The Impact of the President’s 2008 Budget on Supportive Housing

We received this important information form Alison Recca-Ryan of the Corporation for Supportive Housing. To read this is an Adobe PDF format click here.

The Presidents FY 2008 Budget Proposal:

Its Impact on Supportive Housing and Progress Toward

the Administrations Goal of Ending Chronic

Homelessness by 2012

SUMMARY

The Administrations FY 2008 budget proposal makes another important investment in HUD McKinney-Vento programs (proposed $1.586 billion funding level; $145 million increase over FY 2007), a linchpin of supportive housing creation for the chronically homeless. However, the budget as a whole continues the Administrations multi-year attack on key housing, services and other mainstream safety net programs, including Section 8, public housing, CDBG, HUD 811/202, Community Services Block Grant, and Social Services Block Grant.

If enacted, these cuts to mainstream programs would severely compromise communities ability to prevent and end chronic homelessness, especially those jurisdictions that have taken the critical step of including ending chronic homelessness as a priority in their allocation of these resources.

ANALYSIS

The Administration’s budget offers very good news on funding for HUD homeless programs, signals an increased focus on veterans homelessness, and mostly flat funds other federal programs targeted to homeless people.

The President proposes a $145 million increase to McKinney-Vento Homeless Assistance Grants compared to FY 2007. 1‚ The President proposes to fund the McKinney-Vento account at $1.586 billion, a $145 million increase from the $1.441 billion expected to be appropriated for FY 2007. For the third consecutive year, the budget proposes that $25 million of this amount would be transferred to the Department of Labor for a faith-based Prisoner Re-entry Initiative. 2 The Presidents proposal continues to reflect the favorable evaluation the McKinney-Vento programs received from the federal Office of Management and Budget (OMB), namely, a PART rating of effective that puts the Continuum of Care in the top 15% of all federal programs. Notably, the goal of “working to end chronic homelessness and the proposed increase in McKinney-Vento funding is one of only three HUD budget highlights included in the Presidents summary of his budget proposal on the OMB website and HUD Secretary Jackson highlights in his own introduction to the HUD budget that McKinney-Vento funding has since 2001 helped create more than 50,000 units of permanent supportive housing. CSH believes this funding increase is the minimum necessary to maintain progress toward the goal of ending chronic homelessness by 2012, by helping to create approximately 10,000-12,000 new units of supportive housing and funding the rising costs of renewing current grants provided through the Shelter Plus Care and the Supportive Housing Program for permanent housing.

The Presidents budget proposal supports the 30% “permanent housing set aside within the McKinney-Vento programs and highlights the Administrations intent to pursue McKinney-Vento reauthorizing/consolidation legislation during this Congressional session. The Administration continues to highlight permanent supportive housing as the keystone intervention in its commitment to end chronic homelessness –for second consecutive fiscal year it supports inclusion of the permanent housing set aside language in the FY 2008 HUD appropriations bill that the Appropriations Committee has imposed in each of the last nine appropriations bills. Additionally, the budget proposal notes the Administrations intent to pursue McKinney-Vento reauthorizing/consolidation legislation, which would include up to $50 million for the Samaritan Housing Initiative targeted to the supportive housing needs of the chronically homeless (down from the $200 million proposed in similar language in the FY 2007 budget submission).

The budget proposes a $15 million increase in the VA Grant and Per Diem transitional housing program. In what suggests a greater focus on the needs of homeless veterans, the President proposes to increase funding for this program from $92 million in FY 2007 to $107 million in FY 2008. While a modest increase in a program that targets only homeless veterans’ transitional housing needs, CSH hopes to work with the Administration, Congress, and other partners to build on this proposal to bring additional resources to bear on the urgent need to address the permanent supportive housing shortage for homeless veterans.

Most other targeted homeless programs are level-funded, although Grants to Benefit Homeless Individuals (GBHI) faces a nearly 20% cut. PATH ($54 million), Runaway and Homeless Youth Programs ($103 million), and the Homeless Veterans Reintegration Program ($22 million) are among the targeted homeless programs across various federal agencies that the Administration proposes to level fund.

Additionally, the Administration appears to have ended its initiative to increase Community Health Centers/Healthcare for the Homeless funding. (Healthcare for the Homeless receives 9% of annual Community Health Center appropriations) The budget proposes to fund Health Centers at $1.944 billion, nearly $20 million less than the $1.963 billion requested in FY 2007, although an increase of $44 million over the $1.9 billion included in the H.J. Res. 20.

An unfortunate exception to level-funding is the GBHI programs a source of services funding in some supportive housing across the country which faces a cut of $9.4 million from its FY 2007 funding level of $46.4 million.

But the outlook for plans to end homelessness, under development in communities nationwide, depends on more than just targeted federal homeless funding. Viewed in any broader context, the Administration’s FY 2008 budget continues its troubling pattern of seeking to undercut core mainstream housing, social services, and healthcare funding streams that are critical to preventing and ending homelessness on the scale needed.

