As it stands for next year’s budget, DC would send mixed signals to moms and dads trying to care for a seriously ill child. Here’s the problem:  the District doesn’t require families dealing with these circumstances to be looking for employment. These kinds of work exemptions are part of the TANF programs in nearly every state. Yet the family’s 60-month time limit clock would continue to run, even though most states stop the clock in these situations.

Last year, the DC Council agreed that these families should receive full benefits and a time limit break by including these protections in the adopted budget. But the Council put the money to make this happen on a contingent revenue list, meaning it would only be funded if additional money was identified by December 2012. This did not happen.

In these last few weeks, the Council’s human services committee was able to identify $4 million to fund some of what was passed last year, including protections for parents dealing with domestic violence, grandparents caring for grandchildren, and parents caring for a child under 12 months. An additional $1.5 million would cover the costs of the rest of the protections that the Council approved last year. For example, parents caring for a family member with a disability would be given the time to provide this care and to prepare for work after this care is no long needed. 

Without a time limit exemption, many families who have received an exemption from work requirements due to personal challenges will experience a steep cut in assistance in October. A family of three will see their benefits reduced to just $257 per month.  

DCFPI urges the Council to identify the additional $1.5 million needed to put these protections into the budget and to better align the time limit so that it only applies when families are able to prepare for work.

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Today, a group of homeless service providers and advocates sent a letter to DC Council Chairman Mendelson and the rest of the Council, urging them to use final budget deliberations to put the District on a path to ending homelessness. There is broad agreement about the goals to focus on: opening access to shelter for families year-round, rather than restricting access to periods of cold weather; minimizing the length of time spent in emergency shelter; and reducing chronic homelessness. The letter highlights steps to address homelessness among families, single individuals, and youth. 

The good news is that steps already are being taken that will help reduce homelessness. Mayor Gray’s budget added funds for youth homeless services, emergency rental assistance, rent subsidies that flow through housing providers, and a program to move families out of shelter quickly. This past week, the DC Council identified additional funds for chronically homeless seniors, homeless LGBTQ youth, emergency rental assistance, and to create a “homelessness czar.” And Councilmembers Mary Cheh and Jim Graham just announced a broad plan to end homelessness. They should be applauded for setting a vision we can aim for. Their plan would be funded by applying the sales tax to online sales, assuming Congress adopts legislation to allow DC and the states to do so.  

But there is more the District can do to make progress now, including in the budget the Council will approve next week.   

Develop New Program Guidelines to Get Homeless Families into Housing Quickly:  A key tool to getting families out of shelter is “rapid re-housing,” under which families are moved into housing quickly and get rental help and services that last from one to two years. This may be enough to get many families back on their feet. The regulations for this program are published but not yet complete, and the program cannot be fully implemented until this is done. 

Expand Supportive Housing for Chronically Homeless residents:  A small share of homeless residents face challenges that can lead to long-term homelessness, such as severe mental illness. DC’s Permanent Supportive Housing program follows the successful “housing first” approach of placing residents into housing and then using that stability to address the challenges that led to homelessness. The plan of the Interagency Council on Homelessness to end chronic homelessness calls for $4.3 million in new funding for Permanent Supportive Housing in FY 2014, but so far the budget includes only $500,000 in new funding. 

Help Families with the High Cost of Rental Housing:  Efforts to reduce homelessness in the long-term must address the wide gap between low-wage work in DC and the very high costs of housing. A parent currently needs to earn $29 an hour to afford a decent two-bedroom apartment in DC, but nearly half of DC jobs pay less than that. DC’s Local Rent Supplement Program (LRSP) provides rent subsidies to either for-profit or non-profit developers to help make units affordable to low-income families or directly to families so they can afford the rent in private market housing.  There are no new funds for the tenant-based side of LRSP, which goes directly to families, in the proposed budget. This side of LRSP is critical because the housing assistance can be deployed quickly and help address some of DC’s immediate affordable housing needs. 

Keep More Residents From Losing Their Homes.  DC’s Emergency Rental Assistance program (ERAP) for families facing eviction should be modified to ensure it is targeting those most at risk and to better connect residents to services. Additionally under the current program, individuals without children are eligible only if they are seniors or have a disability. DC could pilot an ERAP expansion to cover low-income singles who are not elderly and without a disability but are at risk for homelessness.  

Coming together as a city to end family homelessness is something we should all rally around. It is time for the DC Council and Mayor Gray to start putting the pieces in place to make it a reality.  

