When the Florida legislature meets in Tallahassee, a sweep of the Sadowski Housing Trust Fund to fund projects unrelated to housing usually follows.
The State Documentary Stamp Duty on Real Estate Sales provides Sadowski Funds with $ 423 million per year for state agencies and local governments to develop initiatives to help people own housing and pay for housing. rent. The funds are critical for Palm Beach County and much of Florida as the housing market becomes less affordable. Yet heads of state too often see funds as nothing more than a piggy bank for other budget priorities.
After years of plundering the only funds intended for affordable housing initiatives, lawmakers this year came up with a strange solution: they would not touch the funds, in exchange for a permanent reduction in the amount it provides for housing.
The remedy is as absurd as “plundering” hundreds of millions of housing dollars during an unprecedented affordable housing crisis.
Unfortunately, the Legislature has a habit of dipping into trust funds to pay for things for which they are not designated, like corporate tax cuts and favorite projects. In a particularly infuriating move that came to light after the condominium collapse in Surfside, lawmakers had embezzled $ 15 million over the past three years from the Insurance Regulatory Trust Fund. This fund funds programs that enforce laws and regulations and help condominium boards understand their responsibilities in maintaining their buildings.
Florida has about 80 trust funds, according to a 2017 report from the Florida Office of the CFO. Whether it’s fraud prevention, road safety, or international trade promotion, they all rely on specific fees, fines or taxes to address specific issues.
Over the past three years, lawmakers have withdrawn $ 1 billion from various trust funds and shifted the money to other uses. The “uncommitted cash” section of each state budget reveals trust funds affected and amounts of money embezzled. More than half of those so-called “sweeps” – about $ 559 million – were for the current fiscal year that began July 1.
In addition to the Insurance Regulatory Trust Fund, lawmakers have taken $ 105 million since 2019 from the Agency for Health Care Administration Grants and Donations Trust, which pays health insurance costs. for low-income uninsured children.
Last year the governor left the Sadowski fund whole, to change. The same cannot be said of the Homeland Protection Fund of the Ministry of Environmental Protection, which generates money to protect sensitive lands from oil and chemical spills. It cost $ 85 million.
The “uncommitted cash” section only shows decisions made by legislators to arrive at the final budget. This does not take into account any possible trust fund transfers that Governor Ron DeSantis might also make. Last month, for example, DeSantis vetoes swept away $ 40 million in housing funds.
The Sadowski trust funds have been Florida’s primary target when it comes to plundering a dedicated revenue stream for the general budget. Since 2002, when then-Gov. Jeb Bush got $ 12 million out of it, about $ 2.3 billion in housing money was diverted to other programs and spending.
Now half the fund will go to sea level rise and wastewater treatment projects instead, leaving a meager $ 209 million a year for housing programs and angering those who want to see efforts. increased to limit the impact of rising house prices.
Florida real estate agents are armed. They are calling for an amendment to the state’s constitution to overturn the new law and prevent future housing fund sweeps. Yet many affordable housing advocates, including the Sadowski Coalition, remain cold on the idea. They insist that although the new appropriations are smaller, the money still exceeds what was left after lawmakers raided the housing trust fund in the past.
But there is no doubt that housing is becoming less and less affordable day by day.
It now costs $ 1,650 a month to rent a one-bedroom apartment in Palm Beach County and the median cost of a home is $ 475,000. And the county’s share of $ 20.5 million of Sadowski’s funding for affordable housing has been reduced to $ 9.7 million.
Old habits die hard. The drama may be over when it comes to lawmakers misappropriating dedicated housing funds, but the ability to cope with an increasingly unaffordable housing market is still in question. The same is true of the practice of heads of state of viewing trust funds as easy solutions to lingering problems.