February 2015
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AGENCY OF THE MONTH Eastside House
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New York Nonprofit Press PO Box 338 New York Nonprofit Press Chatham, NY 12037 PO Box 338 Chatham, NY 12037
Vol. 14 . Issue 1 www.nynp.biz
A Drop in the Bucket by Fred Scaglione
There are a lot of things in Governor Andrew Cuomo’s FY2016 Executive Budget proposal for the human services community to like. Individual program sectors can point to various initiatives -- proposals to increase the State’s minimum wage and raise the age at which youth are considered adults in the criminal justice system, creation of a new NYNY IV Supportive Housing program, and others -- as important ways to address the needs of vulnerable New Yorkers. However, when it comes to a key issue impacting the nonprofit human service system as a whole – funds to address years of fiscal neglect through failure to provide regular Cost of Living Adjustments – advocates and providers are united in their view that the Governor’s Budget falls woefully short. It has been six full years since nonprofit service providers have received Cost of Living Adjustments, i.e real COLAs that provide revenues to both adjust employee salaries and address all the other increasing costs of doing business, such as rent, utilities, essential new technologies, health care expenses, etc. For the first five of those years, FY2009-10 through FY2013-14, nonprofits saw the purchasing power of their budgets decrease by approximately 12% -- or $354 million. Last year, for the current FY2014-15 fiscal year which is about to end on March 31st, Governor Cuomo again had proposed no COLA adjustment whatsoever. However, the legislature made salary increases for the “lowest paid” direct service employees a priority and included $13 million in order to fund a 2% adjustment for the last quarter of the fiscal year – January 1 through March 31st. While nonprofit executives are very appreciative of the legislature’s support and grateful for the opportunity to raise salaries for any members their workforce, it is worth noting
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that this very narrowly focused, part-year increment represented just 16% of what a real COLA would have cost -- $107 million – based on the Division of Budget’s own estimates. So, by our calculations that adds another $94 million hit the sector took compared to where they should have been. And, last year’s legislative initiative also proposed carrying forward the initial January 1st 2% increase into FY2015-16, adding another full year 2% increase on April 1st for Direct Care workers plus giving a full-year April 1st 2% increase for clinical staff. The tab for this FY2015-16 “COLA” has been included by the Governor in his new Executive Budget proposal. In both of these cases, however, these “faux-COLAs” provide no funding for the many other kinds of staff it takes to run an agency – maintenance staff, billing clerks, drivers, administrative staff of all types, etc. Nor do they provide any funding for agencies to cover the rising costs of non-personnelrelated expenses.
Nonprofit Infrastructure Fund
After years of being rebuffed by the Governor on requests for COLAs, nonprofit sector leaders changed tactics this year. The Human Services Council, United Neighborhood Houses and UJA-Federation began advocating early for creation of a new Nonprofit Human Services Relief Fund. The request included creation of a Nonprofit Infrastructure Fund that would be capitalized by $500 million of the estimated $5.4 billion State surplus resulting from various litigation settlements with major banks. It would make one-time investments in human service provider agencies to support specific projects involving core facilities, new technology, improvements in outcomes and performance, facilitation of mergers and partnerships, program innovation, and pay for success contracts. The request also included another $50 million to capitalize an existing Contract Cash Flow Stabilization Fund that would provide interest free revolving cash fund loans to nonprofits whose state contracts and payments were delayed. Surprisingly, the Governor picked up on the sector’s proposal and included funding for a Nonprofit Infrastructure Capital Investment Fund in his Ten-Point Plan to Fight Poverty. Unfortunately, however, the Governor – who likes to think big in so many areas – once again thought small when it comes to the nonprofit sector. His proposal included only $50 million – just one-tenth of the amount requested by human service advocates. “While we appreciate these allocations, they are hardly enough given the size of the nonprofit human
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