The Administrations commitment to end chronic homelessness, and the efforts of its Interagency Council on Homelessness, have galvanized more than 200 towns, cities, regions, and states to undertake planning processes to end chronic homelessness over the next decade. Many of these plans also include strategies for preventing and ending homelessness for families with children, people with disabilities, youth transitioning to adulthood after foster care, and others. Some of the completed plans have ambitious supportive housing goals (for example, the state of Minnesota has set a goal of 4,000 new units, while Los Angeles, San Francisco, Washington, DC, and New York City alone seek to bring a combined total of well over 25,000 units on line in the next decade.

Central to the Administrations message to local and state governments around these planning processes have been exhortation and concrete incentives (e.g., in the McKinney-Vento Notice of Funding Availability) for these actors to bring mainstream housing, community development, mental health, substance abuse, income support, and healthcare resources to bear on the needs of homeless people in general and the long-term homeless in particular. A special emphasis has been placed on moving state and local governments in the direction of preventing homelessness through effective discharge planning from hospitals, jails, prisons, and other institutional settings. While breaking down bureaucratic and funding silos and encouraging collaborative initiatives is always painstaking, through the federal Policy Academies on chronic homelessness and homeless families which bring together high-level state officials to learn and plan collaboratively and the actions of committed state and local government leaders, progress is clear and ongoing.

The Administrations FY 2008 budget, if enacted, would dramatically alter the landscape of local and state controlled federal resources that can be used for ending homelessness. Proposed funding reductions and/or restructuring of important mainstream housing and services programs will undermine the capacity of state and local governments to partner in the Administration’s stated goal of ending chronic homelessness.

The budget proposal revives the Administrations attacks on funding of the Section 8 Housing Choice Voucher program. Last year, for the first time, this Administration sought sufficient funding for the Section 8 program, although CSH and many other stakeholders argued for a different funding allocation formula to PHAs than the Administration endorsed.. H.J. Res. 20 adopted essentially this funding level as well.

Sadly, the reprieve on fighting to overcome funding shortfalls proposed in this Administrations budget proposals was short-lived. This budget proposal would essentially freeze funding for Section 8, increasing total funding by $80 million, from the $15.92 billion provided in H. J. Res. 20 to $16.0 billion, an increase of 0.5 percent. To address the growing funding need of renewals of existing housing vouchers, the President requests an increase of only $8 million compared with the likely final 2007 funding level (which is identical to the Presidents 2007 request). The Center on Budget and Policy Priorities estimates that the proposed funding freeze on voucher renewals in 2008 could result in a shortfall of $300 – $600 million, cutting 40,000 – 80,000 vouchers in use.

The budget proposes to cut by a combined 28% HUDs 811 program, which funds housing for persons with disabilities and Section 202, which funds housing for the elderly. HUD 811 is nearly sliced in half, from $237 million for FY 2007 in H.J. Res. 20 to $119 million, while Section 202 is targeted for a reduction from $735 million in FY 2007 to $546 million. These effective programs provide supportive housing for low income people who are elderly or have disabilities and who would otherwise be at-risk of homelessness. By under funding them, the Presidents budget works at cross-purposes with its stated goal of ending chronic homelessness and supporting community integration for people with disabilities.

CDBG (a cut of $735 million or -20% of program funding) and Public Housing Capital and Operating Subsidies (down $278 million, or -6%) are targeted for substantial reductions. The Administrations longstanding effort to under fund public housing simply increases the probability that current public housing residents, or those who if their local PHA received adequate funding to sustain its public housing stock might otherwise have been able to obtain public housing, will instead experience homelessness. This creates a real hole in the bucket problem for those seeking to prevent and end homelessness in communities and nationwide.

The proposed cut to CDBG would be a devastating blow to localities seeking to devote mainstream housing and community development resources to supportive housing. CDBG is an important direct source of funding for many supportive housing projects, especially in communities with plans to end chronic homelessness that propose ambitious development pipelines . HUD data show that fully one quarter of CDBG funds support affordable housing. In addition, the loss of CDBG funding will increase competition for other sources of funds for affordable housing (e.g., HOME), making it much harder to dedicate these funds for supportive housing.

In the HHS budget, the Administration once again proposes to eliminate Community Services Block Grant (CSBG) in the HHS budget a $637 million cut if enacted– and for the second time targets the Social Services Block Grant (SSBG) for a funding reduction of $500 million. CSBG resource, which supports Community Action Agencies, is often the primary resource for social services funding in rural communities. Moreover, as with CDBG, the loss of CSBG and/or SSBG funding would greatly increase the squeeze on other federal, state, and local services funding streams (e.g., federal Mental Health and Substance Abuse block grants, local/state general funds devoted to community services) that the Administration, CSH, and others in the supportive housing movement agree should be used to meet the service needs of homeless people and the tenants of supportive housing.

