Budget process underway for 2013
Election-year uncertainty creates challenges
SEATTLE — July 12, 2012— Staff at the Seattle Housing Authority are now well into the process of budget drafting for 2013. Once again, their work will be challenging, as housing authorities across the country face a second year in which they anticipate a reduction in federal funding from the Department of Housing and Urban Development.
Making the problem worse, many residents who reside in Seattle Housing communities continue to see reductions in the assistance they have depended upon from the State of Washington or the City of Seattle– both in services and in income supports. While the private sector is adding employment at a gradual pace, these additions are offset by continuing reductions in state and local government payrolls.
Estimates of what the federal budget for 2013 might look like vary widely—from an increase of 3.2 percent (recommended by HUD) to a decrease of 3.4 percent (passed by the House of Representatives). In fact, most political experts agree that there will be very little clarity on the 2013 federal budget until after November’s election or until early 2013. And, passage of a 2013 Budget is not the end of it.
The current law – the Budget Control Act of 2011 – calls for reductions in spending of 7.8 percent across the board in all non-defense program, through a process called "sequestration." This means whatever 2013 Budget is passed by Congress and signed by the President will then be subject to an automatic withholding or sequestering of 7.8 percent. As a result of the failure of the "Super Committee," (established last year when the Congress authorized an increase in the Federal Debt Ceiling) the Act provides for these automatic reductions in order to reduce the federal deficit by $1.2 trillion. If this automatic trigger takes effect, it could mean reduced federal funding overall for Seattle Housing for 2013 of 4.9 percent to 11.2 percent.
With this much difficulty in predicting the future of budget allocations, Chief Financial Officer Shelly Yapp has emphasized caution. "We much plan for budget reductions in planning the 2013 Budget," she said recently. "The issue is not whether there will be reduced federal funding; it’s a question of how deep the reductions will be."
Yapp goes on to indicate that, "Unless current law is changed, we would face a projected 2013 budget gap of $10.5 million. Given our expectation of reduced revenues, we are looking to keep our costs down as much as possible in order to preserve staff capacity and service levels."
Seattle Housing Authority directors and managers submitted their draft budgets to the budget office in early June. They have generally tried to reduce their expenses over last year by about 4 percent. Over the next couple of months, staff members will work to refine the drafts and recommend a budget to the Board of Commissioners.
Yapp expects that a summary of the 2013 Proposed Budget will be issued on August 31 for public comment and the detailed budget book will be available on the website in mid-September. A public hearing will be held in mid-September and the Board of Commissioners will review the draft at their September meeting. Traditionally, the Board passes the final version of the budget at their October meeting.