Friday, May 08, 2020

House modifies affordable housing credit as part of budget agreement, Dems protest

House maintains modified affordable housing credit

OKLAHOMA CITY – The House of Representatives maintained a modified affordable housing tax credit program by passing House Bill 2760 on Thursday.

To help balance the $1.4 billion budget hole projected for Fiscal Year 2021, a number of areas of state spending were modified. In HB 2760, the State Affordable Housing Tax Credit was maintained by reducing the limit on new 10-year tax credits issued to qualified homebuilders from $4 million a year to $2 million a year, saving the state $110 million over the next decade.

“When you’re facing a 17% budget hole, difficult decisions get made that can be reevaluated when revenues return. This is one of those cases,” said House Appropriations and Budget Vice Chairman Kyle Hilbert, R-Bristow. “This program will be able to maintain operations under a reduced credit amount until it can be reevaluated when state revenues rebound.”

The state Incentive Evaluation Commission recommended the credit be modified after finding it had not yet produced a positive return on investment for the state.

“Legislators had to decide how to fund core services in a pandemic, and we did that by making modifications such as this one,” Hilbert said. “I recognize this is a topic that will need to continue to be discussed, and I thank my colleagues for their honest debate on this bill. I look forward to working with both sides of the aisle to examine better ways to assist impoverished communities than giving tax credits to developers.”

HB 2760 was part of the FY 2021 budget agreement and it now heads to the Senate.

House Democrats Vote in Block against Cut to Affordable Housing Credit 

OKLAHOMA CITY -- The Oklahoma House Democratic Caucus voted unanimously against legislation that jeopardizes affordable housing throughout Oklahoma.

House Bill 2760, which passed 59 to 41, would reduce the total annual credit for the annual cap for the Oklahoma Affordable Housing Act from $4 million to $2 million over the next ten years.

“Throughout the debate and the questions on this bill, it was reiterated how this credit successfully encourages builders to build affordable housing,” said Rep. Monroe Nichols, D-Tulsa. “Yet, it’s one of the first ones we looked at to fill this year’s budget hole.”

During debate on the bill, Nichols pointed out that when looking at needs versus wants, the Oklahoma Film Enhancement Rebate Program would have been a better place to look.

“We are taking away tax credits for affordable housing, which supports thousands of Oklahomans, while maintaining an $8 million credit to help rich people from out of state get richer,” Nichols said. “As legislators, we should be focusing more on affordable housing units being built in our state before making mortgage payments on mansions in the Hollywood Hills.”

State Rep. Trish Ranson, D-Stillwater, spoke about real problems in her community and how limiting the credit could negatively impact her constituents.

“Stillwater residents already have to compete with students, who often pay a higher rent, to find affordable housing,” Ranson said. “I fear decreasing this credit would make it harder to access affordable housing in our community.”

House Minority Leader Emily Virgin, D-Norman, shared her caucus’ disagreement with this particular method to fill the current budget hole.

“There are lots of cuts and credits that our caucus would like to look at to fill this budget hole,” Virgin said. “Affordable housing is not one of them. One of the most interesting parts of the bill presentation was when the presenter said that the Republican caucus has been looking at this stream of revenue for months. It is frustrating that the GOP, whether it’s the governor or legislative leadership, continues to use this pandemic to achieve political goals.”

HB2760 is now eligible to be heard in the Senate.


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