The sign- on letter can be found here. 

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That legislation, which was approved but not funded late last year, is known as Schedule H. It is a property tax credit that helps low-and-moderate income residents who pay a large percentage of their income on property taxes or have substantial rent burdens, such as seniors on a fixed-income. 

This past December, the DC Council took an important step toward making this credit reach more residents who need it — they raised the maximum income from $20,000 to $50,000; raised the maximum tax credit from $750 to $1,000; increased the property tax equivalent for renters from 15 percent of rent paid to 20 percent of rent paid; and simplified complex rules that make it difficult for people sharing housing to qualify. 

There was only one problem with what the Council did:  they didn’t fund it! Instead, they passed the legislation “subject to appropriation,” meaning that they didn’t put dollars behind these great policy changes. 

So as the budget deliberations come to an end, the Council can accomplish tax relief for seniors by funding Schedule H. It will not only help the older generation of DC residents, but some of their children and grandchildren, too. In fact, once all of the changes to the property tax credit are phased in, it is estimated to reach a maximum of 125,000 residents across the city. 

By funding reforms to DC’s Schedule H property tax credit, the DC Council can direct resources towards those residents, both seniors and otherwise, who are most impacted by property taxes.

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There’s several reasons to support full local funding this program, known as Interim Disability Assistance (IDA): it is humane, it is cost effective, and it is effective. IDA helps residents who are applying for federal assistance known as SSI, but who have not yet qualified for the program. 

Unfortunately, the Council has not focused on these important points. IDA is a worthwhile allocation of our tax dollars for these reasons: 

The SSI application process is not easy. Nationally, just one-third of SSI applicants are approved based on their initial application. The fact that DC’s success rate with getting IDA recipients on SSI is less than 100 percent reflects this difficulty, rather than an ineffective program. Applicants must complete a long written application, submit medical and vocational documentation, and often undergo special medical and psychological evaluations. The success rate increases when applicants receive outside help, such as the services of a pro-bono attorney. Many only receive benefits after completing a lengthy appeal process. 

The IDA recovery rate meets national standards. If the IDA recipient is approved for SSI, the federal government reimburses the District for 100 percent of IDA benefits. Right now, the District recovers approximately 40 percent of local funding through SSI reimbursement—in line with the national average and the Chief Financial Officer’s original estimates. The recovery rate is 40 percent because the application process is complicated. 

Program investments can make IDA even better. Currently, DC offers no application help to SSI applicants, despite the difficulty of the application process. Providing application assistance to SSI applicants can lead to quicker determinations and higher acceptance rates. Quicker determinations will reduce the number of months a recipient receives IDA, and higher acceptance rates will increase the amount of federal reimbursement the District receives. The mayor’s proposed FY 2014 budget includes $1 million to provide this assistance, but it is on the revenue contingency list rather than being actually funded. 

IDA is a humane way to help some residents with disabilities who cannot work. These residents are in limbo — they are unable to work and waiting to be approved for federal benefits, which can take a year or two, if not longer. IDA provides humane financial assistance during this period, helping residents meet basic needs, such as rent (often shared with others), prescriptions, and necessities like toothpaste. 

Without IDA, residents must rely on crisis services, costing the District government more. Lacking any income, these residents are unable to access the regular medical care they need. Instead they rely on DC’s emergency medical services, which leads to poorer health outcomes, a greater strain on our 911 system, and a greater cost to our government. Residents can also end up homeless. Without any financial assistance, these residents cannot qualify for many affordable housing programs because they require residents to have at least some monthly income. With IDA, residents can access these programs and move out of the emergency shelter system. 

IDA is a good investment in the well-being of residents with disabilities and for the city as a whole.

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Last week, District Dime readers, was a busy week for the Council as DC’s budget process marches forward.  The DC Council approved a supplemental budget for the current fiscal year – FY 2013 –and each Council committee held mark-up hearings to make changes to the proposed fiscal year 2014 budgets for several agencies.  The marked-up budgets now move forward to the full Council for consideration.   

Here is a run-down of some of the major changes that happened during the committee mark-ups, as well as summary of the changes made in the supplemental budget:  

Committee on Health:  Funding for the Department of Health (DOH) increased by $600,000, including $500,000 to increase efforts to manage and prevent chronic illness.  The remaining $100,000 will support efforts to increase farmers’ markets in areas of the city deemed to be food deserts.  In addition, the Committee also included language to monitor the recertification process for Alliance patients.  DCFPI and others have raised concerns about the process and adequate staffing.   