Simply put, if the Administrations budget was enacted as a whole, state and local government partners in supportive housing initiatives would face huge challenges to sustaining and growing their commitment especially of mainstream resources because they will have less to work with. Moreover, the situation would become much more dire over time, should the Administrations projections for FY 2009 through FY 2012 come to pass. These projections, included as appendices to the budget proposal, yield a budget surplus while assuming, among other things, that all recent tax cuts are made permanent. This would be achievable only through progressively deeper cuts to domestic discretionary spending generally, and to critical safety net programs in particular. 4

WHAT SHOULD CONGRESS DO?

CSH and our partners are hopeful that the remaining steps in the FY 2008 appropriations process will restore the foregoing cuts proposed in the Administration’s budget, while retaining the important additional investment in HUD’s McKinney-Vento programs. To do so, Congress must set a ceiling for domestic discretionary spending as part of enacting its budget resolution for 2007. It should raise that cap above the $384 billion proposed by the President. Failure to do so will simply pit deserving programs the President has targeted for cuts against others he proposes to level fund or increase.

WHAT CAN I DO?

Stay informed and get involved in the Congressional debate over the FY 2008 budget starting today.

The first key step in Congress work on the FY 2008 budget drafting and voting on a budget resolution is expected to be completed by mid-April, so advocacy has already begun. While CSH is participating in large-scale coalition efforts on the budget debate, we urge you to visit the websites of these national organization who are spearheading this effort.

o National Low Income Housing Coalition at get up-to-date information about the federal budget and affordable housing policy online in Memo to Members

o Center on Budget and Policy Priorities join the Center’s listserv on Affordable Housing Policy and Welfare Reform and to be part of its grassroots budget advocacy network.

o National Alliance to End Homelessness sign up to get the Alliance On-Line News and to be added to its grassroots advocacy network. Advocate on the full range of 2007 federal policy priorities for supportive housing throughout the year.

o Visit the Policy and Advocacy pages of the Corporation for Supportive Housing website to view our 2007 Federal Policy Priorities for Supportive Housing document (forthcoming) and to get up-to date guidance on whats happening on them.

Gather data and stories that demonstrate the need for both policy solutions and full funding of key programs and use the media to help deliver the message to YOUR elected representatives

o We can’t afford to do nothing. Identify the costs of homelessness in emergency rooms, hospitals, jails, and human suffering

o Supportive housing makes a difference. Describe the changes in tenants lives and in revitalized communities, and the savings when costs to other systems are reduced

o Our communities cant meet this challenge alone we need help from the federal government. Describe the barriers to getting the funding to create and sustain high-quality housing for people who have experienced homelessness. Get local government leaders to speak out about the need for federal assistance and their willingness to work as partners.

Visit, call and write to your Legislators and Members of Congress make them YOUR champions

o Invite them to visit supportive housing projects and meet with tenants

o Ask for support from your mayor, county supervisors, and local government lobbyists

o Target congressional leaders, members of key committees and Democratic members of Congress

o Always say thank you and give credit for any help provided!

Footnotes

1 All references to FY 2007 funding levels refer to programmatic funding levels in the joint funding resolution, H. J. Res. 20, passed by the House on January 31, 2007. The Senate is scheduled to take up H. J. Res. 20 within the next week or so it is possible, though unlikely, that funding levels for FY 2007 will change as a result of Senate action.

2 Congress refused in FY 2006 and FY 2007 to appropriate funds for this reentry initiative due both to a lack of programmatic detail provided by HUD as well as the challenges created within the HUD appropriations subcommittee allocation (known as its 302(b)) by providing funds for a program administered by an agency, DOL, governed by another appropriations subcommittee. In light of the urgent need for reentry/homeless-focused funding nationwide, CSH will be working with our allies to overcome these issues in the FY 2008 appropriations process.

3 GBHI was also the account to which the House and Senate Labor-HHS appropriations subcommittees added funding to the Presidents FY 2007 budget request and earmarked the funds for services in permanent supportive housing. The House bill added $5 million to the Presidents requested amount, restoring the account to its $46.4 million funding level of FY 2006, and the Senate added $5 more million to the House funding level. Unfortunately, while the H. J. Res. 20 rejected the Presidents proposed cut, and funded GBHI at its FY 2006 level, it neither included the Senates addition $5 million nor earmarked any funds specifically for permanent supportive housing

4 Excellent analyses of the future impacts of the Administrations budget projections accompanying the FY 2008 budget are available at the websites of the OMB Watch at (projects 23% cut by FY 20012 in non-defense discretionary programs outside Homeland Security) and the Center on Budget and Policy Priorities at (specifies major funding cuts needed by 2012 to achieve Administrations overall budget surplus goals within a budget functions governing such key domestic program areas as health and secondary education).