Lawmakers have until the end of the month to pass a budget. In the run-up to that deadline, nonprofits across the state are taking stock of the shock waves they still feel from last year’s nine-month budget impasse.
The toll was both human and monetary for organizations like the Women’s Center of Montgomery County.
“You have somebody in an abusive relationship, we have relocation funds that we can help them move, get a new home, get bus fare to leave their abuser,” said Maria Macaluso, executive director of the group. “But, because we had no cash flow … we had to say ‘No’ to all those people.”
She said her group turned away eight to 10 people. It also lost one staff person, who was only recently replaced. In order to keep operating, the Women’s Center took out a loan, and it’s now on the hook to pay off the interest.
Macaluso’s story is typical.
A new survey says nonprofit organizations that carry out social services in Pennsylvania still owe interest from loans taken out during a protracted state government budget stalemate.
The survey released last week comes from the Greater Pittsburgh Nonprofit Partnership, the United Way of Pennsylvania, and the Pennsylvania Association of Nonprofit Organizations.
A total of 176 nonprofits responded to the survey, which also found that the organizations haven’t filled or restored about half of the 380 full-time positions that were eliminated or affected during the budget fight.
The impact ranged from the severe to the inconvenient, but even groups that had enough cash to survive had to change how they operate.
Alan Edelstein, executive director of the Family and Community Service of Delaware County, said his group survived on its reserve cash. However, a state program that usually helped stock its food pantry was not running without the budget.
“That hurt folks because there were fewer food commodities that were made available,” he said.
All told, the survey counted 17,100 people who were turned away or received reduced services during the nine-month stalemate.
“I think the compelling piece of that is these were 17,000 clients that were served by only 22 organizations,” said Anne Gingerich, executive director of the Pennsylvania Association of Nonprofit Organizations. “If more people had participated in the survey, then that number would only increase.”
Organizations also reported taking out loans, tapping reserves and delaying vendor payments to the tune of $172 million. Some organizations owe more than $530,000 in interest collectively. While Gov. Tom Wolf attempted to introduce a provision to defray that interest, it did not appear in the final budget, which became law.
Even when the state began to pay out funds in December, nonprofits went from famine to feast and struggled to spend a year’s worth of money in six months or less.
“Otherwise, it looks like they didn’t need those dollars to begin with,” said Gingerich. Some agencies reported they are negotiating an extension of their contracts with the Department of Human Services, so they have more time to spend down those dollars or risk losing them.
Lawmakers can do something to make sure this doesn’t happen again, she said: Pass a budget. “It sounds like a simple thing to ask, but it’s pretty critical.”
If budget negotiations stretch beyond June 30, her group and others representing nonprofits are exploring their legislation options to make sure they don’t get hurt again.
The Associated Press contributed to this report.