Goshen News, Goshen, IN

Local News

February 27, 2013

Sequester will likely have an impact locally

GOSHEN — How soon and how much Goshen-area residents will notice automatic federal budget cuts that may begin Friday are mostly unknown.

Congress cut a deal last fall to institute across-the-board budget reductions that will trim $85 billion from the federal budget through Sept. 30 and $1.2 trillion over the next decade, according to The Associated Press. Some of those cuts will impact local agencies and services. For instance, all health providers that have Medicare patients will have a 2 percent reduction in their payments. Other services are also set to be reduced.

Pam Kennedy, the director of the combined Goshen and Warsaw Housing Authorities, said she got a notice from the Department of Housing and Urban Development agency warning to brace for a 6 percent reduction in housing assistance payments beginning Friday. The program provides rent and utility subsidies for low-income families.

“They suggest we set fair-market rents lower and double-check the utility allowance,” Kennedy said.

But that won’t happen in Goshen. This cut will be one in an ongoing series of financial reductions from HUD, Kennedy said. In 2010 the housing authority’s usual HUD support was reduced to 96 percent; in 2011 to 86 percent; and in 2012 to 74 percent.

“The sequester reduces it to 69 percent,” Kennedy said. “So we are supposed to streamline by not hiring more people and not giving raises and hopefully we will get through. What do they think we did when it went to 92, 86 and 74?”

Despite all the prior budget cuts, Kennedy said the Goshen agency has a financial cushion due to the City Council’s allocating $571,050 from its rainy day fund to bailout the agency in 2012. Also, a fund drive last year generated about $100,000 in private contributions to the agency.

“The Goshen Housing Authority is setting well for this because of the people who donated last year and the HAP cuts,” Kennedy said. “We are still sitting on that so we won’t be lowering the payments to landlords and stuff.”

She estimated that 285 families in the Goshen area benefit from the rental voucher program.

The agency is still rebuilding that program after several years of administration turmoil and financial stress that led to the merger of the Goshen and Warsaw agencies and the City Council bailout.

“We have been doing very well and we haven’t hardly dipped into it at all yet because we are not fully leased yet,” Kennedy said. “We have a cushion there where other people may not have a cushion. We are going to weather this.”

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