No Promises to Pay Back Money Taken from Sadowski Fund

THE CAPITAL, TALLAHASSEE, Jan. 14, 2009……….Senate budget chairman J.D. Alexander, who led negotiations with the House on the budget fix that includes taking $190 million from the Sadowski Trust Fund for affordable housing, ruled out on Wednesday the possibility of those funds being repaid with federal stimulus dollars.

Lawmakers have promised supporters of the Lawton Chiles Endowment that they will put back the $700 million they are taking from that trust fund, but Alexander said that housing advocates should not expect the same treatment for the Sadowski fund.

“We’re planning on…looking at all these programs that are paid for by the Sadowski Act dollars to make sure they are focusing the help where it needs to be,” Alexander said after the Senate approved a package of cuts and trust fund sweeps totaling $2.8 billion. “There’s concern that given the foreclosures and vacant homes around our state…that we may not have as big a need for new apartments and projects coming on line.”

Alexander added that the state did not completely raid the Sadowski fund, which uses money collected from a tax on purchase documents for commercial and residential properties to fund affordable housing projects and provide down payment assistance. The state is leaving about $113 million in the fund.

However, housing advocates, who said after the House and Senate agreed to take the money from the Sadowski fund that projects already underway could be stopped by the decision, planned to push for a veto from Gov. Charlie Crist. The governor has 14 days to act on the budget approved by the House and Senate Wednesday. During those two weeks a coalition of private sector affordable housing advocates will press Crist to reject the cut, said Jaimie Ross, affordable housing director of 1,000 Friends of Florida, a non-profit smart growth advocacy group.

“We hope when the governor sees the real people who will be hurt by this, we’ll be received favorably,” Ross said.

The Coalition for the Hungry and Homeless of Brevard County was very nearly in the group of those who would be hurt. Executive director Virginia Ferguson said that until lawyers from the Florida Housing Finance Corporation reassured her Wednesday afternoon that an apartment building under construction for active military and veterans with children would be paid for, the Brevard County homeless coalition was “frantic.”

“That could have bankrupted our little non-profit,” Ferguson said. “We got lucky, but I hear some are not going to be so fortunate. I hate that because we need more affordable housing.”

Ferguson said the project that would have been imperiled by the Sadowski fund sweep will have 10 two and three bedroom units. It is already 75 percent complete, she added, with the rest depending on funding from the state that will ultimately equal 30 percent of the project.

Sadowski coalition member Ross said that despite stories like Ferguson’s, the group was not surprised by the lack of plans to repay the $190 million being taken from the Sadowski Fund and would not push for a similar promise to one given to the Chiles Fund.

“We have a trust fund, which is as good a promise as you can get,” Ross said. “A promise to repay would not be something that would make us sleep any better at night. When you break a trust fund, I don’t know how good any additional promises you make are.”

Ross added that any money received by the state for housing development as part of President-elect Barack Obama’s proposed economic stimulus should not be used for I.O.U.s.

“That should be supplementary money,” she said. “We should not be using that to supplant state money.”
Copyright 2009 The News Service of Florida