Dear DHCD Partner:

On October 23, Governor Martin O'Malley released a Cost of Delay budget, which itemizes cuts that will be required to balance the State's Fiscal Year 2009 budget if the Special Legislative Session that begins today fails to result in a comprehensive budget package to address the State's $1.7 billion structural deficit.

The Cost of Delay budget has very serious implications for the Department of Housing and Community Development (DHCD). Now is a time when DHCD has become ever more responsive to those who need affordable housing, and those who are grappling with delinquent mortgage payments that may lead to loss of their homes. While the Department closed a record number of mortgage loans in FY 2007 - 4,000, totaling close to $1 billion - we may be faced with cutting some other programs that mean a great deal to our partners in the community if a budget package is not approved. Our Governor has worked hard to keep the State's fiscal house in order without impacting programs, and, with support from our Statewide community and business partners, we will be able to maintain a budget that keeps performing well for Maryland's citizens.

Capital PAYGO General Funds (GF) are specifically at risk if a new budget package that increases revenue is not approved - these are the GF amounts that would be lost:

Community Legacy	$8,000,000
Rental Housing Programs	$6,050,000
Homeownership Programs	$900,000
Special Loans Programs	$900,000
Total GF PAYGO	$15,850,000

Our General Fund Operating grant programs also are at risk as follows:

Many communities from the Eastern Shore to Western Maryland will feel the effects of these cuts. From the Community Legacy program to the Rental Allowance Program, communities and people will suffer from a lack of resources to improve their lives and their neighborhoods.

Governor O'Malley has outlined plans to close Maryland's structural deficit by reforming Maryland's income tax structure to make it fairer for working families, closing corporate tax loopholes so that all businesses pay their fair share, reducing the State property tax and reducing spending growth by more than a billion dollars. The Governor also has proposed expanding the sales tax. Under the Governor's proposed reforms to the State's income tax, reductions in the state property tax and sales tax proposals, the Maryland Department of Budget and Management estimates that 83 percent of Marylanders will pay less overall.

You are aware that Maryland is the wealthiest state in the United States, according to Census Bureau records. We live in a State that cannot afford to do less than our best for those who need it most. Maryland's communities will feel the effect of these cuts. That is why I am asking you to support Governor O'Malley's efforts to find a timely solution for the State deficit. Since you are one of our partners, I am sharing this information so that you will be well informed of the impact this could have on DHCD and those we serve. I join with Governor Martin O'Malley who said, "The cost of delay is simply too great for Maryland's families and local jurisdictions."

Please contact your legislators and encourage them to approve a budget that will move Maryland forward without sacrificing the housing and community revitalization programs that touch so many lives across the State.

Thank You.

Sincerely,

Raymond A. Skinner
Secretary