A prolonged impasse over the state budget could jeopardize affordable housing construction projects in low-income counties.
The Workforce Housing Loan Program is one of a number of state programs that received “non-recurring” funding in last fiscal year’s budget — meaning the new fiscal year’s round of money won’t arrive until the budget becomes law. And with legislative leaders and Gov. Roy Cooper far from a spending agreement, some expect that the stalemate could drag on for months.
The uncertainty is already being felt in the Workforce Housing Loan Program, which provides loans to help developers build low-income housing developments. The program is slated to receive $20 million in the budget approved by the legislature, which will fund loans to be awarded next year. But developers are already working on their applications now by securing options to buy land for new housing.
And according to Chris Austin, who administers the program at the N.C. Housing Finance Agency, developers are “hedging their bets” in case funding doesn’t come through in time. That means they’re focusing on housing sites in wealthier urban counties where the loan program is less essential to making the project financially viable.
Because low-income housing residents typically pay higher rents in urban counties (qualifications are based on the local median income level), the loan program reserves its most generous grants for projects in low-wealth counties to offset lower rent revenue. Developers in those counties are worried their projects could fall through if a budget impasse means the millions in loan money isn’t available next year. If a budget doesn’t get enacted soon, “we will probably receive no applications in low-income counties,” Austin said.
The Workforce Housing Loan Program is far from the only program waiting for non-recurring funding to be renewed in the new budget.
The N.C. Kids Digital Library, which allows people across the state to access children’s e-books for free, needs the budget to become law before it gets its annual $200,000 allocation. Until then, users might notice that no new books or materials are being added to the online collection, according to a spokeswoman for the N.C. Department of Natural and Cultural Resources and the State Library.
The library won’t go dark though — contributions from participating local libraries cover the vendor fees and operational costs, so the existing collection will remain available to users.
Also running on non-recurring funding is the Department of Environmental Quality’s dam safety program, which conducts dam inspections and reviews emergency action plans as part of a mandate from the state’s 2014 coal ash management law. But so far, the program is functioning normally. “DEQ’s Division of Energy, Mineral and Land Resources is not anticipating a need to affect changes to dam safety program implementation in response to the budget impasse,” spokeswoman Christy Simmons said in an email.
In most corners of state government, it’s business as usual because recurring budget money from last year keeps flowing under a 2017 law designed to avoid a government shutdown.
The biggest impact is that state employees won’t get raises yet, and after June 30, state agencies can’t fill vacant positions that are slated for elimination in either the House, Senate or conference committee budgets.