Please see below for these important updates from CHAPA’s Public Policy Director Eric Shupin:
FY2018 State Budget Override Update
On November 2, the Senate continued the process of overriding Governor Baker’s vetoes. While the House finished overriding all the vetoes last month, the Senate has indicated that they would not take up all of the overrides. According to State House News, the Senate does not intend to restore about $200 million in MassHealth spending that the governor cut. Two weeks ago, Senator Spilka is quoted as saying, “The governor vetoed $320 million from this budget. The House overrode $320 million. As of now we are planning on overriding approximately $124 million.” The Senate has so far restored $99.8 million, according to Ways and Means.
Here is the status of overrides of CHAPA’s FY2018 budget priorities for affordable housing and homelessness prevention programs as of November 2nd:
A veto to language in HomeBASE (7004-0108) was also overridden. The language will prevent families from being ineligible for HomeBASE because of a single violation of a self-sufficiency plan.
Unfortunately, vetoes remain for two of our priorities, the Tenancy Preservation Program (7004-3045) and New Lease (7004-0106). The Governor’s vetoes will stand if they are not overridden by the end of the year. With only two weeks of formal sessions left before the Legislature breaks before returning in January 2018, the overrides will need to be taken up soon in order to be restored. If you can, please contact Senate Ways and Means Chairwoman Karen Spilka to ask her to restore funding for the Tenancy Preservation Program and New Lease for Homeless Families.
Federal Tax Reform Update
Yesterday, House Republicans released their tax reform proposal, The Tax Cuts and Jobs Act, to make sweeping changes to the U.S. tax code. Unfortunately, the tax reform proposal will either eliminate or seriously impact federal programs used in Massachusetts to create and preserve affordable housing.
The proposal preserves the Low Income Housing Tax Credit (LIHTC) and the 9% credit. However, the proposal eliminates tax exemptions for private activity bonds and the 4% tax credit. The bill also eliminates the New Markets Tax Credit program and the Historic Tax Credit. Additionally, the House bill calls for cutting the corporate tax rate from 35% to 20%, which will significantly decrease the value of LIHTC.
For next steps for Tax Reform, Representative Kevin Brady, Chair of the House Committee on Ways and Means, will be marking up the tax reform legislation. Members of the Ways and Committee will have an opportunity to offer amendments during the markup next week. The bill will then be sent to the House floor for a debate and vote. The Senate is expected to release its own tax reform proposal as soon as next week, with a mark-up the week of November 13. Congress’ goal is for each chamber to pass tax reform legislation on the floor by Thanksgiving, work out the differences in a conference committee in December, and have the President sign tax reform into law by the end of the year.
CHAPA has already reached out to each member of our federal delegation to let them know our serious concerns about the negative impact that the tax reform proposal will have on affordable housing in Massachusetts. We will be circulating a letter for organizations to sign onto early next week about the tax reform proposal. We will also be staying in touch with the National Low Income Housing Coalition, the Housing Advisory Group, and our other national partners to monitor tax reform and weigh in with Congress.
