Latest Budget Cut Could Harm Affordable Housing Sector, Critics Say

May 7, 2015

Last week, Gov. Peter Shumlin surprised lawmakers with a plan to cut another $8 million from next year’s budget. Shumlin says the proposal would reduce the need for new taxes without hurting low-income Vermonters. But critics say the plan could damage an affordable housing sector that keeps roofs over the heads of some of the state’s poorest residents.

Paul Zabriskie is the weatherization director at Capstone Community Action, a Barre-based organization that administers numerous programs for needy residents in the central Vermont region. On a sunny, warm afternoon in downtown Montpelier, Zabriskie surveys an affordable housing complex in the midst of a major renovation.

Funding for a portion of this major rehab comes courtesy of the Vermont Fuel Efficiency Partnership, which is helping to pay for air sealing and insulation that will reduce annual heating costs.

“It’s getting sort of a comprehensive package of energy upgrades, which will reduce the energy demand on the building and make it more affordable for the occupants,” Zabriskie says.

The program directs more than $1 million in state revenue annually into projects like the one underway here in Montpelier. But the plan put forward by Gov. Peter Shumlin last week would instead use the money to balance next year’s state budget.

Gov. Shumlin's $8 million reduction proposal includes $2 million in weatherization cuts, $1.1 million of which would come at the Vermont Fuel Efficiency Partnership.

If that money goes away?

“We stop doing this,” Zabriskie says. “This building would’ve just been put back together. They’d paint it, they’d put in new kitchen cabinets … But they’re not going the extra step to make this a 21st-century building.”

Shumlin’s $8 million reduction proposal includes $2 million in weatherization cuts, $1.1 million of which would come at the Vermont Fuel Efficiency Partnership. Shumlin says he doesn’t enjoy putting new cuts on the table. But he says this one has a benefit.

“It would have no impact on low-income Vermonters,” Shumlin says.

That’s not how everyone sees it.

“The way this has been presented by the administration is that this is a cut that will really only affect middle-income people, and they have other places they can go to get energy efficiency funds to make improvement to their homes,” says Erhard Mahnke, coordinator of the Vermont Affordable Housing Coalition. "And nothing could be further from the truth."

"It would have no impact on low-income Vermonters," Shumlin says. That's not how everyone sees it.

Mahnke says the weatherization funds often provide a critical piece of financing for rehabilitation of old affordable housing stock, as well as the construction of new units.

“When you’re taking these monies … away from the Vermont Fuel Efficiency Partnership, you’re removing one of the key sources that helps to stabilize housing costs over the future, for both the nonprofit operator and the low-income residents that benefit from it,” Mahnke says.

Mahnke says the program funds improvements for as many as 500 units a year. He says the heating costs that are saved are vital to the residents, half of whom report average annual incomes of $17,000. Take away the weatherization money, and Mahnke says the state will stall production of needed affordable housing capacity.

“And we need more affordable housing,” Mahnke says. “This is death by a thousand cuts. And it’s going to make it that much more difficult for us to make headway in the battle against homelessness.”

“This is death by a thousand cuts. And it’s going to make it that much more difficult for us to make headway in the battle against homelessness.” - Erhard Mahnke, Vermont Affordable Housing Coalition coordinator

Dylan Zwicky, clean energy advocate for the Vermont Public Interest Research Group, says the plan will have adverse environmental effects as well. Lawmakers in 2013 set a goal of weatherizing 80,000 homes by 2020, as part of an effort to reduce the $600 million Vermonters spend annually on fossil fuels to heat their residences.

Zwicky says the state isn’t on pace to meet even half that goal. Undermining funding for weatherization now, according to Zwicky, will set back the effort further.

Shumlin says there are no good options when it comes to budget reductions.

“We’ve got a $113 million budget gap and we’re not in an environment where we can just turn to Vermonters and just say, ‘Hey, please, pay lots of higher taxes,’” Shumlin says.

Lawmakers are deliberating this week over whether or not to adopt the governor’s recommendation.