After hearing from many housing advocates, the House and Senate funneled money to housing in their new budget proposals this week. Proposals for Minnesota Housing still see significant cuts over the last budget cycle, but they represent quite an improvement for housing. The new proposals place housing in a far better position, despite the fact that jobs and economic development funding (which includes housing) still faces a 40-50% cut overall in the House and Senate.
As detailed in a recent post, the Governor's budget proposal for Minnesota Housing totals $77.2 million for 2012-13. In a surprising move, the Senate matched the Governor's proposal item for item, except for a $2 million reduction to the Housing Trust Fund, a key component of the Plan to End Long Term Homelessness. The House came in an additional $2.7 million lower than the House, also cutting the Housing Trust Fund, among a number of other programs. All in all, the Governor's budget cuts 5-6% compared to 2010-11, the Senate cuts 7-8%, and the House cuts 11-12%.
Last week, hundreds of people made their voices heard at the Capitol by attending lobby days for Minnesota Coalition for the Homeless and Minnesota NAHRO, or writing letters, making phone calls, and scheduling visits with their lawmakers. HousingJobs advocates affiliated with MHP and the Metropolitan Consortium of Community Developers (MCCD) were among them. Our hard work has paid off for now, even though housing advocates must keep up the pressure as session moves forward.
Where did the extra dough for housing come from? Lawmakers shifted millions from the Iron Range Resources and Rehabilitation Board (IRRRB) tax trust fund to the general fund for use by other jobs, economic development, and housing programs. While housing funding looks better for now, lawmakers could easily shift course and move money away from housing.
For the detail-minded, here's more about the current budget proposals. Compared to the Governor's budget, the House shaves away appropriations dollars from each Minnesota Housing program, save Bridges, which provides rental assistance to folks with mental health problems, and the Family Homeless Prevention program. However, the Housing Trust Fund, a key component of the Plan to End Long Term Homelessness, is cut by a more significant $2.5 million. The Senate budget looks similar to the Governor's budget, except for a cut of $2 million the Housing Trust Fund. See MHP's budget table for a more complete budget picture.
It's worth remembering where we've come from, however, and the painful cuts in all the current budget proposals. Back in 2008-9, Minnesota Housing received $114 million from the state, including nearly $38 million for the flexible Challenge fund. Considering the Challenge fund alone, about 900 fewer homes will be rehabbed or built compared to the 2008-9 years, assuming an average investment of $25,000 per unit as we've seen in recent years. However, given the state of the state's budget, housing advocates have a lot to celebrate, now the dramatic cuts that threatened housing last week are less serious.