From the Field: Vermont Advocates Defend State Housing Trust Fund, Other Housing Programs

Housing advocates in Vermont have much to celebrate as the state’s General Assembly adjourned its annual Legislative session this month. Vermont faces a political environment familiar to many states, including an overall state budget shortfall and an aversion to raising new revenues through tax increases. This year, Vermont advocates conducted a Legislative Action Day and coordinated testimony before 13 committees of the State Legislature. They succeeded in preventing funding cuts and achieving modest increases to statewide housing programs, including the state housing trust fund. “Preventing funding cuts to established housing programs is in itself a success to celebrate,” says Erhard Mahnke, executive director of the Vermont Affordable Housing Coalition, a NLIHC state partner.

Vermont created its statewide housing trust fund, called the Vermont Housing and Conservation Board (VHCB), in 1987, and established as its funding source a 50% share of a real estate transfer tax. Revenue generated by the transfer tax goes first to the state’s General Fund before being appropriated to the trust fund by the General Assembly. Although the trust fund enjoys broad legislative support, chronic state budget shortfalls have led to the diversion of funds intended for the trust fund toward other programs and priorities. Assembly members are able to add “notwithstanding” clauses to the legislation appropriating money to the trust fund that allow for annual draws of revenue away from the trust fund toward other, non-housing-related initiatives and programs. Mr. Mahnke estimates that the trust fund has lost as much as $41 million over the last 15 years due to notwithstanding clauses, which could have built or rehabilitated approximately 1,000 homes for low-income Vermonters.

VHCB will lose an additional $5.5 million in FY 2017 due to notwithstanding clauses and will be level-funded at the $14 million appropriated in FY 2016. Advocates pushed for full funding at the $19.5 million level they believe to be obligated for VHCB by statute. They also continue their call for an additional funding source for the trust fund and for recapturing during the next four years the $41 million lost in past years.

In addition to the appropriation of the real estate transfer tax, VHCB received an additional $1.2 million of capital bond funding for community redevelopment in Vermont’s Northeast Kingdom. The Northeast Kingdom, comprised of Vermont’s northeastern most Essex, Orleans and Caledonia counties, is considered to be the most rural and economically disadvantaged part of the state, home to some of the most vulnerable, low-income Vermonters.

In another notable funding increase, a statewide weatherization program for low-income homeowners saw an increase of $2.5 million, which was the result of collaborative organizing between housing and environmental justice advocates. All other housing programs were either level-funded or received modest increases.

Mr. Mahnke points to Vermont’s most recent Point-In-Time report, compiled by the Vermont Coalition to End Homelessness and the Chittenden County Homeless Alliance, as evidence that statewide investments in housing and homelessness programs are working. Vermont’s 2016 Point-In-Time report showed statewide decrease in homelessness by 28% after several years of increases. The report also demonstrated a 25% decrease in chronic homelessness and a 22% decrease in homeless among families and children.

“This was yet another difficult budget year, but housing and homelessness did relatively well, all things considered,” said Mr. Mahnke. “Of course, we’re disappointed at the chronic underfunding of our trust fund and another year without increases for state rental assistance and other programs that reduce homelessness, but in this fiscal environment, level-funding is a win. We were especially pleased to gain a major increase that helps low-income Vermonters reduce their heating costs by buttoning up their homes, while also reducing the state’s carbon footprint.”

For more information, contact Erhard Mahnke at erhardm@vtaffordablehousing.org