Policy & Legislation
State Budget Helps New-Home Buyers; Nothing for Renters or Homeless People
February 24, 2009
The state budget passed last week contained billions of dollars in cuts that will make daily survival more difficult for lower-income Californians. Cost-of-living increases for low-income seniors and people with disabilities were eliminated, wages for In-Home Supportive Services employees were reduced, and no money was included to keep homeless and domestic-violence shelter doors open.
The only bright spot for nonprofit developers and the people they assist is a new $10,000 tax credit for buyers of new homes sold between March 1, 2009, and February 28, 2010 ("new" = never occupied). Senator Roy Ashburn (R-Bakersfield) asked for the credit in exchange for his vote on the budget.
The total credit available is capped at $100 million. To secure the benefits for its buyers, a developer must notify the Franchise Tax Board of the sale. That notification reserves funds for the buyer. Then, he or she claims one-third of the tax credit on his or her tax returns for each of the next three years.
The budget agreement also placed a measure on a special May ballot to limit state spending in any year to the average of the previous 10-years' spending. This measure may impact plans to raise dedicated revenues for the state's housing trust fund this year. Housing CA will seek legal advice to guide our strategy.
Another measure that will go before voters in May asks voters to redirect $227 million of Mental Health Services Act (MHSA) funding in the 2009-10 fiscal year and up to $234 million in FY 2010-11 to the Early and Periodic Screening, Diagnosis and Treatment Program. Housing CA continues to explore whether this will have any impact on the MHSA Housing Program.
Contact Julie Snyder, (916) 447.0503 x102 or .
