On Wednesday, January 17, Funders Together hosted a webinar with our national partners around what’s been happening with policy and budget issues at the federal level.
Joined by experts Steve Berg, National Alliance to End Homelessness, Kathryn Monet, National Coalition for Homeless Veterans, Douglas Rice, Center on Budget and Policy Priorities, and Diane Yentel, National Low Income Housing Coalition, we discussed the budget and tax reform and how philanthropy can keep ending homelessness as a priority, as well as an additional focus on veterans and the state of VASH (Veterans Affairs Supporting Housing) vouchers.
Six things funders should about federal policy as we kick off 2018:
- The new tax law is very likely to worsen inequality over the long term. This piece of legislation will have substantial effects on low-income families as it strongly favors wealthy households and corporations. By 2027, household taxes will rise while corporations will see tax cuts of nearly $50 billion.
- This new tax reform law will increase the projected budget deficits over the next decade by $1.8 trillion, but could be worse if Congress extends the tax cuts for wealthy households and corporations. An increase in the deficit will create additional pressure to reduce spending to address the budget over the long term, which means programs that aid low- and moderate-income families are at risk.
- The corporate tax rate reduction will impact the affordable housing market through the Low Income Housing Tax Credit. Because of the lower corporate tax rate, private companies will have a less incentive to invest in these credits that can lower their tax liability, meaning there is less money available to build and preserve affordable housing. It is estimated that this would result in over 230,000 less affordable homes over the next ten years.
- The National Housing Trust Fund may be at risk due to the reduced corporate tax rate. The new lower corporate tax rate reduces the value of tax deferred assets at Fannie Mae and Freddie Mac making it difficult to pay their tax bills and will likely be in need of an advance from the treasury. When they need this advance, there is high risk of contributions to the NHTF being suspended.
- There is still no FY2018 budget for HUD programs. However, there is a need to increase funding levels for HUD programs to ensure services are adequately funded. Increasing the HUD Homeless Assistance budget from $2.383 billion to $2.6 billion would mean 40,000 additional people experiencing homelessness would be housed.
- Veterans’ Affairs is in the process of seeking input from its stakeholders regarding restructuring the funding for the Veterans Affairs Supporting Housing (VASH) voucher program. Last year, the VA decided to move funding for the VASH vouchers from the special project category into the general fund which means they could be used for other purposes, thus significantly impacting case management and supportive services. There was great concern and outcry regarding this decision, so the restructuring has been put on hold while the department seeks feedback. Funders who are invested in veterans and housing have an opportunity to reach out and express concern about this restructuring.
Also worth noting are the recent disaster housing recovery developments due to impacts from last year’s Hurricanes Harvey, Irma, and Maria as well as the wildfires in California. The National Low Income Housing Coalition has been leading a coalition advocating to secure the proper equitable resources.
What can philanthropy do?
- Educate and elevate. Now is the time to make sure your members of Congress know how the HUD homelessness and VA programs work and how important federal funding is to the community you are in. Elevate the priority of addressing homelessness and keep it at the forefront of the lawmakers’ minds as they are thinking about policy issues that affect low-income individuals and families.
- Use Your Voice. As budget talks are underway, remind Congress that if there are additional resources that are freed up with a new budget deal, that these funds can be used efficiently and effectively for services and programs that address homelessness and housing issues.
- Lift up public-private partnerships. Let your policymakers know what you are thinking about as someone who is investing locally in your community. Talk about what your priorities are, reinforce the idea of the importance of public-private partnerships, and that you need the federal investment to continue to do your work well and effectively. This can be done by convening meetings with your grantees and policymakers or writing an op-ed, such as the recent one around youth homelessness penned by Casey Trupin of the Raikes Foundation.
- Ask Funders Together for help! We are here as a resource to help with how to convene meetings with policymakers, what you can do legally, and offer support in writing op-eds and blogs. Always feel free to reach out to us with any questions or ideas you may have!
Check out these additional resources for more information on all things policy related: