News and Tribune

April 7, 2013

Public housing feeling sting from sequester

New Albany Housing Authority’s 2013 budget cut by 18 percent

By DANIEL SUDDEATH
daniel.suddeath@newsandtribune.com

NEW ALBANY — New Albany Housing Authority Executive Director Bob Lane has some tough decisions to make.

With Congress unable to reach an agreement, Lane is attempting to adjust to an 18 percent annual budget cut due to the federal sequester.

The reduction in this year’s operating budget of about $850,000 has already led to the merger of some NAHA offices, and in time could result in possible employee furloughs, reduction of services and even the loss of public housing units.

Lane estimated that NAHA could close 40 Section 8 housing units in the coming years if the federal matter isn’t resolved.

“We’ve got to look at everything,” Lane said Friday.

Through attrition, Lane said the units could be shut down as families move out. The NAHA has operated at a 99 percent occupancy rate for the past three years, and about 46 percent of public housing residents in the city are less than 18 years old, according to the organization.

Lane said he isn’t disputing the issue of debt reduction, but doesn’t support how the matter has been handled by Congress.

Now with 55 employees, NAHA has seven fewer workers on staff than five years ago. The thought of cutting employees’ salaries, reducing benefits or further trimming the staff aren’t appealing propositions for Lane.

“This should not be on the backs of the people who serve low-income” residents, he said. “There are other cuts that could be made in this country.”

Congress approved a bill two years ago declaring a plan must be approved to reduce the national deficit by $4 trillion or automatic budget cuts would start in 2013.

The arbitrary cuts are estimated to tally about $1 trillion and began March 1.



FEDERAL REACTION

President Barack Obama has stated he was hopeful the threat of the sequester would be so unattractive that Democrats and Republicans would find a compromise.

“I believe such a balanced approach that combines tax reform with some additional spending reforms, done in a smart, thoughtful way is the best way to finish the job of deficit reduction and avoid these cuts once and for all that could hurt our economy, slow our recovery, put people out of work,” Obama told The Associated Press.

According to the White House, unless Congress acts, the sequester will cut funding for first responders in local communities, eliminate jobs for 30,000 teachers and school staff and end afterschool programs for about 1.2 million kids.

Sen. Joe Donnelly, D-Ind., said recently in a stop in New Albany that a bipartisan approach and a balanced budget could stave off the sequester.

“What we’re trying to do is put together a long-term budget plan that is mixed and balanced so that we can get back to a balanced budget,” he said.



BEHIND THE NUMBERS

As far as federal funding goes, the reduction to the NAHA budget is closer to 30 percent.

Rent payments from public housing residents were estimated to bring in about $2.26 million this year, with U.S. Department of Housing and Urban Development subsidies to account for the remainder of NAHA’s $6.1 million 2013 budget. According to the NAHA, the organization has about $1.8 million in annual expenses related to utilities and property insurance that it cannot control. That leaves about $4.3 million for this year in operating costs primarily tied to maintenance, protective services and administration costs.

Lane recently traveled to Washington, D.C., to meet with Indiana congressmen about the public housing cuts. He said most of the conversations were centered around regulations and “red tape,” which he said drive up expenses for public housing agencies.

“You can’t operate with unfunded mandates,” Lane said.

According to NAHA, no local or state dollars are required to operate the organization’s programs.

The sequester hasn’t yet affected NAHA’s plan to reconfigure the 512 units and more than 50 buildings that comprise Broadmeade Terrace, Parkview Towers and Parkview Terrace. The three complexes adjacent to Bono Road embody the largest continuous public housing site in Indiana, according to Lane.

The $60 million project would primarily be funded through tax credits and could start next year.

SO YOU KNOW

Public housing history

• The New Albany Public Housing Authority launched in 1937.



$9,982

• The annual average income of NAHA residents as of 2013, according to the organization.