Committee on Workforce & Community Affairs: The Committee received transfers from several other committees that will help support increases in various programs, including $800,000 for the Office on Aging to support additional staff, social workers and grant funds; nearly $670,000 for the Washington Elderly and Handicapped Transportation Service; and $300,000 to the Department of Employment Services to revise an instructional programs that works to provide long-term support to people in apprenticeship programs. 

Committee on Education:  The Committee identified funds to stabilize DC Public Schools (DCPS) that face more than a 5 percent decrease in their individual budget from FY 13 to FY 14; to restore full-time librarians for DCPS schools that faced a cut due to being re-defined as a “small” school. ;to support the Public Charter School Board  to create a liaison focused on education planning and coordination for charter schools; and  to re-establish the Office of Ombudsman for Public Education within the State Board of Education. 

Committee on Economic Development:  The most notable change the Committee made was to re-establish the Neighborhood Investment Fund (NIF), which supports various affordable housing, job training, small businesses and economic development initiatives within targeted neighborhoods.  The Committee re-established the fund with $10 million—including $5 million from the Committee on Transportation and $5 million that will come from shifting $5 million of Housing Production Trust fund dollars that have been allocated to the Lead Safe Program. 

The Committee also included new reporting requirements for the New Communities Program that will help the public track the progress of the program, and it removed language from the Budget Support Act that would have changed how Local Rent Supplement vouchers are awarded.  The Committee also included language that will require LRSP vouchers to be reissued when families leave the program as well as a recommendation that half of the funds spent on the single-family rehab program be made available for seniors. 

Committee on Human Services: The Committee identified more than $4 million to fund time-limit exemptions for families who are experiencing domestic violence, who have a child under 12 months, or who are headed by someone who is elderly.  The Committee also received transfers from the Committee on Transportation and the Environment to add $500,000 to the Interim Disability Assistance Program; and $486,000 each to the Permanent Supportive Housing program to help fund housing assistance for elderly chronically homeless residents and for assistance for LGBTQ homeless youth.  

The Committee removed proposed changes to the Homeless Services Reform Act and suggested that they instead go through the normal legislative process to allow time for sufficient public input.  Separate legislation has already been introduced and a hearing set for June 3^rd.  

Fiscal Year 2013 Supplemental 

Last week, the DC Council voted on a supplemental budget for FY 2013.  District Dime readers may recall that back in February, DC’s Chief Financial Officer announced a $190 million boost in revenue for FY 2013.  Mayor Gray submitted his proposal for how to spend those dollars along with the FY 2014 budget.  The proposal passed largely as proposed, with a few amendments by the DC Council.  The funds will largely be used for: 

• Pay raises for DC government employees: $24 million
• Increase for the Housing Production Trust Fund: $63-$67 million
• Repeal out-of-state bonds and various tax abatements: $4.4 million 

The remaining balance, $96 million, was carried forward into fiscal year 2014 to help fund a number of increases to programs and services that year. 

The most notable of the changes the Council made to the Mayor’s proposal was to use $4 million from the Housing Production Trust Fund to fund an expansion of summer school in fiscal year 2013.  The funds from the HPTF are expected to be paid by the end of the fiscal year from additional revenues collected from parking tax and meters, although there is no guarantee this will happen.  

Check back at the end of the week when DCFPI’s budget toolkit will be updated to reflect mark-up changes. 

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The Council found the money to strengthen summer school by taking funds from one of the city’s best housing programs, with a plan that is expected — but not guaranteed — to restore the housing funds later in the year. It is unfortunate that efforts to fund a critical education program could put funding for another important program at risk.    

There’s a reason summer school should be a funding priority. Though many students look forward to having the summer off, research shows this time can be valuable to youngsters who are academically behind. With the right blend of programs, DC students can benefit from summer school offerings by catching up in key academic subjects and preventing “summer learning loss” from one grade to the next.  

DC Public Schools offers a range of summer school programming, including services for students in kindergarten through 12^th grade and a “summer bridge” program for rising 9^th graders. Over 6,000 children and youth were served last summer. This year, however, DCPS changed its K-8 summer school policy to serve students on an invitation-only basis. This meant that only about 2,700 students who were identified as high priority, or considered most likely to benefit from five weeks of summer school programming, were to be offered a DCPS K-8 slot this summer. 

