Having reviewed the operations of Commerce and Community Development in the prior two articles, lets take a look at the costs.
The audited fiscal year 2016 expenditures of this Agency were $53.5 million with federal grants supplying about $23 million of the funding.
Note that fiscal year 2016 expenditures were up 40.8% over fiscal year 2015, or about $21 million. The 2016 expenditures were also well in excess of budget. The 2016 budget for the Agency was only $34.1 million with only $9.8 million of funding from federal grants, as follows:
2016 Final Budget
Administration: 7.9 million
Housing and Community Development: 15.9
Economic Development: 6.2
Tourism & Marketing: 4.1
TOTAL: $ 34.1 million
The Department of Housing and Community Development received $20.1 million in federal funding under the Community Development Block Grant Program in 2016, which was about $14 more than had been budgeted. This money would have been used for housing, restoration and renovation projects in towns around Vermont.
Other than the increase in Community Development Block Grant spending, The Informed Vermonter was unable to reconcile the gap between the budget and the audited results, leaving a $5-6 million gap in actual expenditures over the budget. Note that the 2017 final budget for Commerce and Community Development is back down to $34.6 million, which is in line with historical annual expenditures prior to fiscal year 2016.
Risk of Federal Budget Cuts: The current administration is Washington has proposed to eliminate the Community Development Block Grant Program and the National Housing Trust Fund. Its not clear that Congress will do this, but spending levels are certainly under pressure. It may be challenging for Vermont to replace this funding with its own resources.
Modest Economic Development Funding: In the context of $5.7 billion of total annual expenditures for the state, the $10.3 million budgeted for Economic Development and Tourism & Marketing is quite modest.
Low Income Housing is the Biggest Activity: In addition to $15.9 million budget for the Housing and Community Development Department, which is largely funded by the Community Development Block Grant Program, there are a number of very large expenditures flowing through the various autonomous housing entities. The Vermont Housing Finance Agency originated $95.6 million of new mortgage loans in 2016, the Vermont Housing and Conservation Board made $17.6 million in new grants and loans (partially funded by Vermont’s Property Transfer Tax) and HUD Section 8 funded over $58 million in housing assistance. Last, there were some $4.3 million of state and federal tax credits granted for low income housing developments.