Jeff Lubell

In light of recent budget shortfalls and various proposed policy changes, the funding for many government programs is currently in a state of flux. This adds a marked degree of uncertainty to the work of those of us that utilize government funding to provide individuals with supportive services, for example, to help them live independent and productive lives. Operating in a constant state of funding insecurity has unfortunately become a cost of doing business with the government.

While HUD continues to provide funding for the Family Self-Sufficiency (FSS) program, FSS is unfortunately not immune to the uncertainties surrounding present and future funding for a wide variety of government programs. FSS represents a tiny fraction of HUD's budget and often gets overlooked by policymakers focused on larger HUD programs. One recent policy development that has adversely impacted FSS is the imposition of fixed caps on the expenditures of state and local housing voucher programs; while FSS remains an eligible expense under the voucher program, some agencies whose actual costs exceed the caps have suspended enrollment in FSS as a strategy for reducing their per-unit costs. (The actual per-unit cost savings of suspending FSS enrollment is probably much smaller than what many agencies think, but the perception is hard to shake.) A number of agencies have also lost HUD funding for the coordinators that administer FSS - largely due to unanticipated consequences of changes in HUD's annual funding competitions.

The development of a new formula for providing public housing operating funds also raises uncertainty about future funding for public housing FSS programs. Finally, the Administration's proposal to convert the voucher program to a block grant has the potential to significantly undermine the FSS program by forcing housing agencies to make an impossible choice between continuing to fund their FSS programs or providing additional housing assistance.

Are these funding uncertainties any greater than in other government programs? That's hard to say. The good news is that many (but not all) of the problems affecting prior years' funding competitions for FSS coordinator funds appear to have been resolved. Also, while one needs to be continually vigilant, it does not appear that the Flexible Voucher Program is likely to move forward toward enactment this year. Finally, and perhaps most importantly, all of these funding issues are ones for which the commitment of local housing agencies can compensate.

In other words, if a local housing agency is committed to making FSS work, the agency will continue to have the option of using its HUD funds to do so, even under a worst case scenario. As I have pointed out elsewhere, there will always be a need for additional case management resources, as HUD provides only limited support for this activity. But if a partner is willing to provide the necessary case management resources, and the PHA is willing to administer the FSS slots, that partnership should be successful irrespective of the macro funding issues affecting FSS at the national level.

The bottom line for local partnerships around FSS is that if both agencies really want to do it, they can, and the housing agency can utilize its HUD funding for this purpose. Prospective partners should be aware, however, that their local housing authority may have some legitimate concerns about the impact on FSS of recent housing policy and HUD funding changes. Until those uncertainties are resolved, it may be somewhat harder than it should be to convince housing authorities to expand their FSS programs.

There are, of course, lots of good reasons for housing agencies to want to expand their FSS programs: FSS helps families move up and out of HUD-assisted housing, freeing up space for other needy families; FSS helps to promote homeownership among HUD-assisted renters; and FSS yields powerful success stories that generate positive press and recognition. For these and other reasons, some housing agencies are committed to operating robust FSS programs and are likely to welcome contact from partners interested in helping them reach more families.

Funding Update*:

The Transportation-Treasury-HUD bills recently approved by the full House and the Senate Appropriations Committee would each allocate a total of $15.6 billion for tenant-based assistance, over $200 million less than requested by the Bush Administration. Within this amount, the House and Senate bills would provide $14.19 billion and $14.09 billion, respectively, for voucher renewals.

According to estimates from the Center on Budget and Policy Priorities, both levels of funding would be sufficient to restore most of the vouchers lost in 2005, although each would fall short of fully restoring these losses. Specifically, the House voucher funding level would leave about 15,000 vouchers unfunded, while the Senate allocation would fail to restore about 30,000 vouchers.

The Senate version would transfer the renewal of Section 811 vouchers for people with disabilities to the Section 8 voucher account. It is unclear whether the funding is intended to come from the $14.09 billion set aside for renewal of expiring Section 8 vouchers or from the $192 million allocated for "tenant protection" vouchers that provide housing assistance for families that lose other forms of housing assistance. The Senate bill does not provide additional Section 8 resources to fund the Section 811 vouchers, the cost of which was estimated at $80 million in the President's budget.

The full Senate is expected to debate the TT-HUD bill in September, and the House and Senate will go to conference soon thereafter to negotiate a final spending bill for 2006.

* Thanks to the Center on Budget and Policy Priorities, Technical Assistance Collaborative and the Opening Doors project for providing the funding update information.