President’s Budget Released
On Monday, February 2
nd, the Obama Administration released its budget request for fiscal year 2016. The newly released budget proposes many new tax policies and spending figures which do not adhere to the spending levels agreed to in the Budget Control Act of 2011. The budget calls for a total of $3.99 trillion in spending for FY 2016, a 6.4% increase from the current year. This increase in spending has drawn sharp criticism from Republicans. Included is a proposal for more than $1 trillion in new tax measures over the coming decade, though Republicans declared that this is a nonstarter.
For the Department of Housing and Urban Development, the requested gross discretionary budget authority is $49.3 billion, an amount that is $2.7 billion more than what was requested for FY 2015, and $3.8 billion more than what was appropriated for FY 2015 in the omnibus appropriations bill (H.R. 83).
With the assumed funding increases over FY 2015, the Obama Administration’s FY 2016 budget proposes higher funding levels for some HUD programs. Below is a chart comparing the FY 2016 request with the FY 2015 funding appropriated through the most recent omnibus bill (H.R. 83).
|
Project-Based Section 8 |
Housing Choice Vouchers |
HOME |
Section 202 |
Section 811 |
Community Development Block Grant |
| FY 2016 Budget Request |
$10.76 billion* |
$21.12 billion** |
$1.06 billion |
$455 million*** |
$177 million |
$2.80 billion |
| FY 2015 Omnibus (H.R. 83) |
$9.73 Billion |
$19.3 Billion |
$900 Million |
$420 Million |
$135 Million |
$3 Billion |
*Includes $400 million in advanced appropriations (for FY 2017) and $10.55 billion for contract renewals
**Includes $18.33 billion for contract renewals
***Includes $77 million for Service Coordinators
Additionally the budget proposes higher spending for rural affordable housing programs administered by the U.S. Department of Agriculture’s Rural Development:
|
Section 515 |
Section 521 Rental Assistance |
Section 538(Loan Level) |
Revitalization and Rural Housing Vouchers |
| FY 2016 Budget Request |
$42.27 million |
$1.172 billion |
$200 million |
$34 million/ RHVs: $15 million |
| FY 2015 Omnibus |
$28.40 Million |
$1.088 Billion |
$150 Million |
$24 Million/ RHVs: $7 Million |
Still a major area of concern in this budget is the proposed funding level for the Project-based Section 8 (PBS8) program. The budget requests a top line total of $10.76 billion for the program, of which $10.55 billion is specifically slated for PBS8 contract renewals. While the Administration has requested a funding increase for PBS8, NAHMA remains concerned that the funding level is not adequate to fully fund all contracts for 12-months
at the time of renewal. HUD has stated that the requested figure will ensure full-funding for 12-months for all contracts, but this is contingent on the Department transitioning to a calendar year funding schedule. The Congressional Justification, which outlines why certain requests were made and includes information on specific program alterations, stated:
“The Department’s fiscal year 2016 request provides for the first complete year of funding under the new calendar year methodology, and represents the baseline level for 12-month funding of contracts… HUD does not expect the calendar year funding methodology to have a significant impact on stakeholders, investors, or lenders because there will be no change in contract terms or duration in fiscal year 2016; rather, the Department will only shift the timing for funding of the contract”
NAHMA is still skeptical of the calendar year transition because it is a new, untested idea. Additionally, sequestration may return in FY 2016, and we are concerned about whether the Department would have enough money to fund contracts at the $10.55 billion requested level under the calendar year schedule of funding. We are in the process of reviewing all details of the budget and are currently following up with Congressional staff to see whether they anticipate the requested amount for PBS8 in the Administration’s budget will provide full 12-month funding for all contracts under the calendar year model.
After the release of the Obama Administration’s fiscal year 2016 budget, the Director for the Office of Management and Budget (OMB) (and former HUD Secretary), Shaun Donovan, appeared before both the House and Senate Budget Committees to deliver testimony and answer the questions of lawmakers.
The hearings were notably contentious as many Republicans were critical of the Administration’s proposals to increase spending and taxes. The questioning and Donovan’s testimony mainly focused on these issues. Specific program spending for affordable housing programs was not discussed.
During the Senate Budget Hearing, senior committee member Jeff Sessions (R-AL) was sharply critical of the budget’s proposal to increase spending past the established cap for FY 2016 created under the Budget Control Act of 2011. Donovan replied that the budget proposes to lift these caps and eliminate the mandatory sequestration cuts that would result due to higher spending. He continued that the budget offsets the spending increases with reductions to mandatory programs accounts. Still, the Administration’s budget, if enacted, would result in a deficit of nearly $474 billion in FY 2016.
As a reminder, NAHMA will be hosting two conference calls to discuss HUD’s FY 16 budget request for Project-Based Section 8 and our legislative strategy to ensure the program receives full funding. NAHMA’s advocacy consultants, Bill Simpson (a former Senate Appropriations Committee professional staff member) and Melody Fennel (a former HUD Assistant Secretary and Senate Banking Committee professional staff member), will provide early feedback from key congressional offices about the adequacy of HUD’s request. They will also explain the simple, proactive steps NAHMA members can take to ensure this essential program receives full funding in the appropriations process, and
why it is so important that all NAHMA members ask Congress to fully fund Project-Based Section 8 before mid-March.
To make sure we can accomodate as many members as possible, we will host calls on February 18 and 20. Each call is scheduled to begin at 2 PM Eastern Standard Time. Please RSVP to this email and let me know which call you would like to join:
Feb. 18 at 2:00 or Feb. 20 at 2:00. We need to keep a count in case we have to add more phone lines. The substance of each call will be the same, so there is no need to sign up for both.
