Early this week, the House and Senate released their budget compromise position for Jobs and Economic Development. Funding for Minnesota Housing Finance Agency fared much better than previously expected. However, strides made in integrating housing and transportation planning face a possible setback.

Earlier this session, the House and Senate had released somewhat different budgets for housing programs for 2012-13. Compared to the 2010-11 budget, the Senate had proposed an 8% cut, and the House a 12% cut. By contrast, the Governor proposed a more modest 6% cut to the Minnesota Housing Finance Agency portion of jobs and economic development. Advocates had feared the possibility of the House-Senate conference committee deepening cuts for housing and homeless programs during this stage of the budget compromise, in light of proposals back in March to slash the entire jobs and economic development budgets by 40 and 50%. In the end, the House-Senate compromise budget cuts Minnesota Housing programs by about 7.6% compared to last biennium. 

Housing advocates can celebrate that the compromise budget adopts the Governor’s proposal for programs that serve the homeless and very vulnerable. This includes $19.1 million for the Housing Trust Fund, which helps Minnesota move towards ending long-term homelessness.

However, the bad news is that the Challenge Program, the state’s most flexible program for much-needed rehab and housing production, takes an additional hit of $408,000 compared to the Governor’s recommendations. The total cut for Challenge is $876,000, or 6%, compared to funding for 2010-11, but this is almost a full $5 million less than the amount recommended for Challenge last session by the Legislature. However, housing advocates remain optimistic that cuts to affordable housing development will be partially backfilled by housing bonds, should an omnibus bonding bill be part of the final negotiations.