The FY06 appropriations lagged well past the beginning of the new fiscal year (October 1). The Transportation, Treasury and Housing and Urban Development bill become law on November 30. The overall bill provides some $500 million less than budgeted for FY 2005. Moreover, as Congress left Washington for the New Year, it made a 1% across the board cut in all discretionary programs. Below is how some programs faired, compared to 05 funding, in the final 06 appropriation bill with the 1% across the board cut.
Here are Some of HUD's Programs and How They are Affected
The Housing Choice Voucher program received a modest increase ($15.4 billion from $14.7 billion) to restore the reduction in services mandated in 2005 and to fund anticipated increases in the cost of providing rental vouchers. As the overall HUD budget shrinks, vouchers which support 2 million families with housing assistance consume a greater share of the diminishing dollars.
On the other hand, Congress made changes to the structure of the program by establishing a new formula for funding vouchers. Under this new funding policy, each agencys funding in 2006 is tied to its funding level for 2005, which in turn was based on the agencys voucher costs during a three-month period in 2004 adjusted for inflation. This means that for the first time in the programs history, voucher funding is no longer linked to an agencys most recent actual costs. Since some agencies see larger cost changes over time than others (depending on the local housing market and other factors), severing the link between an agencys funding level and its most recent actual costs makes it likely that voucher funds will not be distributed efficiently.
Because the policy relies on out-of-date information about agencies actual costs, its effect would be to underfund some agencies and overfund others. If agencies receive less than the amount they need to maintain the vouchers currently in use, vouchers would be at risk of being lost. At the same time, if other agencies are overfunded and by law not allowed to use excess funds to create additional vouchers, this money would essentially be wasted to this agency and returned to HUD.
The Public Housing Operating funds are increased from 05 (but not to the levels of 04). Once again, the FY06 budget cuts but does not eliminate the HOPE VI program as requested by the Administration. Congress continues to support the program to redesign and rebuild public housing.
The HOME program would receive a decrease from $1.9 billion to $1.8 billion, while the Housing Counseling Program retains its current funding level ($42 million). The American Dream Downpayment Assistance program was halved (from $50 million to $25 million).
The Community Development Block Grant (CDBG) was retained in HUD but at a lower amount (from $4.6 billion to $4.2 billion).
The existing Homeless Assistance programs receive an increase from FY05 (from $1.2 billion to $1.3 billion).
Other HUD Programs
Modest changes were made in a number of other programs: funding for housing for people with disabilities (Section 811, from $238 million to $237 million); Senior Housing (Section 202, from $741 million to $735 million); Housing Opportunities for People With Aids (HOPWA, from $281 million to $286 million); Lead Hazard Reduction fund (from $167 million to $150 million); and, Fair Housing would be level funded (Fair housing assistance at $26 million and Fair housing Initiatives at $20 million).
The Catholic bishops support a national housing policy that includes: preservation and production of quality housing for low income families, the elderly and other vulnerable people; as well as the participation and partnership of residents, nonprofit community groups, and churches to build and preserve affordable housing. Churches, community groups, the private sector, and state and local government must all do more to meet our common responsibility for housing. However, there is no substitute for an involved, competent, and committed federal government. (Homelessness and Housing, 1988)
Urge Members of Congress to continue the rental assistance program for the lowest income families and to provide the cities, municipalities, states, and community groups the financial wherewithal to establish and maintain the neighborhood infrastructure of low-income communities.
For More Information
Thom Shellabarger at the USCCB, 202 541 3189 or firstname.lastname@example.org
Ruth White, Catholic Charities USA 703 549 1390 X195 or rwhite@CatholicCharitiesUSA.org