SEATTLE—March 7, 2005—President Bush’s proposed budget for 2006, announced on February 7, includes proposals to cut a number of programs, both in housing directly and in programs that affect Seattle Housing residents and other low-income people.
Local government officials are already expressing concern about the effect that these cuts will have at the local level, and have organized a rally for Thursday, March 10.
Housing programs
For Low Income Public Housing, the budget proposes cuts of 5 percent to the operating subsidy and 10 percent to the capital subsidy. This continues a trend from the current Administration that has seen overall funding for public housing decrease by 20 percent since 2001 (including these proposed cuts). For this same period, capital subsidies decrease by 22 percent. If the nationwide cuts apply proportionately to SHA, it could mean a cut of about $1.2 million on the operating side and another $1.4 million on the capital side.
According to SHA Executive Director Tom Tierney, “We will make every effort to absorb these cuts without damaging our service to residents. I am confident that we will continue to provide the same level of housing for our tenants, but it will certainly be a challenge.”
On the Section 8 side, the proposed budget locks in the 2005 cuts. The 2005 funding leaves SHA about $6 million short of the funding needed to fund the total number of vouchers that we are assigned (7,861) at the current average cost per voucher ($787 per month).
SHA is addressing this funding shortage by not re-issuing vouchers when families leave the voucher program. In effect, this means that the Section 8 waiting list is frozen. Not only is it closed to new applicants, those already on the waiting list have no opportunity to move into housing either. SHA is currently serving about 250 fewer households than last year as a result of these 2005 cuts.
In the Section 8 program, every million dollars in cuts translates to about 100 vouchers. Over the next several months, Seattle Housing will consider ways to change the Section 8 program in order to respond to proposed cuts. Changes to current payment standards (how much subsidy is paid out for an apartment), utility allowances and other program components will be considered.
Other proposed cuts
Beyond the cuts to public housing and Section 8, there are proposed cuts to other housing, community development, and low-income service programs as well. The most impact may come from cuts to the Community Development Block Grant (CDBG) program. This $4.7 billion program is proposed to be reduced to $3.7 billion, combined with 17 other programs, and moved out of HUD to the Commerce Department. Over the past four years, the City of Seattle has spent $68.2 million from CDBG. Approximately 13 percent has supported production and preservation of multifamily rental housing; another 10 percent has supported homebuyer and home rehabilitation projects, including weatherization programs; and 18 percent has been used for emergency services for homeless people and domestic violence victims.
Other proposed cuts include reducing the Section 811 program (housing for disabled people) by 50 percent, and reducing funding for housing for people with AIDS (HOPWA) by 5 percent. SHA has developed two projects in recent years with AIDS Housing of Washington that used 811 funding.
Some of these cuts are said to be offset by additions to funding for home ownership and funding for the President’s initiatives to “end chronic homelessness.” But in total, HUD’s budget is proposed to be cut by 11 percent.
The budget process
When the White House announces the President’s proposed budget, as it did on February 7, it signals the beginning of the budgeting process for the next federal fiscal year—2006 in this case. This is the first step in a long process that will finally conclude when both houses of Congress have approved the budget. In 2004, negotiations on the 2005 budget did not conclude until after the election. Over the next several months there will be on-going discussions and negotiations, in Washington, D.C. and across the country, about every part of the budget.
Concerns expressed at local level
Concerns about budget cutbacks and the pressures these will cause at the local level are already emerging. On Monday, March 7, the Seattle City Council passed a resolution opposing the elimination of the Community Development Block Grant program as a part of the HUD budget. The resolution requests that Congress enact "a fiscal year 2006 budget and appropriations package that funds CDBG formula grants at no less than fiscal year 2005 allocation of $4.355 billion, without making further reductions in public housing, homeless programs and other housing assistance."
In addition to this resolution, the Seattle City Council is also sponsoring a rally in the lobby of the Seattle City Hall on Thursday, March 10 at 10:30 a.m. The rally precedes a trip to Washington, D.C. by several elected officials who will be attending a National League of Cities meeting.
Officials who will be present at the rally will carry petitions signed by people at the rally back to the State's Congressional delegation in D.C. for their consideration. For more information about Thursday's rally, call Councilmember Tom Rasmussen's office at 684-8808.
Seattle Housing Authority will be working with elected representatives and national housing associations, including the Council of Large Public Housing Authorities and the National Association of Housing and Redevelopment Officials, to inform the debate on these issues.