Mercer County Housing Authority likely will feel the sting of a federal subsidy shortfall when its new fiscal year begins July 1, said Executive Director L. DeWitt Boosel.

Boosel said he has received no official notification of how much the authority might lose in subsidy, but authorities whose fiscal years began Jan. 1 or late last year are getting only 70 percent of what had been approved previously, he said.

The authority received its January subsidy in the expected amount.

The U.S. Department of Housing and Urban Development blamed the $250 million shortfall on a new operating formula, faulty information systems and the HUD staff's practice of borrowing from future year allocations, according to the Public Housing Authorities Directors Association.

HUD could ask Congress for more funds, but has chosen not to do so, Boosel said, referring to information from housing authority associations.

The shortfall will be spread over all the country's housing authorities, he said.

Based on its 2002 budget, a 70 percent shortfall would mean Mercer County would get $1,660,216, or $553,405 less than it got this year.

"That would have a pretty drastic effect on operations," he said. "We're fairly strong from a financial standpoint. We have good reserves, but this is a pretty good hit. We hope it doesn't play out at this level."

Board President Carol Gurerra said she feared the authority could face job cuts.

Boosel said the authority will set up a contingency plan in case the 70 percent subsidy level comes through. He believes HUD is waiting until the authority submits its 2003-04 budget, which is due in March, before officially notifying it of the subsidy level it will receive.

In the 2002 budget, the federal subsidy accounted for 75 percent of the authority's revenue. The subsidy makes up the difference between what it costs to run public housing and what residents can afford to pay in rent.

Residents pay no more than 30 percent of their income for rent and utilities, and some with no income pay nothing.