funds in reserve would also be cut. So some who have vouchers might lose them as housing costs rise and/or the incomes of beneficiaries drop.

The first TANF benefits cut I wrote about rescinded a small just-approved increase. This time, maximum benefits, which have remained level ever since, would be reduced by 20% for all families who’ve participated for a total of more than five years.

Perhaps the Council will reject these proposed cuts. But it’s sad that we’re once again fighting the same battles. Sadder that victory would mean significantly less funding, in real terms, for these and other programs that serve low-income people.

Even so, there’s something to celebrate.

Local service and advocacy organizations have risen to the challenge. They’ve expanded their reach, developed new messaging and organizing capacities and perhaps most importantly advanced well beyond a “just say no” defense of the diverse programs that affect them and their clients.

The very fact that they’ve coalesced around a new top income tax bracket and gotten it into the gap-closing dialogue — both within the Council and beyond — indicates how far they’ve come in the last two years. If only we could say the same for our low-income neighbors.