While DCFPI supports the investment in summer school, the funding method is not ideal. The move to fund summer school took $4 million out of the city’s Housing Production Trust Fund, which supports the construction and rehabilitation of affordable housing. There is a plan to restore funds to the Trust Fund at the end of the fiscal year, using revenues for the Washington Metro Transit Authority that are projected to be higher than what is needed. But, it is uncertain at this point that resources will be sufficient to do this. 

In the short-term, we hope the DC Council will ensure that the $4 million in funds are paid back into the Housing Production Trust Fund at the end of this fiscal year. This situation also raises questions of whether DCPS funding is adequate to offer both a robust school-year program and a summer program to all students who need additional support. This is something the DC public education adequacy study, currently underway, will hopefully address.

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On Monday, May 13th, the Committee on Health will hear public testimony on how to create the insurance market known as the health exchange, as well as new District-specific consumer protections that aim to make health care more accessible.   

Under the legislation, all plans sold to District residents and small business must be sold through the exchange’s online shopping portal by no later than 2016. The exchange’s unified market ensures that District residents will receive the standard of health benefits intended in the President Obama’s health reform law and reinforces the District’s status as a national leader in providing quality health coverage to all of its residents. 

Why have one unified market? A smaller jurisdiction like the District needs one big pool for individual residents and small businesses so that they can achieve the same purchasing power as larger employers — putting downward pressure on prices and expanding health plan choices. 

The bill will also add transparency to the DC health insurance market. By placing all health plan prices, benefits, provider networks, and quality ratings side-by-side in an easy-to-compare format, the exchange portal forces insurers to compete on quality and pricing, and helps the District government monitor and enforce consumer protections. These protections include unlimited mental health services and clearer reporting on the number and types of doctors in a health plan’s network. 

The unified market proposal also promotes and expands consumer choice, allowing insurers to sell as many plans as they would like and helping residents connect with any plan available in the individual market. Small employers will have similar, if not more, options than they do today, and can expand choice even further by allowing their employees to choose from a wider range of offerings.   

The public roundtable on the proposal will occur on Monday, May 13^th at 11 a.m. in Room 123 of the Wilson Building (1350 Pennsylvania Avenue NW). To testify on the proposal, please contact Melanie Williamson (mwilliamson@dccouncil.us).

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One of those programs is DC’s tenant-based portion of the local rent supplement program.  There are no funds in the proposed FY 2014 budget to expand this program, but the Council should find ways to do so when it completes work on next year’s budget. 

The Local Rent Supplement Program (LRSP) was created in 2007 to make homes affordable to families with very low-incomes — 30 percent of area median income or less, or roughly $32,000 for a family of four.  It does this by providing rental assistance to bridge the gap between market rents and the rents that very low income families can afford to pay.  LRSP was created in large part to address the limited and declining federal support for housing vouchers.  

The program has three components; a tenant-based portion and a project-based and sponsor-based portion.  Under project- and sponsor-based LRSP, subsidies are tied to specific housing units operated by a for-profit or non-profit developer or to a non-profit developer that commits to using the subsidy to provide affordable housing to its clients.  Most of the subsidies go to newly built or renovated housing.  The mayor’s proposed budget includes a $5 million increase to this portion of the program.  

The tenant-based portion of the program goes to an individual family who can take the LRSP voucher and use it at any DC apartment that is under the fair market rent.  Because it is not tied to production, tenant-based LRSP can be deployed quickly.  

The tenant based portion of the program has been criticized as being more costly than the project-sponsor based side, when the costs per program are broken out by bedroom size, there is little  variance between the two programs (see Table 1). Tenant-based LRSP tends to serve larger families – 80 percent are two-bedroom units are larger, while 80 percent of the project/sponsor-based units serve residents that need one-bedroom units or efficiencies.

The program has also been criticized as creating long-term dependency on housing aid, yet this largely reflects the great mismatch between incomes and housing costs for residents living on low-wage work or public benefits — such as social security, disability income, or public assistance. In DC, a single-parent family with two children would need to work full time, year round and earn $28.96 to afford the market rate rent for a two bedroom apartment.  This is just under the median wage, or middle wage, for all jobs in DC which was $29.41 in 2011.  That means close to half of all jobs in DC do not pay enough for someone to afford the market-rate rent for a two bedroom apartment and suggests that efforts to help low-income families improve their incomes is key to housing mobility. 

