Pennsylvania’s failure to pass a budget has caused many social service agencies that rely on state funding to scramble to keep the lights on.
To determine the local impact of the state’s budget impasse, Berks County Community Foundation surveyed nonprofit organizations from Nov. 9 to Nov. 11, 2015, and determined that the agencies that have been affected the most are those that provide human services, homelessness prevention, food for those in need, shelter for domestic violence victims, disability services, among others.
To weather the crisis, eight agencies that provide those types of services have borrowed $2,980,500, or an average of $372,562 each. Those agencies represent only a portion of the nonprofits that are turning to financial alternatives to get by at this time. Unfortunately, many agencies are so focused on staying afloat that they could not devote resources to answering the survey, so the data is incomplete, a press release states.
“It’s not something that I think the County of Berks can do much to address,” Kevin K. Murphy, community foundation president, told The Mercury on Monday. “This is just a failure of the Legislature and the Wolf administration to do their jobs and pass a budget.”
It should be noted that past experience with budget failures prompted some agencies to be relatively well-prepared to deal with this crisis. The community foundation’s survey found that several local nonprofit organizations have been able to use reserve funds, lines of credit and other means to survive.
Other agencies, though, were not as prepared. If the state budget crisis is not resolved soon, 11 human service agencies in Berks County will be unable to continue programs for more than 25,000 people per month, the release states.
Some agencies are already reducing or temporarily ceasing services, laying off employees (a total of 107 employees at just six of the agencies that have already begun layoffs), reducing staff hours, delaying payments to vendors, and cutting employees’ pay, the release states.
In fact, the community foundation has joined with many Pennsylvania organizations in a call for permanent institutional reforms that will include, in the event of a future budget impasse, that human services continue to be funded and lawmakers go without pay until an agreement is reached, the release states.
Social services agencies are already working at capacity, said Jason Brudereck, a spokesman for the community foundation, leaving their clients with nowhere to turn.
“They don’t have partners to turn to when they’re at capacity with no money to spend,” he said, adding they can’t refer clients to other agencies for help. “Everyone is at capacity. The network of social services is breaking down.”
To further illustrate how bad things have gotten, the community foundation’s survey collected comments from some respondents, who were not identified, that have been directly impacted by the impasse:
- * “We would have to curtail 75 percent of our services if the budget impasse continues beyond January.”
* “Children and youth in desperate need to be placed out of an abusive/neglected environment are (kept) in an unhealthy situation through no fault of their own.”
Many agencies have been indirectly impacted. Here are some comments from them that the community foundation also collected:
* “We have been impacted indirectly by organizations that we normally refer clients to that are not available to support the current client needs due to lack of funds, lack of space, or lack of ability to conduct business due to the budget impasse.”
* “We’re unable to meet with state agencies due to their travel ban.”
The snowball effect, Murphy said, is leaving social service agencies unable to deliver services to their clients. While funding may be received retroactively from the state, once a new budget is passed, “services can’t be retroactive.”
For those nonprofits looking for money, Brudereck said there is a loan program available with a $2 million pool. About $1 million of that money has been earmarked so far.
“There is some money left if nonprofits are looking for loans,” he said.
Even if this impasse is resolved immediately, it will take weeks or perhaps months for all owed funds to be disbursed by the state, the release states. It will take time for these local nonprofit agencies to recover and it will cost them considerable funds to pay back interest on money they have had to borrow to keep their doors open.
“It’s hard to begin to predict when this will come to a conclusion,” Murphy said. “But it’s doing real damage.”
