Shelter funding plan stripped of fee on cities lacking affordable housing

SALT LAKE CITY — After some final-hour negotiations, a bill that would have required cities lacking affordable housing to help pay for homeless shelters in other cities was drastically altered on the Senate floor Wednesday and got final approval from the House.

But it still accomplishes the same goal: funding half of the three new homeless resource centers’ annual operation costs. The bill now goes to Gov. Gary Herbert for consideration.

Before it was substituted, HB462 would have fined Utah cities and counties having less than a statewide average of affordable housing to help pay for the operations and maintenance of new homeless resource centers.

But it was changed Wednesday on the Senate floor to simply allocate $6.6 million from the state’s general fund, stripping from the bill the formula to pull sales tax dollars from cities based on population size and affordable housing stock. The House later Wednesday concurred with that change.

Initially, HB462 would have allocated $3.3 million a year in state money and capture another $3.3 million a year in sales tax revenue from cities and counties to help pay for ongoing operating costs of the three new homeless resource centers, estimated to be about $13 million a year. The nonprofit in charge of the facilities, Shelter the Homeless, would be required to fundraise for the rest.

Cities that currently host or are slated to host shelters — Salt Lake City, South Salt Lake, Midvale, Ogden and St. George — would have been exempt.

That form of the bill was meant to incentivize cities to contribute to affordable and low-income housing stock to prevent Utahns from becoming homeless, the bill’s sponsor, Rep. Steve Eliason, R-Sandy, has said.

Senate co-sponsor Sen. Todd Weiler, R-Woods Cross, said changes were made to address concerns with the bill.

"This is the compromise that has been struck," Weiler said.

Representatives from the Utah League of Cities and Towns opposed HB462, worried it would unfairly punish cities for a housing market failure and use city funds for privately run facilities.

"Cities should not have to pay for operation and maintenance of homeless resource centers or any type of nonprofit facilities, and we appreciate the Legislature recognizes that and changed HB462," said Cameron Diehl, the league’s executive director. "We also recognize cities have a part to play in addressing homelessness."

HB462 has been considered a must-pass bill among political heavyweights, including House Speaker Greg Hughes, R-Draper, who has called it "critical" to the efforts to reform the state’s homeless system.

Salt Lake County Mayor Ben McAdams has also said he’d pull his support of the South Salt Lake center, currently slated for groundbreaking this spring, if a bill to help mitigate costs and impact of the shelters doesn’t pass.

Meanwhile Wednesday, another bill meant to mitigate the impact of the homeless resource centers by using city sales tax money to help pay for police and fire needs for host cities awaited action on the House floor.

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