HUD May Have Solution to Voucher Cuts

by GENARO C. ARMAS The Associated Press May 19, 2004

WASHINGTON (AP) - Federal housing officials said Tuesday they have found a solution to help public housing agencies cope with budget cuts to a government program that helps 2 million families pay the rent.

The cuts to the Section 8 voucher program angered some congressional Democrats and Republicans, housing authorities and advocates for the poor who warned that thousands of financially strapped families would be forced to pay more of their own money or lose their apartments.

The announcement Tuesday from the Housing and Urban Development Department included no additional money for the $14.5 billion voucher program. HUD said a revision to the program's complicated funding formula, however, would allow cash-poor housing authorities to receive additional money now instead of later in the year.

It was unclear how the change would affect local agency budgets in the future.

``We are trying to apply the cap (to Section 8 funds) in a fair and equitable fashion, and we believe this plan of action achieves just that,'' HUD Secretary Alphonso Jackson said in a statement.

Jackson was in New Orleans on Tuesday to speak to officials with the Public Housing Authorities Directors Association during their annual convention. Jackson is to testify Thursday before the House Financial Services Committee.

Opponents noted the announcement still didn't head off budget cuts. Kay Gibbs, spokeswoman for committee Democrats, said HUD's announcement should have come much earlier in the year, and the delay ``precipitated panic and confusion'' that damaged the program.

Many housing agencies were caught off guard, they say, because they were not given details of the cuts until late April, even though the budget has been in effect since President Bush signed it into law in January.

``This is a little help for some authorities for a short time,'' Gibbs said.

HUD also said it was looking into including unused money from the 2003 budget in a reserve pool that local agencies could use to help defray costs. An announcement was scheduled on that in the next several days.

The adjustments still fall within congressional guidelines for streamlining escalating costs, HUD said. Some Republicans noted that Congress approved a 14-percent increase in the program's budget even with the cuts.

Democrats and housing authorities disputed the Bush administration's reading of language in the budget that recommended agencies be reimbursed for vouchers based on August 1, 2003, costs, plus an annual inflation adjustment to cover 2004.

HUD's announcement Tuesday tweaked the portion of the formula dealing with the inflation factor to allow authorities to get more money now.

Critics said the government should update voucher costs every three months, as was the case last year, to reflect more accurately the cost-of-living increases for rent and utilities.

The Section 8 program, started in 1976, mainly helps families that make less than 50 percent of an area's median income, although exemptions can be made for the elderly and disabled.

People apply for vouchers through their local public housing agency, and recipients can use the money to rent private housing. Typically, recipients pay no more than 30 percent of their monthly income in rent, with vouchers covering the rest.

Source: Associated Press