You asked (1) what dedicated revenue sources are used for existing housing trust funds in other jurisdictions, (2) what special purpose trust funds already exist in Connecticut (and what are their dedicated revenue sources), and (3) which revenue sources used to support housing trust funds elsewhere are available in Connecticut and how much would be raised annually in Connecticut through a comparable levy.

We are gathering information to respond to question three and will update this report when we receive it.

SUMMARY

Other jurisdictions use non-lapsing revenues from dedicated sources, including public funding from taxes, fees, or loan repayments for housing trust funds. Connecticut has several non-housing special purpose trust funds that are described below. (Although Connecticut has a tax credit based housing trust fund, it has not had a more typical housing trust fund since 1994. )

HOUSING TRUST FUNDS

Housing trust funds are typically established to serve a purpose not already addressed by existing housing agencies and programs. This usually involves grants or no-interest loans for low-income housing projects or other housing needs for the poorest residents. Grants and no-interest loans from the trusts often go to the poorest residents as housing finance agencies are already set up to serve moderate- and middle-income residents. Trust funds are often established and administered by the agency that already handles federal housing programs (like HOME).

Housing trusts usually have a dedicated, non-lapsing source of income. This may be a portion of the state’s real estate transfer tax or document recording fees. It may also be a fee imposed on developers or some other designated source. OLR Report 2000-R-0275, a copy of which is attached, has more information on housing trust funds.

Revenue Sources

Normally, governing bodies at the state or local level pass legislation or an ordinance that increases an existing revenue source, such as a real estate transfer tax, with the legislation committing the additional revenue to the housing trust fund. Other methods exist, however. The Louisiana Housing Trust Fund, for example, uses revenue from the state’s voluntary income tax check off dedicated to the housing trust fund, according to the Center for Community Change (CCC), a Washington, DC, based organization committed to reducing poverty and rebuilding low-income communities. CCC’s website is www. communitychange. org.

CONNECTICUT SPECIAL PURPOSE TRUST FUNDS

An electronic search of the Connecticut General Statutes yielded three special purpose trust funds with a dedicated source of funding. We excluded trusts that are funded by the sale of state bonds, federal grants, or settlements. Table 1 below provides the statutory citation, descriptive title, and dedicated funding source for the three trusts.

Table 1: CT Special Purpose Trust Funds and Their Dedicated Funding Sources

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