More Light And A Lot More Heat On DC Summer Youth Employment Program

August 5, 2010

Monday’s hearing on the District’s troublesome Summer Youth Employment Program lasted more than eight hours. Many witnesses — most of them SYEP participants who, I gather, had been rounded up and possibly coached. Also invited government witnesses and some top-flight advocates for homeless and other poor D.C. residents.

Many pleas for the requested seven-day extension — a chance to earn more, learn more and have something to do besides hang out on the streets and get into trouble.

Cogent opposition from the Brookings Institution’s Martha Ross and the advocates, whose principal concern was the diversion of funds from homeless services, cash assistance and better job training for TANF participants and a swifter, more accurate case management system.

A blast from the DC auditor on the administration’s chronic practice of ignoring SYEP budget constraints. “Irresponsible … a threat to other vital District programs and the District’s fiscal stability.” Violations of the federal and District anti-deficiency laws, which, among other things, prohibit agencies from authorizing spending in excess of approved budgets.

An account of the run-up to this year’s raid on the TANF Emergency Contingency Fund from the Associate Chief Financial Officer. A raking over the coals for keeping the Council in the dark.

A strong defense of the SYEP from Joe Walsh, Director of Employment Services. The largest program in two decades. The largest in the country, in fact. Most participants from the three wards with the highest unemployment rates. About 30% of them from families who receive public assistance. The usual enumeration of benefits to participants. Diverse administrative improvements.

Considerable distress and frustration on the part of Councilmembers, who rightly felt jammed by the last-minute extension request and, more importantly, the administration’s utter disregard for the budget process.

Seems they thought the $22.7 million appropriated for the SYEP was what the administration was supposed to spend, not a minimum that could be freely augmented from other accounts without so much as a heads-up to the oversight committee.

Seems that Councilmember Tommy Wells, Chairman of the Human Services Committee, believed that the Department of Human Services would spend the TANF Emergency Contingency funds according to the allocations submitted during this year’s budget deliberations. Blindsided by the department’s transfer of $8.4 million to DOES.

But there really wasn’t much the committee could do — or the full Council either. Back in May, DOES had met with CFO staff about the costs of a program enrolling 21,000 participants for seven and a half weeks, rather than the authorized six. CFO staff told DOES it had funds for at most four weeks of wages. DOES then identified the TANF funds as the way to close the gap.

It assured CFO staff that the Emergency Contingency funds could be used because 80% of participants had addresses indicating they were eligible for TANF. Apparently no one in the CFO’s office questioned this dubious methodology.

So now SYEP participants are owed about two weeks of wages that can only be paid by tapping a source outside the approved budget. And since the Council found out about this only days ago, it hardly had time to go back through the budget and find another way to cover the overrun.

But it did what it could. It soundly defeated the proposed extension. This reportedly leaves $4.3 million in TANF funds that ought to go back to DHS.

It also leaves some big issues on the table. Where will DHS find the additional funds to provide shelter or other housing for the District’s many homeless families? Will it use any of the funds passed back to provide emergency relief to the families who’ve got no place to stay? What will happen with its TANF job training and other initiatives?

And what can the Council do to ensure that whoever directs the SYEP doesn’t again commit to a larger, longer program than the budget can cover?

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Fenty Raids TANF Funds To Shore Up Summer Youth Jobs Budget

August 1, 2010

Once again, the District’s Summer Youth Employment Program faces a budget shortfall. And, once again, Mayor Fenty has decided that the program shouldn’t have to adhere to the funding level set by the DC Council.

Two years ago, the administration spent about $40.5 million more than was originally budgeted. Last year, another cost overrun. And here we go again, but with a new twist.

The approved budget for this summer’s program is $22.7 million. The Council limited enrollment to 21,000 youth and capped the length at six weeks. The Department of Employment Services, which administers the program, has reportedly kept enrollment below the cap.

But, as the Washington Post reports, the Chief Financial Officer determined that the approved funding wouldn’t cover six full weeks of wages — perhaps because $10 million had to be spent on contractors to place as many youth as the Council was willing to allow. Not only that, but as DOES Director Joe Walsh testified last month, the administration wanted to extend the program to somewhat more than seven weeks.

So it was clearly in a bind. DOES could, of course, have cut back enrollment to eliminate the projected shortfall. It could have reduced participants’ work hours. The mayor could have gone back to the Council with a request for the additional funds needed to run the program he wanted.

Instead, he decided to reprogram $8.4 million that Clarence Carter, head of the Department of Human Services, had assured the Council would be used to bring total funding for homeless services up to the Fiscal Year 2009 level. Either that or the mayor is taking funds that are urgently needed to serve the very low-income families in the District’s TANF program.

