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Once again, we’re rich. The D.C. government will post a $321 million surplus for the 2013 fiscal year, the city’s third consecutive budget surplus, new Chief Financial Officer Jeffrey DeWitt announced today. And if we keep it up, the biggest beneficiary will be affordable housing.
Mayor Vince Gray and Councilmembers Phil Mendelson and Kenyan McDuffie worked out a system for spending surplus funds in the future. According to their agreement, half of excess surplus funds will go to the Housing Production Trust Fund, the city’s primary mechanism for building and maintaining affordable housing. The remaining half will be spent on a health benefits fund and on paying down the city’s debt.
But don’t expect to see much of that money going to affordable housing this year. The vast majority of the surplus is going to the city’s various reserves, allowing the rainy-day fund to reach an all-time high of $1.75 billion. Only $9.6 million of the surplus is considered uncommitted.
Still, the reserves are nearly full. The emergency, contingency, and fiscal stabilization funds don’t need any more cash: The cash flow fund is 52 percent full, meaning it requires just under $300 million more. In future years, as the city’s budget grows, so will the mandated reserve funds, since they’re directly tied to the size of the budget. But if the current fiscal year brings as large a surplus as the current one, the reserves could be just about full, allowing surpluses in future years to go almost entirely toward things like the Housing Production Trust Fund.
Elizabeth Falcon of the Coalition for Nonprofit Housing and Economic Development, who oversees the Housing for All campaign, concedes that today’s announcement probably won’t mean much of a boost for the Trust Fund in the 2013 or 2014 fiscal years. But in future years, she says, it’s likely to provide a stable funding source for the Trust Fund that could allow it to reach housing advocates’ funding goal of $100 million per year, including the city’s existing contribution of about half of that through deed transfer and recordation taxes.
“I think in the long term, because D.C. has to have a balanced budget, it means they can’t end the year without having leftover money,” she says. “And so that allows a level of confidence that there’ll be money at the end of the year. Most years, it’ll provide over $50 million per year, in addition to what’s already dedicated to the Trust Fund, so it should bring it over $100 million per year.”
Today’s announcement echoes a bill McDuffie introduced earlier this month, which would have dedicated 25 percent of excess funds to the Trust Fund. The 50 percent proposal will likely supplant his bill.
“We probably won’t need Councilmember McDuffie’s bill because this covers it,” says Stephanie Liotta-Atkinson, McDuffie’s legislative director. “Everybody’s had a meeting of the minds that this is the right way to go.”
She adds, “We just need a Council that’s supportive.”
Photo by Darrow Montgomery