In This Issue
Governor Quinn’s Fiscal Year 2014 Budget Proposal: A Mix of Flat Funding and Cuts
Action Alert: FY 2013 Federal Budget Bills Moving in House and Senate—More Calls Needed to Senators Durbin and Kirk
Hot Rental Market Makes Affordable Housing Out of Reach for Many in Illinois
Governor Quinn’s Fiscal Year 2014 Budget Proposal: A Mix of Flat Funding and Cuts
Illinois Governor Pat Quinn released his FY 2014 budget proposal last week. Three of the four main programs of concern to advocates for ending homelessness were flat-funded: Emergency and Transitional Housing, Homeless Prevention and the Homeless Youth program. In light of the state’s continued budget problems, this was a welcome occurrence as in recent years all these programs have been cut in the governor’s budget proposal. However, since the House approved overall spending limit is $500 million less than the governor’s $35.6 billion proposal for General Revenue Funds, we will still need to advocate for these programs between now and when the General Assembly passes their final FY 2014 budget at the end of May.
Like in the current fiscal year, most of the funding for these programs—$13.1 million of $17.2 million—is coming from the Illinois Affordable Housing Trust Fund, rather than state General Revenue Funds. On the plus side, this may insulate these programs from cuts by the General Assembly, but it also means that the Trust Fund will have significantly less resources to create and preserve actual housing units.
From a housing perspective, the most troubling part of Governor Quinn’s budget proposal is that it reduces funding for services in supportive housing by $3 million from the current year amount of $26.73 million. The Supportive Housing Providers Association and others had successfully advocated for a $3 million increase for the current fiscal year to assist approximately 1,100 households. If the General Assembly doesn’t restore this $3 million, supportive housing providers won’t have the resources to provide the services crucial to people maintaining their housing next year. There is also a need for an additional $1.5 million in funding for new supportive housing projects scheduled to open next year. In total, we need to advocate for a $4.5 million increase above the governor’s office proposed level for FY 2014—a total appropriation of $28.23 million.
Please look for upcoming action alerts regarding the FY 2014 state budget.
Action Alert: FY 2013 Federal Budget Bills Moving in House and Senate—More Calls Needed to Senators Durbin and Kirk
Sequestration, the across-the-board spending cuts of slightly more than 5% to all security and non-security discretionary programs, went into effect on March 1. These cuts will impact virtually every program within the Department of Housing and Urban Development (HUD). The White House has released estimates that not reversing sequestration will result in the loss of about 125,000 Housing Choice Vouchers nationally. Moreover, about 100,000 fewer people will be served cuts to Homeless Assistance Grants.
Last week, the House passed legislation for the remainder of FY 2013 last Wednesday that would extend the current Continuing Resolution and fund most all of the federal government—with the exception of Veterans Affairs and Defense programs—at FY 2012 levels.
Using FY 2012 levels for FY 2013 would exacerbate the effects of sequestration on programs for affordable housing and to end homelessness. For example, the FY 2012 budget cut operating funds for public housing by $750 million, but targeted this cut on housing agencies with reserves that they could draw down to help cover their costs. This one-time savings cannot be repeated, yet the cut is carried forward to FY 2013. If extended for the rest of the year, it would mean that, even before sequestration, housing agencies would receive only 77 cents for every $1 they need to cover the gap between their operating costs and the rents that low-income residents can afford for the remainder of FY 2013. This would accelerate the loss of affordable housing due to deterioration as agencies are forced to forego maintenance and repairs. This would also mean that low-income households would not have the opportunity to access this federal investment in the future.
For homeless programs, HUD’s McKinney-Vento Homeless Assistance Grants were funded at $1.905 billion in FY 2012. Due to increased renewal burden for FY 2013 and the 5% cuts caused by sequestration, this funding level would result in about 10% cuts to programs in the next funding round.
Action Needed: The Senate is expected to take up some sort of FY 2013 funding legislation this week. The Senate may pass a new bill funding HUD at fuller levels for FY 2013, add exemptions for certain HUD programs, or keep FY 2012 levels just as the House did. HUD programs could receive an additional $1-$2 billion from being funded through a FY 2013 omnibus budget bill rather than a Continuing Resolution at FY 2012 levels.
Please call the DC offices of Illinois Senators Richard Durbin (202-224-2152) and Mark Kirk (202-224-2854) and let them know that the HUD budget should be included in the FY 2013 omnibus budget bill they are considering.
Hot Rental Market Makes Affordable Housing Out of Reach for Many in Illinois
Renters in Illinois need to earn $17.02 per hour in order to afford a basic apartment, according to a report released today that compares the cost of rental housing with what renters can really afford. The National Housing Wage is $18.79 in 2013.
The report, Out of Reach 2013, was jointly released by the National Low Income Housing Coalition and Housing Action Illinois. The report provides the Housing Wage and other housing affordability data for every state, metropolitan area, combined non metropolitan area, and county in the country. The Housing Wage is the hourly wage a family must earn, working 40 hours a week, 52 weeks a year, to be able to afford the rent and utilities for a safe and modest home in the private housing market.
In Illinois, a minimum wage worker earns an hourly wage of $8.25. In order to afford the rent for a two-bedroom apartment, a minimum wage earner must work 82 hours per week, 52 weeks per year. Or a household must include 2.1 minimum wage earners working 40 hours per week year-round in order to afford a modest two-bedroom apartment.
Across the state the Housing Wage ranges from $23.52 in the Kendall County metropolitan area to $11.23 in the Macoupin County metropolitan area. The Housing Wage in the Chicago metropolitan area is $18.58.
The typical renter in Illinois earns $14.52, which is $2.50 less than the hourly wage needed to afford a modest unit. An estimated 54% of renters in Illinois do not earn enough to afford a two-bedroom unit.
For additional information, visit http://www.nlihc.org/oor/2013.