on the FY 2000 VA/HUD & Independent Agencies Appropriations Bill H.R. 2684 severely underfunds public housing programs in FY 2000. When the cuts in capital funding, HOPE VI, the public housing drug elimination program and the lack of even an inflation adjustment in operating subsidies are aggregated, the total shortfall in public housing funding exceeds $1 billion. These cuts would be devastating to the program and the three million-plus residents it serves. In contrast to the bill, PHADA recommends the following funding levels for public housing programs in FY 2000:
Operating Subsidies  Operating subsidies have been significantly under-funded the last several years. In fact, PFS has been shortchanged five of the last six years. HUD estimates that HAs are presently being funded at only 92 percent of overall PFS needs. This has forced many HAs to cut basic services, or to dip into reserves to offset costs. While HAs may be able to adequately address a one year shortfall, the cumulative effect of the operating fund cuts creates severe budgetary problems for HAs.  Despite this situation, H.R. 2684 maintains PFS at the existing level ($2.818 billion), without even an increase for inflation. This "cut" in spending is devastating and in HUD's estimation "will likely result in 150,000 additional units developing moderate or severe physical problems." On this point, it is critical to remember that about 40 percent of all public housing residents are either elderly or disabled. In addition, many of the families residing in public housing are seeking to move up the ladder of self sufficiency through state or local welfare reform initiatives. H.R. 2684 would no doubt stifle those efforts in many communities. In light of the foregoing, PHADA urges Congress to increase the appropriation to $3.2 billion, the amount PHADA estimates is required to fully fund PFS in FY 2000.
Last year, Congress took a major step forward by rejecting the administration's inadequate capital budget request, instead appropriating $3 billion. H.R. 2684 retreats from this positive course, however, appropriating only $2.55 billion, a cut of more than 15 percent.  This $445 million cut will erode the quality of life for many residents and, in some cases, create unsafe and unsanitary environments for those residents. Ironically, the bill will also result in the poorer performance of many HAs since HUD scores them on the physical quality of their properties as well as resident satisfaction. How can HUD and Congress expect HAs to perform well in these areas when their capital funding is cut by 15 percent, and operating subsidies are funded well below actual needs? To maintain progress in the area of capital improvements, PHADA urges Congress to approve the same amount as current levels, $3 billion.
The appropriations bill cuts $20 million from PHDEP. PHADA urges Congress to appropriate the same amount ($310 million) in FY 2000. In a related matter, PHADA commends the House for rejecting the administration's ill-advised Youth Anti-Drug Diversion Program. While the objective of that concept is laudable, the program is duplicative of current anti-crime efforts, unnecessary, and would seriously dilute funding for most HAs, thereby damaging PHDEP's overall effectiveness.
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