Meanwhile, City Council grants for the housing company ($180,000), the organizing wing of ACORN ($20,000), the high school the group runs ($3,500) and the New York Agency for Community Affairs, another ACORN relative ($20,000), are under review, according to Council press secretary Maria Alvarado. That means ACORN's campaigns against education budget cuts, in favor of affordable housing in major redevelopment projects like Willets Point, and for living-wage jobs will operate under tighter constraints, said Ann Sullivan, organizing coordinator for the New York affiliate.
But the scandal’s fallout may be felt deepest in the pocketbooks of low-income New Yorkers. Working with the IRS, ACORN has for the past six years offered free tax preparation in certain neighborhoods. In the wake of the online videos, the IRS dropped ACORN as a partner in its Volunteer Income Tax Assistance program. “In light of recent events, the IRS has decided to terminate its relationship with ACORN,” said Kevin McKeon, spokesman for the IRS New York office. Last year the group prepared 5,436 returns, netting $5.1 million in tax refunds for low-income New Yorkers, much of it in the form of the Earned Income Tax Credit, according to ACORN NY spokesman Jonathan Rosen.
The absence of ACORN's free tax prep will have a big impact, said Sullivan, the organizing coordinator. “That's a lot of families that are not going to get the child tax credit and the earned income tax credit that they are entitled to. That's really millions of dollars not coming back to the community,” she said.
Carlos Rodriguez, a vice president at Food Bank for NYC, agreed. Food Bank handles 80 percent of all free tax preparation work in the city, making it by far the largest provider. Last year Food Bank's 50,000 clients got back a combined $80 million dollars. But Rodriguez said his group and others only scratch the surface of New Yorkers who are eligible for the Earned Income Tax Credit. Greater outreach is crucial, he said, both to ensure low income New Yorkers get the tax refunds they are owed, and to keep them from going to expensive private tax preparers that engage in predatory lending such as refund anticipation loans.
“We really need to do as much free service as possible. We already had lines going around the block. Because of the recession more and more people are becoming income eligible,” Rodriguez said. “It's hard to say exactly what the impact will be [without ACORN]. But we can't afford to be losing anything here in NYC.”
Alex Pollack, a resident fellow at the American Enterprise Institute, offered a market-based analysis of the fallout. “If ACORN disappears, life goes on,” said Pollack. “When one organization makes mistakes or becomes corrupt others arise, some times from the people involved in the original – hopefully the parts that weren't the problem."
NY ACORN also believes life will go on, said Rosen, the spokesman. “I want to stress that NY ACORN is extremely confident that after these reviews are completed, this funding will resume so that the organization can continue to do critical work for low-income families across New York State,” he said.
