Housing trust fund slated for elimination
By Lynn Hatter
Tallahassee, FL – In addition to merging three state agencies into one economic development entity, the Florida legislature is also considering merging their corresponding trust funds as well. One of those trusts goes to provide affordable housing and down-payment assistance for low-income people. But as Lynn Hatter reports, both the House and Senate are seeing its potential for millions of extra dollars for the state at a time when money is scarce. While a coalition of groups are trying to save it from going away forever.
At one time the Sadowski Affordable Housing trust fund had almost a billion dollars in it. Now, after three years of budget cuts and trust-fund sweeps, the fund has about 194-million. The fund's flagship program, SHIP, provides down-payment assistance for low-income people to buy homes. It hasn't been funded in the last two years, while home prices have dropped off due to the recession. Advocates for the fund, like Florida Realtors President Patricia Fitzgerald, want the state to fund SHIP- saying that will get people into houses that, a few years ago, may have been out of reach.
"We hope that the Ship program will be funded this year so that we can help Florida's real estate market recover from the foreclosure crisis and assist Families in achieving the American dream of affordable home ownership at a time when more opportunities are available."
But the Florida legislature has other ideas for the money. The House is considering merging the Sadowski Trust fund into the Transportation Trust fund and a few others. The idea behind that is to create a super-fund to be used for a variety of different projects a blanket term called "economic development". It's called the SEED proposal and it's piggy-backing on a plan backed by Governor Rick Scott to merge the three state agencies that deal with jobs. The state's biggest business lobbying group, Associated Industries of Florida says it supports merging the agencies but not the trust funds. Jose Gonzales is the group's director of Government Affairs. He says the bulk of the money is coming from Sadowski.
"There are a lot of unanswered questions about the dollars are going to be appropriated. We are in support of consolidating the economic development organizations, but the Seed fund does give us some pause, and we're hopeful that either some language is added that says this amount will be spent on housing and this amount on economic development that would give us some comfort even though we would still prefer the original Sadowski trust fund the way it was intended to be."
Meanwhile, the Senate is considering a proposal that redirects the funding source for Sadowski into General Revenue. The Housing Trust gets its money from doc-stamp revenue - dollars the state collects when homes are sold. Lawmakers are eying those dollars as an additional revenue source for the state. But Florida Housing Coalition President Jamie Ross she's hoping that won't happen.
"What we're working on is that neither would happen. That we would not have the redirect of the money in the senate and that we would keep the trust fund money in the estate and local trust funds to be used for the programs that they fund."
Both Associated Industries and the Housing Coalition are coming out in support of a bill by Representative Gary Aubuchon that would lift the cap on how much money the Sadowski trust fund could take in. Right now, its revenues are limited by the state. But Aubuchon is also backing the SEED trust fund merger. Ross says the ideas are not contradictory, but are a matter of timing.
"It wasn't until the Senate was moving in a fast-track way to permanently re-direct the Trust Fund money into general revenue that the house that's when the seed proposal came out. It is confusing, but that's the reason. It's because the House came out with the Seed proposal in response to thinking, "oh my goodness, it looks like there's going to be a complete loss of the doc stamp'."
Meanwhile, advocates for the program are hoping lawmakers will leave the trust fund alone. They say it's an important jobs driver helping to get people into homes they can afford and ump-start the state's economy. But in the last three years the legislature has diverted almost 700-million dollars to fill the budget holes, and whether the program clears the 2011 legislative session in its current form is still up in the air.