Capitol Connection: Battle Ready for Affordable Housing
With the passage of a sweeping and contentious budget deal on February 9, which provides billions of dollars in new funding for both defense and domestic programs, Congress has now set the date of March 23 to put together another massive deal: a $1.3 trillion omnibus spending bill. The omnibus will lay out detailed spending levels for government programs for the rest of the fiscal year, ending September 30.
The bi-partisan budget deal extends the government’s debt limit to March 2019, and provides approximately $90 billion in disaster aid for Texas, California, Florida, Puerto Rico, and the U.S. Virgin Islands. But those increases will only go into effect after lawmakers draft and pass the full year omnibus. To add to the drama, the White House will roll out its budget document on Monday, February 12, outlining its biggest policy priorities from border security to infrastructure investments. The presidential wish list will then be sent to Capitol Hill, with little expectation the proposed program cuts or funding shifts will make it into an actual spending bill.
Deep inside the massive budget deal were several tax provisions known as extenders, which retroactively extended about 30 tax breaks that expired at the end of 2016. In January, knowing this tax vehicle was a possible platform for us to include the Cantwell/Hatch Affordable Housing Credit Improvement Act, affordable housing advocates (ACTION) started mobilizing our message on the Hill and back home to push for inclusion of S.548 in the package.
Senator Maria Cantwell worked closely and furiously with all of us, and new House Champion Rep. Carlos Curbelo (FL-26) pushed leadership to include our provisions. Our proposal included a 50% LIHTC increase for two years, scored at $5.2 billion, and the 4% rate fix for bonds. In the end, the two-year budget deal unveiled by Senate leaders contains tax breaks for rum, racehorses, and NASCAR track owners, but not affordable housing production. We were extremely close to a win, but you know the old saying about horseshoes and hand grenades; we were not close enough to win.
Yes, we knew that S.548 was not an expired tax provision and that it did not meet the technical definition of an “extender.” But we also know that the new tax law passed in December with a lower corporate tax rate will have negative effects on future equity pricing and production, so we are looking for any and all vehicles. We are keeping up the momentum as we head into the next six weeks to March 23, with renewed hopes of getting S.548 and its companion H.R. 1661 inserted and passed.
The budget deal came about quickly, and we know that the omnibus will be crafted quickly as well. I continue to encourage all of you to reach out to your members of Congress, especially Republicans, asking that they urge leadership to include the Affordable Housing Credit Improvement Act in any upcoming tax legislation. As Senator Cantwell said this week, be “battle ready.”
This has been prepared for information purposes and general guidance only and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is made as to the accuracy or completeness of the information contained in this publication, and CohnReznick LLP, its members, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.
Affordable Housing News & Views - February 2018