Capital Outlook
By Dorothy Inman-Johnson
Special to the Outlook
Legislatively mandated tax cuts beginning around 2007, without regard for losses in revenue to meet state’s needs, has led to regular raids on state trust funds to fill holes left in the state budget. One of those funds is the State Housing Trust Fund created by the William E. Sadowski Act of 1992 to provide a dedicated funding source for affordable housing needs throughout the state. The funding for the trust came from a 10 cent increase in the Documentary Stamp Tax on mortgage closings and real estate transfers; and in 1995 a reallocation of 10 cents from existing Documentary Tax revenue from the General Fund for the state’s housing needs. The Sadowski Housing Trust Fund, once established, was only to be dedicated to housing; with 30 perecent for statewide housing programs and 70 percent for local government housing trust funds in Florida’s municipalities and 67 counties. Two-thirds of the State Fund was dedicated to the State Housing Initiative Partnership (SHIP) Program for housing repair/ renovation, housing accessibility and affordability. The rest of the state fund was to be dedicated to the State Apartment Incentive Loan Program, Homeownership Assistance Program (HAP), and homeless housing programs.
However, because of annual budget shortfalls due to years of huge corporate tax cuts, the Legislature has been raiding the Sadowski Housing Trust Fund by transferring over $1.3 billion to the General Revenue Fund to cover state expenses in other areas. We can look forward to the same when the huge corporate tax cuts passed by Congress take full effect, and major cuts to safety nets, Medicaid, Medicare and Social Security benefits are necessary to plug holes in the federal budget. In 2017, it was estimated that the doc stamp tax would generate $292 million for affordable housing. The Senate recommended transferring almost half to plug holes in the budget; while Governor Scott and the Florida House supported taking all except $44 million. Though advocates for low income, disabled, and elderly Floridians have provided documentation of the desperate need for these funds for the purpose intended, the Florida Legislature continues its raid instead of passing rational tax policies that fund the state at the level required.
This year Tampa Representative Sean Shaw, an attorney and the son of the late Florida Supreme Court Chief Justice Leander Shaw, is introducing a bill to prevent the continued drain on these funds by the Legislature. Though too late to work its way through the Legislative process in the 2018 Session, he is determined to get it passed in 2019. If not, a citizens ballot initiative might do the trick.
Why should we care here in Tallahassee? There are several reasons. First, every student housing or College Town development, though beneficial to the universities and the local economy, drives up market rental rates making housing less affordable and accessible for low to moderate income Tallahassee families. Second, every dollar taken from the State Housing Trust Fund reduces funding available to Tallahassee and Leon County for safe, affordable housing for these housing burdened households. And, third, while Tallahassee’s homeless emergency housing facilities like the Hope Community and Kearney Center are bursting at the seams, the homeless population will continue to grow without adequate funding to address the community’s need for adequate, affordable rental housing for low-income households.
The Sadowski Act requires every municipality and county to develop a Local Housing Assistance Plan (LHAP) with recommendations from its Affordable Housing Advisory Committee (AHAC), with its membership spelled out in state law. All policy recommendations made to the local government on the plan for adoption must be made available first to the public; and a public hearing must be held to ensure that the recommendations are true to the Trust Fund’s intent.
Local tax payers have a lot to lose if we are not involved in this local process and advocating for local Housing Trust funds to be used to address the community’s greatest housing needs. Today that need is for affordable rental housing for households at 50 percent or below the area median income (AMI). Likewise, we have much to gain by supporting efforts like the proposal by Representative Shaw to stop the raid on the state’s dedicated trust fund for housing to meet the needs of Florida residents. It is in all of our best interests to make sure every Florida resident has an opportunity for a safe and affordable place to live.
Article last accessed here.