Safety net must be strengthened

August 28, 2017 |

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Editorial| Our View

Safety net must be strengthened Posted August 28, 2017 August 28, 2017 About three months ago, President Donald Trump’s team released its rst full budget proposal, which takes a blade to programs focused on science and research, the arts and — most worrisome to many bare- bones nonpro ts — social welfare programs.

While some White House wish-list items will likely fall by the wayside, the $4.1 trillion proposal does signal priorities. In this case the biggest increase would go to the military, with the Department of Defense’s budget bumping up by 10 percent to $574.5 billion. Among the wounded would be the Department of of Housing and Urban Development, seeing a 13 percent budget drop to $40.7 billion.

The new administration’s signal is sending shivers through Hawaii’s nonpro t community. Statewide, there are about 7,440 tax-exempt 501(c)(3) organizations, 28 percent of which focus on human services. The next-largest subsets are education and arts, both 15 percent; religion-based, 13 percent; public and societal bene t, 10 percent; and health care, 8 percent, according to IRS records.

A state survey conducted a few years ago found that slightly more than half had cash readily available for three months or less; and 22 percent reported that if funding suddenly dried up, their reserves would tap out within one month.

On Thursday, the Hawaii Community Foundation brought together over 200 island nonpro ts for a look at potential outcomes tied to the 2018 scal year. One promising coping strategy: plans are in the works to create a nonpartisan “Hawaii State Budget and Policy Center” at the Hawaii Appleseed Center for Law and Economic Justice to provide data to help guide policy decisions.

Hawaii would be the 43rd state to establish such a center in tandem with the Washington, D.C.-based Center on Budget and Policy Priorities. The institute analyzes budgetary priorities, zooming in on how choices a ect low-income Americans. It was founded in 1981 in response to President Ronald Reagan’s rst proposed budget, which included tax and budget cuts that targeted safety-net programs such as food stamps and Medicaid.

Nonpro ts now bracing for a drop of the budget ax are looking to local and state government for help. The proposed center could help assess need. Also, we must step up scrutiny of grants-in-aid funding practices conducted by the City Council and state Legislature.

Honolulu’s grants-in-aid is set through a City Charter amendment, approved by voters in 2012. It reserves one-half of 1 percent of all city general fund collections for nonpro ts. With it comes a thorough vetting process by the seven-member Grants in Aid Advisory Commission — and a grant limit of $125,000 per request.

Last year, some Council members unsuccessfully angled to tack on $2.16 million for 23 agencies above the $6.1 million already set aside. The Council must continue to ensure all nonpro t grants undergo commission vetting rather than being inserted elsewhere in budget as pet projects.

The same sort of level playing eld must be in place at the state Capitol. Lawmakers must do away with a practice that allows even rare cases of grant-in-aid funding to go to for-pro t applicants.

This year’s $30 million funding hit a snag when state senators included on the list a $605,000 grant for a for-pro t company on Hawaii island. In previous years, for-pro t Navatek Ltd., Navatek Boat Builders and Gilad Productions Ltd. were among the recipients. Drawn from taxpayer dollars, grants-in-aid funding must go only to nonpro ts that provide community bene ts.

The Hawaii Community Foundation and others are particularly worried about proposed cuts to Medicaid, which currently funds health insurance for 300,000 island residents; federal rental assistance, which provided $233 million last year to more than 20,000 low-income households; and the federal Supplemental Nutrition Assistance Program, which helped 1 in 8 residents get food in scal year 2016.

Should the ax fall hard, local and state government must be prepared to quickly and e ciently assess need and absorb some of the lost funding.

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