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Seattle Housing budget planners struggle with uncertainties

Conflicts in Congress lead to limited information

SEATTLE — April 14, 2011 — As managers at the Seattle Housing Authority begin the process of budget preparation for 2012, the uncertainties surrounding the level of revenues that will be available from the federal government make the process difficult and unpredictable. With the shift in intention on the part of Congress and President Obama from stimulating the economy to reducing the deficit, however, budget planners are bracing for significant revenue reductions.

Executive Director Tom Tierney explained the difficulties of the current situation.

"The Housing Authority is caught in a squeeze between reductions in Washington State's assistance to low-income people and the inevitable reduction in revenues from Washington, DC.," Tierney said. "Reductions in state income supports for low-income people, including Temporary Assistance for Needy Families (TANF) and Disability Lifeline, mean that the neediest people we house can no longer pay even the modest rents they have paid in the past.  We are fully committed to covering these rent decreases, but it has already cost us nearly a million dollars in revenues to make up for the state cuts. At the same time, we know that our subsidy from the federal government will be lower, both this year and next. At a time when low-income people across the city need housing services even more, we will be hard pressed to respond."

With the final adoption of the 2011 federal budget in early April, Seattle Housing Authority experienced a reduction of about $1.1 million. Looking ahead to 2012, budget managers are considering reductions that range from over $22 million to around $10 million. The scenario for the greatest cuts is based on the House Republican budget proposed by Representative Paul Ryan. This proposal aims to return domestic funding to levels lower than 2008, the last of President Bush's budgets.

The lower level of cuts, around $10 million, is based on the budget proposal that President Obama has put forward, with anticipated deeper cuts as the Administration has to compromise to get a budget passed. Even this housing-friendly Administration is expected to agree to significant cuts directed to the Public Housing operating fund and Capital Fund.  

Housing Authority staff will focus initially on cutting the lower amount – about $10 million – from the 2012 operating and capital budgets combined. A range of options will be considered, from serving fewer people with vouchers (not issuing new vouchers as households turn them in), doing fewer capital repairs, cutting operating expenses and reducing staff.

"We have been fortunate during this recession to be able to retain or increase our funding due to stimulus work and a federal Administration that understands the housing needs of  low-income  households," said Tierney. "Now, we find ourselves facing the same difficulties that many other government agencies have faced due to reduced revenues. We will do our best to make reductions that will impact residents as little as possible. Inevitably, we will end up serving fewer people than we could have."

Seattle Housing Authority staff typically spend the spring and summer months drafting the budget so that it can be adopted by the Board of Commissioners in October. As proposals for budget cutting measures are developed, they will be shared through news on www.seattlehousing.org and through public meetings.