For the first time in years, economic forecasters believe Florida might have a surplus instead of a deficit as it prepares its annual budget, so the time is ripe for lawmakers to end the dishonest practice of diverting funds from specific accounts for use in general revenue.
Florida, like the federal government and most states, has established special funding accounts, replenished annually with revenue from taxpayers. The funds are supposed to be used for specific purposes, like the state’s Sadowski Trust Fund for affordable housing programs.
It should not be news to anyone that the Great Recession has hurt home ownership throughout Florida. But lawmakers have disregarded this vital need and chosen instead to sack the housing fund in order to avoid raising new revenue or killing some of their own pet programs, relying on the excuse of a budget deficit with holes that need to be plugged. Under Gov. Rick Scott supplying tax breaks to business has taken precedence over protecting the integrity of the Sadowski fund.
The need to make up for insufficient revenue was never a good reason for diverting funds from special accounts, however, because it is not an honest way to balance the budget.
The Sadowski fund was established for a good reason back in 1992: to improve housing for the people of Florida. It was never meant to be a piggy bank for legislators to raid every time they can’t balance the budget, but that’s what it’s been used for the last four years, depriving Florida’s deteriorating housing market of hundreds of millions of dollars.
By law, 70 percent of the funding is provided to local governments in all 67 Florida counties to improve housing. This money can be used for rehabilitation of existing empty housing, or to provide down payments and closing costs assistance to families in need.
The other 30 percent is designated for improving existing apartments in dire need of repair. These are apartments that house Florida’s most vulnerable populations, such as the elderly and persons with disabilities who might otherwise be housed in institutions.
The estimated appropriation for fiscal year 2013-2014 amounts to $204 million, which includes $140 for local housing programs. For Miami-Dade County, that means $7.8 million, plus millions more for cities like Hialeah, Miami Gardens and several others. For Broward County and a number of municipalities, it means some $12 million.
This year, legislators don’t have the excuse of a looming budget deficit, but there’s another threat to the Sadowski money. This trick is a kind of legislative bait and switch that lets lawmakers sweep Sadowski funds into general revenue under the guise of using a windfall to cover their actions.
The windfall comes from a settlement obtained by Attorney General Pam Bondi and her counterparts across the nation with mortgage banks involving abuses and unfair practices in lending. The discretionary amount for Florida comes to $334 million or so. Attorney General Bondi did a good job of getting the Legislature to agree that it would use the funds for housing.
But let’s be clear: The money should be used to supplement existing housing programs, not as an excuse to once again raid the Sadowski fund and use the settlement funds for other things.
The trust fund was created to invest in Floridians’ housing needs and create jobs, too. It’s a win-win. Raiding the fund cheats taxpayers and kills jobs.