State and Federal Budget Issues
Senate Appropriations Committee Clears FY 2007 HUD Budget – Section 811 Funding Restored, Homeless Funds Increased
July 25, 2006
On July 20, the Senate Appropriations Committee passed legislation funding the Department of Housing and Urban Development (HUD) for FY 2007. The legislation, known as the Treasury-Transportation-HUD Appropriations bill (HR 5576), includes a total of $36 billion for HUD for FY 2007, $1.2 billion above the President's request.
The House passed its version of the FY 2007 Treasury-Transportation-HUD Appropriations bill on June 14. It is unlikely that the Senate version of HR 5576 will forward prior to the upcoming mid-term elections. As a result, Congress will have to take up the bill as part of a post-election “lame-duck” session.
Most importantly for NAMI, the Senate bill (like its House counterpart) includes full restoration of funding for the HUD Section 811 program. Section 811 had been proposed for deep cuts in the President's FY 2007 budget proposal and will actually increase funding for new capital advance and project-based assistance grants in FY 2007.
For Section 811, the bill includes $240 million. This is nearly $4 million more than the current FY 2006 level and $121.2 more than the President requested. More importantly, it places both the House and Senate on record firmly rejecting the Bush Administration's proposal to cut Section 811 funding by $120 million and eliminate all but $15.8 million from the capital advance/project-based side of the program.
Capital advance and project-based grants to local non-profit disability organizations are the traditional form of 811 assistance and actually expand the inventory of accessible supportive housing serving individuals with severe disabilities -- including severe mental illness. This is in contrast to tenant-based rent subsidies that cannot be used to develop new supportive housing units.
Since the President's budget came out in February, NAMI (along with colleague national disability groups) fought hard to restore funding for Section 811. NAMI is extremely grateful for the leadership of Senators Kit Bond (R-MO) and Patty Murray (D-WA), Chairman of the Appropriations Subcommittee that drafted HR 5576, in restoring funding to Section 811.
The Senate bill also includes $5 million for new Section 811 tenant-based rental assistance. By contrast, the House-passed version provides no funding new tenant-based assistance. NAMI and a coalition of other national disabilities organizations are urging Congress not to fund any new Section 811 tenant-based assistance (also known as the “mainstream” voucher program for people with disabilities) out of concern that HUD has failed to ensure that housing agencies are actually targeting rental assistance to individuals with severe disabilities.
Section 8 Rental Voucher Funding Boosted
The largest program at HUD is the Section 8 rental voucher program – projected to reach at least $15.92 billion in FY 2007, nearly 50% of the overall HUD budget. Section 8 provides rent subsidies to individual tenants to pay the difference between the cost of rent and 30% of the voucher recipient’s monthly income. Section 8 serves just over 2 million households, most of them extremely low-income (including individuals eligible for Supplemental Security Income, SSI).
This $15.92 billion total includes $14.436 million to renew all of the existing vouchers in the program for FY 2007, a 3.5% increase over FY 2006. This represents a significant slowdown in the growth in Section 8 renewal spending when compared to the 8% to 10% increase of just a few years ago. The Senate bill also includes important changes to the funding formula for Section 8, allowing housing agencies a broader range in which to measure the number of rental vouchers in use for determining how much they will receive in renewal funding during FY 2007.
In addition, the Senate version of HR 5576 includes $5.675 billion for Project-Based Rental Assistance (project-based contracts, i.e. rent subsidies tied to specific housing units, as opposed to portable tenant-based vouchers). This is $638.3 million above current year levels. This fully funds all contracts including inflation and expands the use of inspectors to ensure that tenants live in decent affordable housing.
Homeless Funds Increased
The Senate bill also boosts funding for programs under the McKinney-Vento Homeless Assistance Act by $184.6 million over current levels, increasing funding to $1.511 billion. Homeless assistance funding is one of the few programs at HUD where the Bush Administration asked for an increase for FY 2007 – proposing to boost funds by $209 million (the House bill includes this increase). NAMI strongly supported this increased funding for homeless programs. This includes funding for permanent housing programs such as Shelter Plus Care (S+C) and SHP, as well as renewal of expiring rent subsidies. The Senate bill specifically includes $285 million for renewal of all expiring S+C rent subsidies. In addition, under both the House and Senate bills HUD would be required to continue directing a minimum of 30% of McKinney-Vento funds for permanent housing, with a 25% local match required for services.
Senate Passes Bill Allowing Students With Disabilities to Receive Housing Assistance
On July 18, the Senate cleared legislation that would allow students with disabilities to more easily qualify for Section 8 rental assistance. The House passed the bill on June 13, clearing the way for the legislation to go to the White House where the President is expected to sign it into law.
The bill corrects an oversight in separate legislation passed by Congress last year meant to clamp down on certain unqualified students that had been receiving Section 8 rental assistance. The bill (HR 5117), sponsored by Representative Deborah Pryce (R-OH) and Senator Mike DeWine (R-OH), would allow certain students with disabilities to re-qualify for Section 8 without having their family’s income and resources imputed to them.
This would be especially important to individuals with mental illness whose education was interrupted year earlier by the course of their illness and later seek educational opportunities and need access to affordable housing. HR 5117 would allow those who were receiving vouchers as of November 2005 – and were disqualified by the change Congress enacted last year – to immediately re-qualify for Section 8 assistance.