Business & Economy

Committee considers scrapping $35 million housing bond

Tim Ashe
Senate President Tim Ashe is a member of the Appropriations Committee. File photo by Anne Galloway/VTDigger
A key Senate committee is seeking extra time to figure out whether the state budget has room to fund a $35 million affordable housing bond proposed by Gov. Phil Scott.

The Senate Appropriations Committee decided Tuesday to delay consideration of S.100, this year’s omnibus housing bill. The bill contains Scott’s proposed housing bond, which would cost the state $2.5 million per year for 20 years.

The Senate Finance Committee, which has jurisdiction over taxes, voted Thursday night to pay off the bond through a $2-per-night occupancy fee on hotels, motels and campgrounds. Money from the occupancy fee would also pay for the cleanup of Lake Champlain.

Scott has repeatedly said he would veto any bill that raises new taxes or fees.

Senate President Pro Tempore Tim Ashe, D/P-Chittenden, said he will now work with the committees on Appropriations, Finance and Economic Development to find out whether to take the bond, and therefore the need for the occupancy fee, out of the bill.

Ashe said senators generally support affordable housing and that the Finance Committee “put their best foot forward” when picking a $2-per-night fee as a funding source.

But Ashe said now might not be the time to start a new program given that they are working in a “very problematic” situation in which Scott will not support new taxes or fees, and the House budget has already made cuts to social programs.

“What we’re trying to do is find a way to support housing at all affordability levels without it coming at the expense of an existing program,” Ashe said. “The governor, his proposal for the housing construction, was going to put about $1 million minimum of stress on the general fund. That’s what we’re trying to avoid.”

Ashe sits on the Senate Appropriations Committee. He told the members Tuesday that the solution to their problem may be to take the $35 million bond out of the bill for the time being and reconsider the proposal at a later date.

Ashe said that would not kill the proposal, as long as affordable housing is a priority for the governor, the Senate and the House. “I think it means that we’re buying time to keep thinking it through,” he said.

Sen. Jane Kitchel, D-Caledonia, the chair of the Appropriations Committee, said Scott’s budget, and therefore funding for the $35 million bond, depended on millions of dollars in savings from local school budgets and shifting the responsibility for some education spending such as teacher retirement.

The Legislature has not embraced Scott’s approach.

“His proposal didn’t quite materialize the way that was necessary to generate the revenues to support his spending,” Kitchel said. “So the House budget that they have voted out doesn’t have the (funding) in it.”

Sen. Dick Sears, D-Bennington, a member of the Appropriations Committee, said he is already dealing with competing funding priorities this year, and the $2.5 million per year to support the bond appears to have been spent.

“I also understand the governor wanted to spend more on child care subsidies,” he said. “I think that’s important. College scholarships, funding for higher ed — I think that’s important.”

Kitchel said: “The question is, where does this fit within all these competing needs. The committee’s not prepared to make that judgment at this point.”

The Senate Appropriations Committee is scheduled to take up the issue again Wednesday.

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  • Dave Bellini

    If you’re not going to raise taxes or fees and existing programs are strapped, why start new programs? Provide greater support for existing programs. Is the budget balanced? The legislature balances the budget with assumptions. Legislative assumptions are often too rosy. Leave a small cushion. If you’re really in a two year budget cycle, be cautious in year one. I think the House did a good job closing the gap. Pause, see if there’s an uptick in revenue.

    • Anthony Redington

      David targets the fog-bound thinking surrounding the $2 fee. Clean up Lake Champlain? “Affordable” housing? What does it all mean? Shumlin poverty committee reports call for 1,500 units of “livable rents” (no more than 25-30% of income for housing) in significant part to make up for federal cutbacks begun in 2004. Our Departments of Mental Health, Corrections and hospitals forced to provide housing assistance still have hundreds each year delayed institution exit because “livable rents” not available!

  • Edward Letourneau

    What words have these people said about cutting the taxes and regulations that make housing so expensive?

  • Anthony Redington

    The public and legislators remain confused about the new dynamics of VT’s rental assistance market today. A surplus of rentals exists in most areas with a healthy 4.7% rental vacancy rate in Chittenden County–about 500 empty apartments in Burlington and growing! (Yes, a sea change after decades of rentals famine.) With nine of fourteen VT counties losing population and Chittenden market healthy, demand for more rental housing except for a senior population (it is doubling!) remains low. Desperately needed are fed Section 8 type assistance, the only way to “livable rents” (no more that 25-30% of income for rent) for low income and retirees. Our Legislature faces the decline of Section 8 fed assistance here ongoing since 2004 while needs grew. The poor and homeless–as one would expect–suffer today. The Shumlin poverty panel recommendation?–the $2 hotel fee paid mostly by out-of-staters not just to meet low-income needs but also to make up for hundreds of lost federal Section 8 type supports. That $2 fee provides about 1,500 VT Section 8 type vouchers reaching to the lowest income, that is “livable rent” units. (The word”affordable” is meaningless empty rhetoric.) Today another 311 fed Section 8 vouchers for VT on the chopping block depending on Congressional action funding the government through September when the first Tump cut budget hits. Dear VT Legislature–pass the poverty group recommendation and provide1,500 “livable rents” to low income families and seniors now! Tony Redington Burlington

    • Edward Letourneau

      My taxes and fees are 25% of my income. Seems like rational people would be looking at cutting that as the method to solve the problem.

  • Peter Chick

    I wonder how many in Montpelier are landlords.

  • Good thing there are going to be plenty of proceeds leftover from the sale of the Redstone Historical Building. The politicians will get the money one or another.