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| State survey documents the negative impact of budget impasse on nonprofits and social services. |
| Social Safety Net and Economy Suffer From Lack of Timely Support HARRISBURG, August 21 -- Several nonprofit organizations released the results of a statewide survey that documents the impact of the state budget impasse on the Commonwealth's nonprofit sector and social services system. The survey conducted by United Way of Pennsylvania (UWP) during the week of August 17 includes responses from over 500 organizations that serve all of Pennsylvania's 67 counties. "Most Pennsylvanians are painfully aware that budget negotiations have stood at an impasse since the passage of the Stopgap Budget," said UWP President Tony Ross. "State contractors are entering their second month of not being paid for their services. In many cases, "contractors" means nonprofits, especially health and human service providers who usually maintain only a few months of financial reserves." The over 500 organizations who comprise the survey alone account for over $100 million in state contracts and over $50 million in local and county contracts. According to the survey, 64 percent of agencies are relying on reserves to continue operations while 28 percent are utilizing lines of credit. The remaining agencies have no reserves or are relying on donations and fees to continue services. The lack of a state budget is having a devastating impact on the Commonwealth's nonprofit sector and human services infrastructure. Some 69 percent of respondents report that they have already or will need to reduce or eliminate services sometime before September 30, 2009. Compounded by the recession, many institutions such as local governments and hospitals, elder care providers and non-profit organizations, community colleges, schools, and others - have been left with dramatically reduced resources to meet growing demand. "Delaying the passage of the State budget exacerbates this problem by leaving these institutions with even fewer resources, and leaves more citizens without services when they most need them," said Sharon Ward, Executive Director of the Pennsylvania Budget and Policy Center. Furthermore, Pennsylvania's charitable organizations are a major economic force in the state. According to some economists, nonprofit expenditures have a greater effect on the economy at the state and local levels than hotels, legal services or restaurants, because most of their spending is for wages and rents, which stay in the local communities across the state. "While nonprofits are not in the business of financial gain," said David Ross, Public Policy Director for the Pennsylvania Association of Nonprofit Organizations. "They are still businesses in every other sense -- they employ people, they take in revenues, they produce goods and services and contribute in significant ways to Pennsylvania's economic stability and growth." In addition, nonprofits generally reduce the tax burden on individuals and businesses by providing charitable services that would otherwise be provided by government. "Loss of nonprofits and their employees will also mean lost revenue to state and local governments through levies such as income taxes, property taxes, occupational taxes and reduced sales for a variety of businesses from retail to home sales," said Bruce Grim, Associate Director of the Pennsylvania Council of Children, Youth and Family Services According to the report, 25 percent of respondents have or plan to implement layoffs. In addition, 35 percent of respondents report delaying or missing payments to local vendors. Results included: • 34 percent reporting missing rent/mortgage payment. • 33 percent report missing a utility payment • 50 percent delayed or postponed repairs • 63 percent reduced the amount of supplies "Most organizations' budgets rely on monetary donations which have declined in the difficult economy and government grants," said Tony Ross. "As a result of the impasse, several agencies are and continue to be only a few weeks shy from shutting their doors." Media Contacts: United Way - Tony Ross, (717) 238-7365 or tony@uwp.org PANO - David Ross, (717) 236-8584 x1009 or david@pano.org Pennsylvania Budget and Policy Center - Sharon Ward, (717) 255-7156 or ward@pennbpc.org Pennsylvania Council of Children, Youth and Family Services - Bruce Grim, (717) 651-1725 or bruceg@pccyfs.org -30- |
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