On April 17, the Arizona Legislature passed an amended FY 2008 budget, which Governor Napolitano then signed. The Department of Housing has been tapped for significant financial adjustments totaling $13.3 million in budget sweeps to three of our agency funds for the current fiscal year. While these sweeps pose significant cuts to an agency of this size, ADOH had planned for this inevitability and existing projects and programs should not be affected by the FY2008 sweeps.
The largest sweep will be in the Housing Trust Fund. The reduction of $10.2 million in our most flexible funding source will mean that no new funding commitments will be possible before our annual transfer of funds from Unclaimed Property arrive in mid-July. While no existing HTF-funded projects will be affected by this sweep, ADOH will remain unsure as to how much HTF funding will be available in the next fiscal year until decisions on the FY2009 budget are finalized.
The second fund affected by the legislative sweeps is the Housing Program Fund. The primary source of our operating budget was cut by $2,775,900. This is a significant sweep to the agency’s operating budget and will require prudent tightening of the agency’s operating expenses.
The third fund affected is the $364,000 sweep of the Housing Development Fund. Originally created in the 1990s as a set aside to assist employees in the Department of Corrections, it is sometimes referred to as the ‘Prison City Development Fund’. This amount represents a full sweep to that fund’s balance and will effectively sunset this program.
The agency remains concerned about possible fund sweeps in FY2009 and thanks the Housing community for its ongoing support of the agency’s budget.