Measure 66 & 67 failure would mean heavy cuts in affordable housing

Bad news over the weekend on the affordable housing front.

First, yesterday the Oregonian reported that two affordable housing projects in South Waterfront have been scrapped.

This comes on the heels of a Friday afternoon press release from Victor Merced, Director of the Oregon and Housing Community Services, outlining major cuts to affordable housing if Measure 66 & 67 fail.

Projected cuts below:

Unlike the federal government, state government must operate with a balanced budget and cannot create a deficit. To balance the current budget, the Legislature enacted two tax increases, one on corporations and the other on high-income individuals. A special election in January will determine the fate of those two measures.

Oregon Housing and Community Services recently submitted two sets of potential reductions to our Lottery Funds and General Fund programs – a 5 percent cut list and a 10 percent cut list. The Legislative Fiscal Office requested that each agency go through this exercise in preparation for the February 2010 supplemental session. If the tax measures fail, the session will bring the budget back into balance by making cuts.

The exercise is particularly painful at OHCS because the majority of affected programs serve Oregon’s most vulnerable populations – people experiencing hunger and homelessness. The cuts go deeper than 5 and 10 percent for our General Fund programs, because most of the Lottery Funds in the department’s budget are committed to debt service on bonds and cannot be cut.

The cuts will affect thousands of Oregonians and put existing affordable housing stock at risk.

Again, the department’s General Fund cuts exceed the 5 percent target because we cannot cut any Lottery Funds committed to debt service. Therefore, at the lower level, each of the General Fund programs receives a reduction of 8.1 percent.

State Homeless Assistance Program – $232,373. Cuts approximately 1,900 service contacts with people experiencing homelessness.

Emergency Housing Account – $409,433. Reduces capacity of partners, affecting nearly 3,400 people experiencing homelessness.

General Fund Food – $159,821. Reduces food available to the food bank network by nearly half a million pounds.

To reach the target of a 10 percent reduction, OHCS must cut each of the General Fund programs by 17 percent.

State Homeless Assistance Program – $509,686. Cuts approximately 4,200 service contacts with people experiencing homelessness.

Emergency Housing Account – $898,048. Reduces capacity of partners, affecting more than 7,400 people experiencing homelessness.

General Fund Food – $350,550. Reduces food available to the food bank network by nearly more than a million pounds or more than 80,000 food boxes.

Our proposed cut to the Lottery Funds assumes that we will not issue $1.5 million in lottery-backed bonds. Since so few of these dollars have not been committed to debt service, OHCS has proposed one cut:

• Lottery Funds – $155,029. This cut will reduce the amount of lottery-backed bonds the state can issue by $1.5 million. In essence, each dollar cut means 10 fewer dollars in bond proceeds for the preservation of affordable housing stock. This, in total, equates to an approximate 7 percent reduction in funding capacity for the department’s lottery-backed bond programs.

Typically, OHCS uses bond proceeds to leverage other resources, so the overall impact of this relatively small cut would significantly hamper our ability to preserve the state’s affordable housing stock.

In November, Street Roots reported on other potential damages to Human Services if Measure 66 & 67 fails.

Street Roots also reported on the prospects of a affordable housing levy to fill the void.

Posted by Israel Bayer

One response to “Measure 66 & 67 failure would mean heavy cuts in affordable housing

  1. Pingback: Why we need tax reform in Oregon. « The Global Consciousness

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