04/01/05
Raid on housing trust fund denied county $2.5 million

Florida long-range planners who recognized the importance of affordable housing as a component of growth established the nation's largest dedicated revenue source for programs they now fear may be sacrificed to help balance the state's annual budget.

If the Legislature approves Gov. Jeb Bush's request, more than half of the $400 million that annually flows into the state's affordable housing trust fund from a special tax on real estate sales could be diverted into the general fund.

The immediate impact on Sarasota County housing rehabilitation and down payment assistance programs would be about $2.5 million a year, and could hamper local efforts to provide affordable homes for service sector workers and residents with modest incomes.

"Florida was ahead of its time with this fantastic concept," said Dan Schmelzinger, the county's deputy director of housing and community development. "I've worked in cities where there is no assistance. In Iowa and Michigan we wrestled without state revenue."

No recourse

The Florida Legislature adopted the William E. Sadowski Act in 1992 and levied a 20-cent documentary stamp tax on every $1,000 of real estate sold to provide a reliable revenue stream for the state's affordable housing trust fund. It generated $413.8 million last year.

Most of the money goes to fund SHIP (the State Housing Improvement Program) and is allocated to cities and county. The remaining 30 percent is dedicated to other programs, such as the Guarantee Fund, which have been approved by the Legislature.

Last year, affordable housing took a statewide hit when lawmakers dipped into trust fund revenue and took $220.8 million to help balance the budget. It left $193 million for housing programs and set a precedent the governor now wants to make permanent.

The trust fund raid came at a time when Sarasota County is establishing a local trust fund of its own and dedicating proceeds from the future sale of about 900 seized North Port lots -- an estimated $9 million to $10 million -- to the purchase of affordable housing development sites.

On March 11, County Attorney Steve DeMarsh reported there is no legal recourse to require the $220.8 million be replaced. He said the law governing state trust funds "does not apply to monies appropriated through the general appropriations act."

Signs

Because local real estate prices have recently soared, many service workers can no longer afford to live in the county. A possible sign that the exodus has begun was recently acknowledged by officials who administer preschool programs for working class families.

They reported Early Learning Coalition applications have dropped over the last six months, and there are no longer waiting lists for the children of working-class families who qualify for preschool education programs at child care centers.

Last month, county commissioner Nora Patterson addressed the issue of families leaving.

"Our poor people are moving out," she said. "This is a back-handed way of solving our social problems, but not a great one. We are losing our work force."

Coalition Director Janet Kahn indicated a search for prior pre-school applicants revealed many families had left the county.

"They moved to Manatee County or elsewhere," she said. "Those we talked to said they could no longer afford to live here."

By Jack Gurney

Pelican Press

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