Arizona’s Housing Trust Fund targeted for cuts

Fund sweeps are now being discussed by Arizona legislators and a sweep of Arizona’s Housing Trust Fund is being seriously considered.  According to advocates for the HTF, Republicans and Democrats are looking at some sort of large hit, beyond what the Governor has proposed ($6.5 million in FY08).  Republicans want to sweep near the full $55 million and Democrats are looking at some sort of alternate option beyond the Governor’s proposal, which would still have a great impact on the HTF.  Either option would be detrimental to the future of the HTF over the next two years.

Calls or e-mails to legislative leadership (Republican and Democrat) would be helpful. Legislators need to be able to put a face to these funds.  Explain how the HTF has helped a legislator’s district would be very helpful…as would how a cut might hurt their district. Points to reiterate with legislators include:

  • A $55.5 million sweep would freeze any new HTF commitments for the rest of this fiscal year, all of FY2009, and would severely cut into the program’s funding for FY2010.
  • A $55 million cut — which is an amount equal to half of the agency’s budget — would directly affect over 25,000 low and moderate Arizonans through the loss of housing programs and services.
  • The Arizona Housing Finance Authority, which relies on support from the HTF, will not be able to issue $64 million in mortgage revenue bonds already planned for this coming calendar year.  This translates into over 500 first time homebuyers who will not be assisted into homeownership at a time when assistance in this arena is critical to putting homeowners back into vacant homes.
  • Mortgage foreclosure counseling — which is so crucial a need right now — will stop.
  • The neediest populations in Arizona — victims of domestic violence and our homeless populations — will be severely underserved and in most cases requests for assistance to keep shelters open and operating will have to be denied.
  • There will no funds available for any new shelter development.
  • Eviction and foreclosure prevention, which assists over 6,000 households annually from becoming homeless, will cease, which will ultimately cost the State untold millions through the Department of Economic Security as persons seek assistance through this agency.
  • Development of new affordable rental and homeownership units for the neediest populations will grind to an abrupt halt.
  • The economic impact on the loss of $55 million in HTF should not be overlooked. Such a sweep would result in a total economic loss of almost $270 million (REMI economic analysis) to the state, including: 3,600 jobs will be lost or not created, over $91 million in wages and salaries will be lost, and over $18 million in state and local tax revenues will not be generated.

For more information, contact Teresa Brice, Executive Director, LISC/Phoenix.

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