Tenant-based LRSP helps ensure DC is able to serve the wide variety of families that need affordable housing assistance — from residents with severe barriers to stable housing to residents who simply don’t earn enough from their low-wage job.  For this reason, the DC budget needs to include increases for both tenant-based and project/sponsor-based LRSP. 

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Newly available data provide stark evidence that tax-exempt bonds serve primarily as a tax shelter for very high-income DC residents, many of whom earn millions each year from these tax-free investments. However, the data also show that a small number of residents, with much more modest incomes, rely on municipal bonds as a major source of income. This suggests that it makes sense for the District to continue phasing out the out-of-state bond tax break — one that no other jurisdiction offers — while taking steps to make sure that low- and moderate-income families are protected. 

Here is what the new figures, from DC’s Office of Tax and Revenue, show:  Over three-fourths of tax-exempt interest income earned by DC residents goes to households who have income of $200,000 or more beyondwhat they earn from tax-exempt bonds. Indeed, 81 DC households earned an average of $2 million from tax-exempt interest in 2010, and these 81 households accounted for 43 percent of all tax-exempt interest earned in the city.  

At the same time, there are 338 households that have income below $50,000 and get more than one-third of their income from tax-exempt interest. These are likely to be the households that policymakers have in mind when they talk about restoring the out-of-state bonds tax break. 

Together, this suggests that DC’s current policy — which maintains a tax exemption for all investments in out-of-state bonds made prior to 2013 and eliminates the tax break for new investments— should be continued. It would raise roughly $1.7 million in revenue in 2014 and ultimately about $30 million per year. The current law maintains a tax break for investments in DC-issued bonds, which creates an incentive to buy these bonds, which, in turn, makes it easier and cheaper for the city to issue bonds. 

What about low- and moderate-income residents who rely on out-of-state bonds? The grandfathering of current tax exemptions provides time for these households to plan and adjust. Some will start investing in DC bonds, and others will seek other investment options, such as highly rated corporate bonds that yield similar after-tax returns. To further protect these residents, the District could allow households below a certain income level — such as $75,000 or $100,000 — to retain the tax break fully. 

A concern about protecting retirees who rely on out-of-state bonds makes sense. But, using that argument to protect a tax shelter for multi-millionaires does not.

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On the proposed amendments to the Homeless Service Reform Act: 

• The proposed amendments to the Homeless Services Reform Act should be removed from the BSA and introduced as separate legislation.  These amendments would make significant changes to a law that impacts some of the District’s most vulnerable residents.  The changes have raised significant concerns and deserve careful consideration and stakeholder input that is allowed through the normal legislative process.  The proposed amendments have no fiscal impact and therefore do not need to be passed with the budget. 
• DCFPI strongly supports the goals of the Department of Human Services to both minimize the stay for families in emergency shelter and to open shelter to families year-round.  We encourage the Council to introduce and adopt the legislation that will be by the start of FY 2014.  Yet this is just one of the steps necessary to achieve the dual goals of shortening stays in shelter and opening it up families year-round.  In addition, investments in the permanent supportive housing and tenant-based side of the local rent supplement program as well as finalizing regulations for the rapid re-housing program are needed.  

On the reinstatement of the tax break for out-of-state bonds: 

• DCFPI supports maintaining the exemption for investments made prior to 2013 and phasing out the tax break on new investments.   Repealing the tax break on out-of-state bonds creates an incentive to purchase DC bonds, which helps reduce the interest rate the District pays on its debt.  DC’s CFO found that the number of DC buyers of DC bonds increased dramatically in 2012 after legislation to phase out the tax break was passed. 
• Most of the benefits of the tax break go to investors with substantial incomes; to protect low-income retirees, the tax break can be maintained for low- and moderate-income residents.  Three quarters of the interest earned on out-of-state bonds goes to residents with $200,000 or more in income beyond what they get from tax-exempt interest.  

It is important to note that the FY 2014 budget includes several proposals to help retirees in need that are not funded.  This includes $5.8 million through the Office of Aging to fund services for older residents, and $5 million to implement reforms to the Schedule H tax credit, which offsets property taxes when they consume a large share of a household’s income.  

Our full testimony on the proposed amendments to the Homeless Services Reform Act is here and the testimony on out-of-state bonds is here . And don’t forget to check out DCFPI’s analysis of the proposed FY 2014 budget for homeless services in our homeless services toolkit here and all revenue changes in the FY 2014 budget in our revenue toolkit!

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