Policy & Legislation
Legislature’s Budget Leaves Housing Funding Intact
But Governor Says He’ll Veto It
September 16, 2008
Late Monday night, the legislature passed the 2008-09 budget and 20 trailer bills, sending them to the governor's desk. Governor Schwarzenegger, however, announced Tuesday that he’ll veto the budget, and, if legislators override his veto, he will veto the almost 900 other bills still awaiting his action.
At press time, legislators hadn’t responded to the veto threat.
Based on a quick reading of the 22 budget and trailer bills, housing and homeless programs appear to remain intact.
AB 1781 is the main budget bill, reflecting the Budget Conference Committee agreement reached in July. AB 88 contains supplemental appropriations.
The housing-related provisions in AB 1781 include:
- PROMISE: Appropriates $10 million for the Program for Returning Offenders with Mental Illness Safely and Effectively (PROMISE). Housing CA's Zack Olmstead continues to work with the CA Department of Corrections and Rehabilitation (CDCR) to craft the program.
- Proposition 1C: Appropriates $200 million for Infill Incentive Grants, $95 million for Transit Oriented Development, $95 million for Affordable Housing Innovation, $40 million for BEGIN and $50 million for CalHome. (Most other 1C programs are continuously appropriated and, therefore, not included in the budget.) As far as we can tell at this time, no special-interest provisions relating to 1C were snuck in at the last minute.
- Emergency Housing Assistance Program (operating grants): Maintains funding at the prior year's $4 million level.
- Office of Migrant Services: Funded at last year’s level, $6.3 million.
- Loans: Borrows $19.4 million from special funds, including the Mobilehome Park Revolving Fund and the Housing Rehabilitation Loan Fund.
Additionally, budget trailer bill AB 1389 shifts $350 million in 2008-09 from redevelopment agencies (RDAs) to local schools, based on a specified formula. An RDA can borrow up to 50% of its share from its Low-and-Moderate-Income Housing Fund, if all of its other funds are legally committed. The loan must be repaid within 10 years. (For more information, see Section 53, beginning on page 101.)
Lastly, AB 1452 limits the amount of certain tax credits that businesses can claim in 2008-09 and 2009-10, including the Low Income Housing Tax Credit (LIHTC). The likely impact of this change on the LIHTC, if any, was not known immediately.
If the legislature decides to revisit the budget in light of the governor’s veto threat, some of the above appropriations and trailer bills may change. We will stay on top of it all and notify you when something significant occurs.
Contact Julie Snyder, (916) 447.0503 x102 or .
