TALLAHASSEE, FL - Proposals to raid an affordable housing trust fund to help cover a $2.3 billion budget shortfall are prompting concerns about further roiling the battered construction market and cutting off help for Floridians who have lost their homes. House and Senate plans would use tens of millions of dollars from the trust fund to fight the shortfall in the $66 billion budget for the current spending year, which ends June 30. The House would reclaim far more of the money than the Senate and, some lawmakers and builders worry, cancel projects already in the pipeline.
"There's going to be a lot of affordable housing that will not be built," said Todd Fabbri with the Richman Group of Florida. The worst-case scenario, Fabbri said, would be the cancellation of some projects for which tax-exempt bonds have already been sold, sparking defaults and potentially hammering the credit rating of the state or its housing financing arm. Supporters say the state should avoid adding to a housing glut in a time of tight credit markets caused by the subprime mortgage crisis. "We don't need to be building a lot of new things when there's an inventory out there," said Rep. Richard Glorioso , R-Plant City.
Rep. Audrey Gibson, D-Jacksonville, questioned the wisdom of potentially curtailing the construction of rental properties at the same time that foreclosures are spiking. "If we're not going to build any affordable housing and people are losing their homes" she asked, "where are they going to go? Gibson said the fallout could be felt for years. It takes about two years for builders to finish a project, she said, meaning that any cancelled or delayed projects wouldn't be finished for four years or more. And there are ripple effects throughout the economy. "When you lose that (construction) money, you also lose the spin-off from the utilization of that money," Gibson said.
The House is open to preserving projects that are in the works and could create jobs, said Rep. David Rivera, a Miami Republican who chairs one of the chamber's main budget councils. He said lawmakers asked the Florida Housing Finance Corporation to provide more information on where certain projects were in the process. "I think that will drive the ultimate consensus that is reached between the House and Senate," Rivera said.
Affordable housing is just one of the targets lawmakers are considering as they work to plug the budget gap. Legislators are also raiding other trust funds, and plan on cutting nearly $500 million for education. In an afternoon session to prepare measures for action today , House Democrats peppered GOP lawmakers with questions about cuts to education, health care and support for the state's tourism industry. Republicans responded that they were simply trying to be responsible stewards of the state's fiscal affairs in the face of a deepening budget crisis.
"These are not reductions that any of us want to make," said Rep. Anitere Flores , R-Miami, who chairs the committee responsible for education funding. "If we could all vote 'no,' we would. But that is not our responsibility."
Democrats and other advocates have said the state should instead look for ways of raising additional revenue, possibly by eliminating some tax exemptions. But Republicans have countered that an economic downturn is perhaps the worst time to increase taxes. Both the House and Senate are expected to give final approval to their blueprints today before beginning negotiations this weekend.
Source: Jacksonville.com