At this point, we don’t know, though we may find out at a hearing the Housing and Workforce Development Committee has scheduled for tomorrow morning. But the mayor may think he doesn’t need to account for the supplement to the SYEP appropriation because, technically, the additional funds aren’t in the District’s budget.

They come from the District’s share of the TANF Emergency Contingency Fund — a pot of money Congress appropriated as part of the economic recovery act to help states cope with recession-related spending increases for TANF and/or short-term benefits to help families who would otherwise enroll in TANF.

The District had claimed $46 million. These funds weren’t in the proposed Fiscal Year 2011 budget because the U.S. Department of Health and Human Services hadn’t approved payment. Carter told the Council he was quite sure it would. And he was obviously right.

But because the funds weren’t in the budget, the mayor apparently feels free to use them for any of the broad purposes the Emergency Contingency Fund can cover, prior commitments and pressing needs notwithstanding.

An internal document prepared in April shows that DHS planned to use $8.1 million of the Emergency Contingency funds to make up the Fiscal Year 2010 homeless services shortfall and $15 million for the projected shortfall in Fiscal Year 2011. The remainder was to go to the TANF program itself — $7.9 million for cash assistance and the rest for improved job training and other initiatives.

The mayor claims that what he’s doing is altogether appropriate. “The Obama administration,” he says, “has made it a priority to use federal stimulus funds to put young people to work this summer.”

Perhaps he’s referring to the $1.2 billion that were in the economic recovery act for youth employment and training programs. Perhaps to the additional $1 billion that’s still pending in Congress.

What’s sure as can be is that neither the President nor any of his people ever suggested leaving homeless families out on the streets so that some kids can have summer-long subsidized jobs that could have gone to poor jobless parents.

UPDATE: At yesterday’s hearing, DOES Director Joe Walsh clarified the mayor’s reference to the Obama administration’s priority on subsidized summer jobs for youth. Several months ago, he said, the U.S. Departments of Labor and Health and Human Services sent a letter to state agencies encouraging them to address the high rate of youth unemployment.

They were encouraged to explore all funds available and provided guidance on how TANF funds could be used. The departments asked as many as possible to take advantage of potentials for partnering their Work Investment Act and TANF programs.

According to this account, the departments said nothing to suggest that summer jobs for youth should have a higher priority than providing shelter and other essential services for very low-income families, including meaningful job training for the parents.


Housing Crisis Voucher On the Horizon

September 25, 2009

The Center on Budget and Policy Priorities reports that tens of thousands of low-income households stand to lose their housing vouchers, pay higher rent or remain on the growing waiting lists for rental assistance unless Congress acts PDQ.

An estimated 400 local housing authorities face shortfalls in their housing voucher budgets. Every state has at least one agency in trouble. In 15 states, it’s 10 or more. CBPP estimates they’ll need a total of $130 million to get through the rest of the year without making further cutbacks.

The shortfalls are caused in part by the fact that Congress didn’t complete work on appropriations for the U.S. Department of Housing and Urban Development until March. Housing agencies, therefore, didn’t learn what their 2009 funding would be until May–five months into the program year. This left them little time to adjust their budgets in ways that would minimize impacts on low-income families who had–or expected to get–housing vouchers.

And they certainly did have to adjust their budgets because the funding Congress provided to renew vouchers was considerably less than what the agencies would have been eligible to receive, based on the funding formula Congress used for the 2008 HUD budget.

The recession is another big factor in the crisis. Families with vouchers generally have to pay 30% of their income for rent. The housing agency pays the rest. As tenants have lost their jobs or had their hours cut back, their 30% has become a smaller part of the rent costs. This, of course, means the agencies have to pay more.

Unless they do something about it. Under certain circumstances, agencies can reduce the portion they pay. This leaves voucher holders with higher–sometimes very considerably higher–rental costs. According to CBPP, at least a few agencies have already exercised this option.

Agencies can also stop issuing new vouchers and/or terminate existing vouchers, leaving families responsible for the totality of their rent. Some agencies have already done both. CBPP warns that many more will have to do so unless Congress authorizes HUD to use already-approved renewal funding to help them cope with their shortfalls.

According to CBPP estimates, more than 28,200 vouchers in use are currently unfunded due to the shortfalls. That’s a lot of families who could be left homeless or with rental costs they can meet only by cutting back on food, medications and other essential needs.

In the likely event that Congress doesn’t pass a Fiscal Year 2010 budget for HUD by October 1, it could put the needed authorization into the continuing resolution. Just a sentence or two is all it would take to avert the impending crisis.


DC Government Faces New Budget Gap

June 23, 2009

As reported, the Chief Financial Officer for the District of Columbia has issued a revised revenue forecast. The news is not good. He now estimates a further $190 million drop in revenues for this fiscal year and a Fiscal Year 2010 shortfall that’s $150.2 million greater than the one used to develop the budget.

