While the rich are getting tax cuts, the neediest amongst us may literally lose their roofs.
Included on the list of social services being gutted by the Bush Administration is Section 8, a federal housing program that provides aid to about two million low-income families. Mostly through vouchers, the federal government allocates funding to local housing authorities, which then pass the money to the poor in the form of rent assistance. Housing Authorities throughout the country knew cuts were coming, but no one was sure how deep they'd be.
In April, "the issue boiled to a head," says Michael Tonovitz, director of leasing operations at the Rochester Housing Authority. That's when the United States Department of Housing and Urban Development (HUD) announced the finances available for Section 8 programs throughout the nation. The program will no longer cover the full cost of the vouchers, but will cap the payments at the levels of last August's rental rates, adding an adjustment for inflation. Any increase to rental rates since then will not be covered. In addition, the cuts are to be implemented retroactively to January 1 of this year.
In total, the program was cut to the tune of about $1.6 billion. Most cities took a severe blow, but Rochester has so far only suffered a flesh wound.
"I've done our estimates, and, at least this year, we're going to be alright," Tonovitz says. "We're taking a 10 percent cut to our administrative fees. If we had to, we could live with that for a year."
As long as HUD keeps its word about the announced funding, the average recipient of Section 8 benefits in Rochester should not notice a difference this year, Tonovitz said. The Rochester Housing Authority has enough funding to maintain the voucher payments currently in use.
Section 8 benefits nearly 6,500 families in Monroe County, all of which live at or below the poverty level. Under the program, recipient families are responsible for finding housing and paying a portion of their monthly income --- typically between 30 and 40 percent --- towards rent. The remainder of the rent is paid by the Rochester Housing Authority.
The Center on Budget and Policy Priorities (CBPP), a liberal-leaning Washington-based research group, issued a scathing condemnation of the cuts. The group estimates a financial shortfall of hundreds of millions of dollars to the nation's poor.
"The new HUD policy will result in many state and local housing agencies failing to receive sufficient funding to continue supporting all vouchers now in use," the report states.
Consequently, the agencies charged with helping low-income families will have to dramatically cut back on services. The new policy represents an "unprecedented departure from the longstanding federal commitment to provide state and local housing agencies with adequate funding to support all vouchers in use," the report states.
HUD Secretary Alfonso Jackson and his office lay some of the blame for the cuts on individual housing authorities. They stretched the federal funding they received to provide housing for more families than initially estimated, Jackson says. Because of this, HUD says, too many families became dependent on funding that was never guaranteed.
Tonovitz, however, says it is a common practice for any housing authority to try to get the most value for the money spent. The more families served, the better, he says.
"It burns me up as a professional when the HUD secretary says that many housing authorities created their own problems through mismanagement," Tonovitz says. "Just because you served more families than you're authorized? In many cases, that's good management."
There is also a dispute over the amount of money available to HUD for the program.
The CBPP report says not only are the cuts unnecessary, but that HUD will actually end up with a surplus of $200 million of unspent funds allocated by congress for use for the voucher program.
"Congress provided HUD with substantially more money than will be used under HUD's restrictive new policy," the report states. According to the CBPP, a joint House and Senate appropriations committee awarded HUD "the amount needed to support all vouchers likely to be in use."
HUD, however, disputes these figures. The department claims that if the system is not revamped, the current process would lead to a $191 million deficit, as more vouchers are being issued than funding permits.
In addition, HUD says the new policy is flexible and allows for the neediest housing authorities to receive supplementary money. Those authorities have until July 15 to file a request, which will be judged on a case-by-case basis.
Still, for now, the Rochester Housing Authority says it will be able to operate and provide basically the same standards for the city's poor. But no one is taking the city's situation for granted.
"I think this is an anomaly," Tonovitz says.
If rental rates in the city increase faster than inflation rates, or if the formula HUD uses to ascribe payment amounts changes, Rochester could face the same problems as Syracuse and New York City, both of which lost funding for vouchers that have already been issued.
"I think we're one of the few large city housing authorities that are not in panic mode right now," Tonovitz said. "We could be in the same boat as the rest of them next year, though, depending on how the payments are structured."