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AFSCME Public Housing Authority Update

1/8/2007

Fiscal Year (FY) 07 Funding Levels:

As 2006 ended, Congress enacted a Continuing Resolution (CR), which funds most domestic discretionary programs, including public housing, until February 15, 2007. Unfortunately, Congress froze FY07 operating funding for Public Housing Authorities (PHAs). After adjusting for inflation, this is a cut. Worse, Congress actually cut the Public Housing Capital Fund. Before the CR expires on February 15, Congressional leaders intend to pass a new CR, which would fund all these programs throughout fiscal year 2007, which ends October 31.

AFSCME and public housing advocates are working with the new Congress to ensure the FY07 CR increases funds for Public Housing. Although Democratic leaders hope to fix extraordinary funding shortfalls in the CR, they have massive budget problems to address and face Republican opposition, so may have a tough time finding the resources to adequately fund PHAs.

Implementation of New Funding Formula and Asset Management:

In September 2005 HUD revised its rules for the Public Housing Operating Fund. HUD's revised formula increases funding for some PHAs and decreases it for others - creating PHA "winners" and "losers". To ease the impact of the cuts on PHA "losers", HUD was planning to cap the cut ("stop loss") at 24% of the difference between the old and new funding levels for the federal fiscal year (FFY) 2007. For future years, the "stop loss" gets smaller and it will end in 2012. At that point PHAs will have to absorb 100% of the cut.

HUD also required all but the smallest PHAs to convert to "asset management". In order to qualify for "stop loss", a PHA must submit to HUD a "stop loss request" and an "Asset Management Plan" by April 15, 2007. HUD can approve or deny each submission.

For more information on the 2005 rule, see Public Housing Authority Operations and Funding.

Good News for PHAs? HUD proposes 2 rules to reduce cuts and extend deadlines

On November 24, 2006 HUD issued two new proposed regulations that would (1) cap 2007 budget cuts to "loser" PHAs at 5% instead of 24% and (2) extend HUD's deadlines for those PHAs to submit their "stop-loss" request and "Asset Management Plan".

The first proposed rule (Docket No. FR-5105-P-01 - 71 FR 68408) was designed to take into account PHAs' recent high energy costs.

The second proposed rule (Docket No. FR-5108-P-01 - 71 FR 68404) would extend the deadline for submission of "stop loss" applications from April 15 to Oct. 1, 2007. HUD's proposed rule would also delay future annual deadlines by one year. It was designed to give PHAs time to make the major conversion.

The public comment period on HUD's proposed rule closes January 23, 2007. AFSCME will submit comments.

Bad News for PHA's? HUD "clarifies" its proposed rule

In December, HUD issued a clarification to the Proposed Rule (71 FR 68404) that would extend PHAs' "stop-loss" application deadline from April 15 to October 1, 2007. Specifically, HUD posted a notice on its website (see: http://www.hud.gov/offices/pih/programs/ph/am/stoploss.cfm) stating that the proposed rule "does not address, and would not revise, the April 15, 2007, deadline for submission of stop-loss application (emphasis added)... the Department wishes to clarify that the first-year deadline for stop-loss applications of April 15, 2007 announced in PIH Notice 2006-14 (issued on September 12, 2006) has not changed." HUD has not yet given a rationale for its reversal of this proposed rule. AFSCME and public housing advocates are working with Congress and HUD to understand and respond to these recent actions.

AFSCME works to include pro-PHA policies in FY07 Appropriations Bill (Continuing Resolution)

AFSCME continues to urge Congress to enact Section 325 and Section 324 of the Senate HUD Appropriations Subcommittee legislation, H.R. 5576, which was passed by the Senate Appropriations Committee. Section 325 would extend the first "stop-loss" submission deadline from April 15 to October 1, 2007. Section 324 would continue to permit PHAs to use a small percentage of their Public Housing Capital Funds for operations.

What AFSCME members can do

Contact your Senators and Representatives and urge them to increase funding for public housing and to enact Section 324 and 325 of the Senate HUD appropriations bill (HR 5576).

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