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2/27/04 - St. Petersburg Times

Bush: No promises for housing funds

The governor wants to end guaranteed funding for affordable housing programs and make them compete for state cash.

By Joni James

TALLAHASSEE - Gov. Jeb Bush is quietly laying the groundwork to end guaranteed state funding for affordable housing programs.

The effort marks the second year in a row Bush has launched a campaign against dedicating a portion of real estate taxes to low-income housing.

Last year's effort failed, but the governor has a better chance of succeeding this year because lawmakers must pass new legislation to keep the program alive. That makes the program vulnerable to a veto.

The news surprised affordable housing supporters, who include homebuilders, banks, local governments, church groups and social-service advocates. They helped kill Bush's proposal last year.

A special committee appointed by House Speaker Johnnie Byrd issued a report three weeks ago showing resounding public support for the program, suggesting the House would concur with the Senate to continue it. Byrd sided with Bush last year.

The affordable housing money is kept in special trust funds, which the Legislature must review each decade and decide whether to continue them.

"I don't know how he can possibly rationalize this," said Jaimie Ross, president of the Florida Housing Coalition and affordable housing director of 1000 Friends of Florida, a growth-management advocacy group. "It's good for housing, it's good for the economy. The House just finished this very intensive investigation all over the state and learned a lot about how fantastic this program is."

Bush said he remains convinced Florida's $54-billion budget is too inflexible. Sixty percent of state revenue goes directly into trust funds. State law limits how trust fund money can be spent.

"While playing an important role and some are definitely worth keeping, in general, trust funds make it hard to reprioritize on a regular basis those things that are important," Bush said Thursday.

Affordable housing should compete for state funding each year, like schools, Bush has said.

Bush's plan came to light this week when his staff proposed a bill to create a new fund guaranteeing payments to cover affordable housing bonds. That would be needed only if the trust funds end.

More than $319-million from real estate transaction taxes, called documentary stamps, is expected to flow into the state's affordable housing trust funds this fiscal year, far more than expected when they were created 12 years ago.

Rising real estate values and the refinancing boom fueled the increase and made the trust funds a big target for politicians looking for cash.

More than $190-million will be spent on affordable housing in the budget year ending June 30. State lawmakers diverted another $100-million for other programs.

If the trust funds are not reauthorized, money previously dedicated to affordable housing could be spent on other state programs, forcing advocates to lobby lawmakers each year to get any money.

That would be disastrous, said Sen. Ken Pruitt, R-Port St. Lucie, a House member in 1992 when lawmakers increased the documentary stamp tax with the promise that money would be earmarked for affordable housing only.

"This will be a fatal blow to affordable housing in the state of Florida just when we need it most," Pruitt said. "They may cut it in half one year, and half the next. But we're kidding ourselves if we think affordable housing can compete against the demand of education, health and human services and criminal justice."

Last year, the program helped 8,884 households with either a no-cost loan, home repairs or retrofitting a home for a disabled family member.

Other programs also provided subsidized loans, awarded competitively, to developers of affordable rental properties. In 2002-03, all but 230 of 8,428 new rental units built statewide under the program were reserved for families earning no more than 60 percent of the median area income, according to the Florida Housing Finance Corporation.