BUDGET FOIBLES

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FYI: The Department of Housing and Urban Development sent a letter yesterday to Public Housing Authority directors aiming to give them “facts rather than rumor or misinformation” about recent restrictions on 2003 budgets. Last week, HUD told PHAs with fiscal years beginning January 1 to operate with budgets at only 70 percent the size of their first-quarter 2002 budgets. In yesterday’s letter, HUD explained that it is only being cautious for now, given a still-unresolved $250 million shortage for the fourth quarter of 2002 and the fact that Congress has yet to pass a fiscal year 2003 budget. When Congress finally hands out 2003 funds, the letter explained, HUD will rework first-quarter operating budgets, raising them to 90 percent of what each PHA is eligible to receive. The letter stresses that HUD rarely offers 100 percent funding–and argues that doing so in 2002 is precisely what created the current budget shortfall, pinning the blame on the previous administration’s “inadvisable management practices.” [1/16/03]