Thanks to an improving economy, Mayor Gray submitted his first budget that didn’t have to focus on closing a significant budget shortfall. The mayor’s proposed budget for fiscal year 2014 includes notable investments that will support DC residents and communities ‘ including investments in affordable housing, libraries, education, public safety, public works, and human services.
At the same time, many DC residents have not felt the benefits of the recovery, and a number of programs aimed at helping these residents remain strapped. Identifying additional resources for these services could help the District fully recover from the impacts of the Great Recession.
Mayor Gray’s proposed budget makes a number of notable investments that would help low- and moderate-income residents:
- Affordable housing. Mayor Gray made good on his $100 million pledge for affordable housing, including $87 million for the Housing Production Trust Fund. Other housing investments include $1 million each for Emergency Rental Assistance, Rapid Re-Housing, and Home Purchase Assistance, and $3 million each for the Local Rent Supplement program and housing for victims of domestic violence. The proposed budget also allocates $4 million to further efforts to create a centralized affordable housing database.
- Special education early intervention. The mayor’s budget includes $4 million in the current year and $6 million in fiscal year 2014 to expand early intervention services for infants and toddlers with developmental delays. The funding will allow the DC Early Intervention Program to broaden coverage to serve children with a 25 percent developmental delay in two or more areas, rather than the current standard of only serving children with delays of 50 percent or more. Funding for next year also will extend coverage until age four. Identifying and addressing delays early can improve a child’s chances of succeeding in school.
- Delay in the benefit cut for Temporary Assistance for Needy Families (TANF) recipients. Cash assistance benefits for families who have received benefits for more than 60 months were cut 20 percent in 2011. Under current law those benefits would have been cut further in October 2013, with the maximum benefit for a family of three falling from $342 per month to $171. The proposed budget slows down the pace of the reductions, setting the maximum benefit for a family of three at $257 for fiscal year 2014 for affected families.
- Domestic Violence Services. Mayor Gray’s budget includes increased funding for services for domestic violence victims, in addition to the funding for housing for these residents, to head off a potential significant cut to this area from lost federal funds.
Mayor Gray’s fiscal year 2014 budget also included $30 million for the Department of Human Services to replace federal TANF funds that have been carried over from prior years but will be fully spent in 2013. In addition, the Mayor’s budget restored a $20 million cut to the Housing Production Fund that had been in place for the last two years.
While Mayor Gray’s budget included great investments across DC government, his budget unfortunately left some areas behind.
- Interim Disability Assistance (IDA). The IDA program provides $270 a month to residents with disabilities that prevent them from working. These residents are in limbo ‘ unable to work and waiting for a determination on whether they qualify for federally-funded Supplemental Security Income (SSI) benefits, which can take a year or two, if not longer. Local funding for IDA was cut from $6 million in FY 2008 to $1.5 million in FY 2013 which led to an 80 percent decrease in the number of residents served, even though the need remained the same, with caseloads falling from 2,900 to 550 individuals. The mayor’s budget has only a modest increase of $125,000 for IDA in fiscal year 2014, enough to provide benefits for only 38 additional individuals.
- Temporary Assistance for Needy Families. Mayor Gray’s budget did not provide funding to protect particularly vulnerable families who need time to deal with serious issues that interfere with their ability to work, such as domestic violence or the care for an ill child. Currently, the District doesn’t require these families to be looking for employment, but each family’s 60-month time limit clock continues to run. Most states stop the clock to allow families time to deal with these issues. The Council’s adopted budget for 2013 provided time limit exemptions for these families, but it was put on a contingent list that was not funded due to inadequate revenues. The FY 2014 budget does not include funding for these protections.
It is also unclear at this point if the budget includes enough additional funding to address the significant increase of homeless families at the DC General shelter. Family homelessness has nearly doubled since the recession and while the budget includes funding for homeless families, it isn’t clear if it is much of a change from last year’s funding. Already this year, there is not enough space at DC General to serve all families and over 150 are at motels. Also, the budget would make significant changes to the policies governing the services for homeless families, and the impacts of these proposed changes on families needing help is unclear. Stay tuned to the District’s Dime over the next few weeks for a more complete analysis of these changes and the budget for homeless services.
While Mayor’s Gray budget was helped by the growing economy, unfortunately sequestration limited the growth in overall revenue. The mayor again included this year a priority restoration list of programs and services he would like to see funded if revenues grow more than anticipated. The top five items include: $11 million to increase funding for child care to expand the number of slots and increase the reimbursement rates for providers; $6 million to the Office on Aging to support provider rate increases; $4 million to increase adult literacy programs; $2 million to expand the school mental health program and $3 million to increase funding for summer initiatives funded by the Children and Youth Investment Trust Corporation.
Lastly, Mayor Gray’s budget includes a proposal to restore a tax break for residents who invest in out-of-state bonds. This move would make DC the only state to offer a tax break to residents that encourages them to invest in other states infrastructure and would cost the District nearly $12 million over the financial plan window.
The out-of-state bonds tax break was eliminated just a few years ago and DC’s leaders dealt with the elimination in a reasonable way’by exempting residents who had already made investments assuming they would be tax exempt. The benefits of this decision to limit the bond tax break to residents who invest in DC bonds was clear, with an increased demand for DC bonds that helped lower the cost of issuing them. The District should not reinstate a costly tax break that encourages residents to invest in other states infrastructure.
Check back into DCFPI over the next few weeks as we will be breaking down the mayor’s budget in greater detail and for the release our budget toolkit that include in-depth analyses of the entire DC budget and key issue areas including: education, affordable housing, homeless services, health care, and revenues, just to name a few.
