The DC Council approved a much more progressive FY 2012 budget on May 25 than expected, as they took action to restore more than $40 million in homeless services and affordable housing program cuts that support the continuum of housing – from homeless shelter through homeownership. Here are the housing programs that were funded:
From Current Revenues:
- $17.0 million – Homeless Services
From Anticipated Future Revenues [see priority schedule below]
- $1.6 million – Housing First, removing provision in Budget Support Act that would require transfer of 175 families from Housing First into LRSP project/sponsor based housing does not apply.
- $18.0 million – Housing Production Trust Fund
- $1.2 million – Department of Mental Health housing vouchers
- $2.5 million – Homeless Services
Many of us were in shock back in April when we began to realize the impact of Mayor Gray’s proposed FY 2012 budget. There were about $40 million in cuts to housing programs including homeless services and the Housing Production Trust Fund. The homeless services shortfall was restored, and if the Budget Support Act is reaffirmed upon second reading and future revenue expectations hold up, the remainder of the cuts will be restored. Our advocacy has succeeded far beyond all expectations. If revenue estimates increase as expected later this year, there is a strong likelihood the entire $18 million transfer from the Fund to the Housing Authority’s Local Rent Supplement Program proposed by the mayor will be reversed. While restoring full funding to the Trust Fund, this will at the same time re-establish a locally funded line item in the budget for the Rent Supplement Program. On the tax front the Council dropped the high earner income tax and live entertainment tax, substituted a measure removing the exemption for paying taxes on out of state municipal bonds and imposed a new sales tax on armored car and private investigator services.
In addition, the Council adopted Michael Brown’s BSA amendment that requires updating of the Comprehensive Housing Strategy including a requirement that the updated strategy be submitted to the DC Council for approval. This gives us a wonderful opportunity to promote the continuum of housing as a framework for a new housing strategy.
All in all a fantastic day! But be warned: there will be a second vote on the Budget Support Act on June 14. That vote will determine whether items prioritized for future funding will remain as approved by the Council on May 25. Those priorities in the order they will be funded from future revenue are:
- $21.0 million to fund transfer of staff from capital to operating budget
- 50% of any additional revenue goes to fund balance to increase reserves
- $10.8 million for police
- $1.6 million for Housing First
- $12.0 million for Housing Production Trust Fund
- $5.5 million for DMH (including $1.2 million for housing vouchers)
- $6.0 million for HPTF; $2.5 million for homeless services (also $3.9 million for IDA and children’s mental health services)
It is likely that there will be a strong effort from opponents of removing the exemption for taxes on out of state municipal bonds (which would generate $13.4 million in FY 2012) to rescind that tax using anticipated future revenue to replace it. This tax makes absolute sense – most other states tax interest earned from out of state municipal bonds while exempting residents from tax on their own state’s bonds. In addition, rescission of this tax could upend the above priority list for future funding. So stay tuned. We’ve come this far and we’re not going back!