Live United | United Way

Headlines
 
Nonprofits brace for funds shortfall
If federal aid doesn't come through, state layoffs and budget cuts would hits agencies hard.

Thursday, July 01, 2010

BY KARI ANDREN kandren@patriot-news.com

State lawmakers and Gov. Ed Rendell reached a budget agreement much earlier than usual this year, but that doesn't mean nonprofit groups are spared the uncertainty of how much money they will receive.

The spending plan approved by lawmakers Wednesday -- and awaiting Rendell's signature -- assumes that Congress will approve $850 million in additional federal Medicaid funds for Pennsylvania.

Nonprofit groups said Wednesday they aren't counting on that money coming through. For many groups, cuts they already face could be amplified or programs that were spared cuts could wind up on the chopping block this year if federal funds aren't approved.


Tony Ross, president of the United Way of Pennsylvania, said nonprofit organizations "have to remain in a wait-and-see mode," holding their breath to learn if Congress will approve the funds.

Without the federal Medicaid money, Rendell and lawmakers would have to make an additional $850 million in cuts to the 2010-2011 budget of about $28 billion.

Rendell has said that under the budget, about 1,000 state employee layoffs would be necessary. But if the federal money does not come through, there could be as many as 20,000 layoffs as funding cuts trickle down to the county and municipal levels, he said.

More people being laid off means more pressure on nonprofit groups that already are stretching every dollar they receive.

"Any cuts when you're serving more families with less money are difficult to deal with," said Megan Shreve, executive director of South Central Community Action Programs, based in Gettysburg. "We're stuck between a rock and a hard place."

Shreve said her organization served more families in the past year than in previous years while working with 68 fewer people. She had to lay off workers last year because of funding cuts.

Among the programs faced with state funding cuts that most dramatically affect nonprofit groups are those that deal with autism, mental and behavioral health, domestic violence and rape crisis.

The YWCA of Greater Harrisburg, which provides a variety of services, would be forced to cut spending to achieve its mission of providing the services people need to live on their own or get back on their feet, said CEO Tina Nixon.

She said she is sorting through this year's budget to determine its impact on the YWCA but added that it's the idea of unknown cuts that could come later that makes her uneasy.

"I think we're all, under the surface, a little worried, but we understand we have no control over this," Nixon said. "We will do whatever we can to make sure we're available to individuals who are in a crisis situation. If we have to look at cutting supplies, cutting maintenance ... or not getting the grass cut to [offer] those services, that's something we're poised to do."

Human-service agencies were among a chorus of labor unions and other groups that called on lawmakers to impose new or increased taxes rather than cut spending to balance the state budget.

Many advocated for a severance tax on natural gas drilling, a tax on smokeless tobacco and changing some business tax policies to generate revenue. Lawmakers agreed to take up the Marcellus Shale natural gas tax this fall with the intention of imposing it in January.

"It's dumbfounding to me that we would remain the only state in the nation not to benefit from additional revenue from cigars and smokeless tobacco while cutting protective services to abused women and children," said Peg Dierkers, executive director of the Pennsylvania Coalition Against Domestic Violence.

Dierkers said funding cuts in domestic violence services, homeless assistance and the Human Services Development Fund make her group's mission especially difficult.

"Local domestic violence programs and their community partners rely on an extremely tightly woven and fraying patchwork of funding. You pull any one thread, it leaves a gaping hole with nothing to fill it," Dierkers said. "When you pull three threads ... it threatens the whole tapestry of safety and protections for Pennsylvanians in crisis."

While cuts in state funding pose challenges to many nonprofit groups, several pointed to the resolution of the budget as being the one bright spot in a hard economic year.

"The certainty that at least this is not going to go 100 days is really critical," Ross said. "The real impact that came on social services and nonprofits last year helped this process forward."