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WILKES-BARRE — The Pennsylvania budget impasse, now in its fifth month, is adversely affecting area nonprofits with many of them scrambling to borrow money to provide services to community members most in need: the poor, the homeless and those struggling with addiction and mental illness.
Nonprofit executives say that, although they have hung in this long, the next several weeks will be key, with cutbacks, layoffs and further borrowing necessary if state government leaders do not pass a spending plan for fiscal year 2015-16, which began July 1. Because there is no finalized budget, the state is not forwarding grants and other subsidies to nonprofits.
Gov. Tom Wolf said this week that a broad outline on a budget deal with Republican leaders is in place and he is hopeful a budget will be in place by Thanksgiving, but key legislative approvals still are needed.
On pins, needles
Bill Jones, executive director of the United Way Wyoming Valley, believes Pennsylvania’s budget impasse has gone on much too long, but is encouraged by recent reports that leaders of both parties are making progress in Harrisburg.
“The nonprofit community has been on pins and needles as they continue to serve those in need,” he said. “No one knows quite what the budget will look like after it is finalized.”
Jones said the United Way has advocated for programs, including pre-K programs, consistent with the organization’s “Poverty to Possibility” movement.
Once the budget is passed, Jones hopes the state money will reach the nonprofits quickly so as to minimize interruption in services.
Emergency services
Janet MacKay, executive director of the Victims Resource Center, shares Jones’ hope.
The center, which assists victims of crime, gets most of its funding from three sources: the Pennsylvania Commission on Crime and Delinquency, the Coalition against Rape and the Coalition against Domestic Violence, all impacted by the delay.
Services include a 24-hour hotline, support groups, counseling and advocacy for victims. The center also provides numerous educational programs for students of all ages, professionals and community groups.
“We provide crisis services to those who are victimized by crime,” she said. “They need someone who can immediately provide emotional support, simply being present with them and offering them options to begin recovery. That assistance cannot be delayed and cannot be shut down, its 24/7 with our staff going to emergency rooms, responding to child abuse, providing immediate assistance.”
MacKay said in the absence of state funding in the last several months, it was necessary for the center to take out a $100,000 loan from a local bank, with no interest accruing for six months. That money, she said, already has been spent.
With a budget of $1.3 million, that debt is sizable and will soon incur interest.
“We have other loans in mind in case passage of the budget continues to be delayed,” said MacKay, “but those loans will immediately begin accruing interest.”
MacKay, who had served as the agency’s director since 1996, said she has “never seen this before.”
“In 2009, there was a delay, but that budget passed in October,” she said.
She said the agency has not reduced services.
“In spite of minimal money coming in,” she said, “there is a real immediate need by our clients.”
MacKay said the office is operating with fixed supplies and delayed expense reimbursement.
“We weren’t able to mail out our newsletter; instead, we emailed it,” she said.
Still, she said her concern is a short-term frustration, rather than a long-term fear.
“We are an agency that deals with crisis,” she said. “We shouldn’t have to operate in one.”
Addiction treatment
Jason Harlen, Wyoming Valley Alcohol and Drug Services executive director, said the agency has been fiscally unsettled during the budget stalemate having to access a line of credit of $200,000.
“Many of our clients come to us uninsured or under insured. It is in that situation that we access state funding,” he said. “We have continued to provide them with services even though that funding has not been available.”
Harlen said he believed those monies will be recouped upon resolution of the impasse.
With an annual budget of $1.9 million and 35 employees, about 20 percent comes from the state, which Harlen said is significant.
He said the agency was managing, but that “the bills are behind and the cash flow is terrible.”
“I would hope that those in Harrisburg would have met in the middle before this,” said Harlen. “I certainly hope this is resolved soon.”
Cautiously optimistic
Ron Evans, executive director of the Wyoming Valley Catholic Social Services, said because of the diversity of funding, the agency is is keeping its head about water.
With a $1.5 million line of credit, the agency has been able to continue to provide a multitude of social services. Still as the budget impasse continues, the organization is starting to show signs of strain.
“Now, we are getting deeper into our line of credit,” he said. “If this is not resolved in the next four weeks, we’re going to have some issues.”
Evans said this is the longest budget standoff in his memory.
“This has gone on a very long time, a very long time,” he said. “It’s challenging even for an organization as large as Catholic Social Services.”
His approach?
“Let’s put it this way, optimistic, but cautiously optimistic,” he said.
Critical needs
Michael Zimmerman, chief executive officer of Family Service Association of Northeastern Pennsylvania, expressed frustration with the budget stalemate.
“We’ve had to utilize a $120,000 line of credit,” he said. “This creates stress for the staff.”
Zimmerman said the provision of evidence based services has continued, but expressed concerns for the future.
“If this continues,” he said, “it’s possible that we will be furloughing staff as soon as January, resulting in diminishing services.”
Keeping focused
Gene Brady, executive director of the Commission on Economic Opportunity, expressed guarded optimism in regard to the state budget.
Brady said with 20 percent of a $16 million budget coming from the state, it has been necessary to utilize a $600,000 loan in order to keep the agency running effectively.
Some programs, have remained unfunded or underfunded during the standoff.
For example, funds from the Pennsylvania food purchase program were not timely received, leaving a gap in the agency’s food bank.
Having been with the organization for 36 years, Brady said he had “never seen anything like this.”
He said he was keeping his fingers crossed that the budget woes would be resolved.
“We want the budget problems to be resolved quickly,” he said. “So we can move forward doing the work.”