The Mayor can tap the “rainy day fund” to cover the current deficit. But that leaves the FY 2010 deficit, plus the need to replenish the “rainy day fund.” So the Mayor and the City Council have to go back to the drawing board because the District must, by law, operate with a balanced budget.

Programs that serve low-income people are highly vulnerable in situations like this. Last November, for example, the Council closed a projected budget gap with cuts that hit these programs hardest. Councilmember Jack Evans, who chairs the Finance and Revenue Committee, now talks of having to look for funds in the education and human services areas.

For FY 2010, the Mayor and the Council closed the then-projected budget gap with a mix of program cuts and revenue raisers. Perhaps they can find some further savings that won’t undermine critical services. But I think it’s time they revisit the revenue side of the ledger.

They’ve already frozen the cost-of-living adjustment for the homestead property deduction. More of the same will only work further hardship on low-income residents. Councilmember Jim Graham has proposed an alternative that would shift more of the tax burden to the wealthiest residents–a new top income tax rate for filers with taxable incomes above $500,000.

As I wrote awhile ago, the proposal was all but DOA in April. But that was then and this is now. And the DC Fiscal Policy Institute’s arguments in favor still make good sense.

States across the country are grappling with similar–and, in some cases, much larger–revenue shortfalls. The Center on Budget and Policy Priorities reports that at least 23 have enacted tax increases. Several have adopted new top tax rates and/or other changes focused on high-income filers, e.g., a reduction in the capital gains exemption. At least three others are considering similar measures.

As CBPP says, many prominent economists have concluded that raising taxes during a recession–particularly those that affect only high-income families–is generally better for a state’s economy and its citizens than deep budget cuts.

Evans thinks otherwise. “Tax increases,” he says, “only delay the inevitable.” But why? Can’t a sustainable revenue raiser avert needs to cut funding not only now, but later?

Let’s hope that the Mayor and other Councilmembers look carefully at all their options. Because there’s no need to balance this budget on the backs of the poor.


How to Balance the DC Budget

March 7, 2009

Like state and local governments across the country, the District of Columbia is confronting a large budget gap for FY 2010. The Chief Financial Officer now says that revenues will fall $800 million short of earlier projections. Even if the city uses what will remain in federal stimulus funding, it will still have an estimated $425 million gap to close.

When a shortfall in the current budget was first projected, the City Council addressed it solely by reducing expenditures. Nearly 50% of the reductions were cutbacks in programs that serve the District’s homeless and other low-income residents.

These essential safety net programs are highly vulnerable to further cutbacks. They will be especially so if the Mayor and City Council choose to balance the FY 2010 budget by cutbacks alone. They have another option–a prudent mix of cutbacks and revenue expansions.

This is what the Coalition for Community Investment recommended in its principles for collaborative budget decision-making.

Now CCI has followed up by offering D.C. policymakers a range of savings and revenue-raising options that would not overly burden hard-pressed residents, businesses or the local economy.

They include:

  • Actions that will generate savings or additional revenues without any changes in tax rates or fees
  • Changes in tax legislation that would not increase rates
  • Expanding the base of existing taxes to capture additional revenue from high-income residents and out-of-town visitors
  • Increasing select fees that are disproportionately low compared to those in neighboring jurisdictions
  • Raising taxes on cigarettes, commercial parking and/or alcohol sold for off-premises consumption
  • Establishing a new top income tax rate for high-income families–here again aligning District revenue raisers more closely with those in nearby communities

CCI has given the Mayor and City Council thoughtful, expert advice on how to balance the budget while preserving critical investments in programs that expand local economic opportunity and support D.C. families–including those whose hardships are greatest.

What’s needed now is grassroots support to make sure the decision-makers listen. CCI has a suggested message on its website, along with the Mayor’s e-mail address. Contact information for City Council members is in the Council’s online directory.


Broad-Based Coalition Calls for Collaborative Budget-Making

December 18, 2008

A large, diverse coalition of organizations has issued a set of principles for decision-making on the D.C. budget. Both the coalition itself and the action it has taken reflect widespread concern about potential budget cuts that could retard local economic recovery and increase hardships for low-income D.C. families.

The 100+ organizations came together, as the Coalition for Community Investment, in response to recent budget cuts in “safety net” programs like affordable housing, homeless services, health care and TANF. Such cuts, it says, can be “pennywise and pound foolish” because they reduce residents’ buying power, expand cases of acute hardship and increase needs for more costly emergency services.

The coalition calls instead for prudent public investments that will expand economic opportunity and support the well-being of families. It suggests these can be made, even in these tough times. The key is an open, inclusive decision-making process that allows interested community members to contribute their practical know-how, technical expertise and experience.

The statement of principles is a very constructive first step to what could be a whole new day in D.C. budget-making. Let’s hope the Mayor and the City Council act on the guidance it provides.