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‘It’s Not Like We Can Just Cut Them And They Go Away’

by Hugh McQuaid | Dec 10, 2012 5:26pm
(7) Comments | Commenting has expired
Posted to: Nonprofits

Hugh McQuaid Photo

Gov. Dannel Malloy and Nonprofit Liaison Terry Edelstein

Gov. Dannel P. Malloy has said that everything except raising taxes is on the table as the state moves to close its projected budget deficit. That includes programs which reimburse providers who serve the state’s most vulnerable populations.

That’s a problem for some providers who say they’ve spent decades trimming fat and have nowhere else to cut.

The governor heard as much Monday from Pat Johnson, president of Oak Hill, one of the state’s largest private nonprofit service providers for people with disabilities. Johnson serves on Malloy’s Cabinet on Non-profit Health and Human Services and gave a report on the status of the state reimbursements to providers. What his working group found wasn’t encouraging.

“For the past 10 to 20 years there has been a consistent pattern of underfunding with annual increases of less than 1 percent per year in our state contracts. With fixed cost increases every year, this represents a de facto annual cut,” he said.

Johnson said the nonprofit service provider community has gone years without a cost of living adjustment. When the last COLA increase was granted, gasoline costs were around $1.67 per gallon, he said.

As a result, he said they’ve already been grappling with how to balance their budgets. Two years ago, 43 percent of nonprofit providers were running deficits. Many were dealing with chronic cashflow problems, he said. Johnson said around 72 percent were in danger of going out of business if any event adverse event occurred.

“For the past decades, budgets have essentially been balanced on the backs of our employees, with cuts to wages and benefits, with little or no increases during that time period,” he said.

Johnson said his group was recommending the state cover the costs of the care that’s being provided.

“There’s little likelihood that what we’re currently doing is sustainable,” he said.

After the meeting, Malloy didn’t disagree with the information Johnson gave and acknowledged the providers have been long underfunded. He said his administration was trying to shield social and education services from painful cuts as much as possible.

“I think everything is on the table. In saying that everything is on the table, there’s no doubt that social services and education services are a very high priority of this administration. So we’ll see where we end up in the weeks to come. But my heart goes out to these folks and the hard job that they do in providing levels of services to 500,000 of our Connecticut citizens,” he said.

During the meeting, Malloy told Johnson he wished the economic recovery had been stronger. He blamed some of the lagging economy on last year’s “crazy” debate in Washington over raising the debt ceiling.

The governor said the state’s economy will eventually improve, but in the meantime, he pointed to the state’s reduction of its own workforce by 14.5 percent over the last two years.

“I know pain,” Malloy said. “I’m the victim of it and I’ve inflicted it sometimes, I suppose.”

Malloy said the state needs to be willing to terminate programs that are less effective than others. The cabinet’s work collecting data on the effectiveness of its programs will help the state determine which programs aren’t as effective and put more money toward the ones that are, he said.

Following the meeting, Johnson said any cuts made to nonprofit service providers will be “dramatic and significant.” He said providers were still waiting on specific cuts before they know the full extent of the impact.

“Given the amount of money [Malloy’s asking for] and the fragility of the private sector, the impact will be dramatic, there’s no avoiding that,” he said.

Faced with rising expenses and a fixed income, Johnson said providers are already in a position where they’re paying their employees very little. It’s a phenomenon he said his colleagues have referred to as the “Walmart-ization” of the industry. It has gotten to the point where some of their employees now qualify for assistance programs themselves, he said.

“It will be very difficult for the agencies but, at the end of the day it’s about the people we serve,” he said. “Those are the ones whose services are going to suffer.”

Johnson said the industry already was at a tipping point before the cuts. He said he would like to ask state officials where he should cut. Services for the blind? Programs for the disabled or those with chronic mental illness?

“It’s not like we can just cut them and they go away. These people need services,” he said. “Frankly, I have nothing left to cut.”

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(7) Comments

posted by: newview | December 10, 2012  9:35pm

It’s one thing for these folks: well compensated advocates, administration, leadership, politicians, etc. to arbitrarily underfund these private service agencies, it’s an entirely different reality at the street level where it all happens. 

I can tell you now, it already has, and in time it will be proven more true, the direct consequence of underpaying these employees and these agencies will lead to increased abuses of the very folks that they are there to serve.  It will be financial, it will be through quality of care, reduced employee qualifications, it will be through neglect (not just personal), it will be through the administration of a precedent of understaffed homes and other environments in which folks are repeatedly left at risk.  This is an administrative issue, and it’s unraveling right before our eyes.

The privatization of services and outsourcing of these vulnerable folks to the private sector, granted, is an absolute fiscal nightmare given the return…it is most often measured in subjective terms.  However, that is not to be interpreted as carte blanche to treat folks in communities with a fiscal and administrative institutional mindset.

The people responsible for making assurances that this does not happen are pictured in this article, and they should be held responsible to a higher standard than what they are currently attempting to force feed our citizens on both sides of this mechanism called “quality services”.

You folks need to do an about-face without delay.

posted by: lkulmann | December 10, 2012  11:24pm

The public assistance, child support enforcement, dept of labor and many other agencies responsible for assisting the less fortunate are so dysfunctional that reorganizing would create an influx of funds. There are so many redundencies in paperwork its nauseating. What I think should happen is DDS needs to become an entitlement agency dealing with the medically and psychologically involved…DSS can more of the well/preventive child care issues…keep the 2 pots of money separate…these agencies van absorb all of the unnecessary nonprofit…out there. Too many people doing too many of same jobs…

posted by: sonofduffydyer | December 11, 2012  8:22am

Talk is cheap Governor Malloy.  If you so passionately ‘feel the pain’ of the disabled, poor and those in crisis, why are you throwing them under bus by proposing such massive cuts to non-profit providers?  Action is needed, not empty words.  You are proposing to balance the budget of the state on the backs of the disabled.  This does not sound like a person of character or principle!  Don’t put politics in front of people!

posted by: gompers | December 11, 2012  12:49pm

We engage in a losing argument.  CT has always been a tight-fisted, low spending state.  Last year, CT Economic Quartely wrote a report showing this.  We can only get so much blood from a stone from more “efficiencies.”  What is needed is more revenue.  Restore taxes on the wealthy to 1950 levels and we’ll be able to support decent services to the needy and not starve the provider workforce.

posted by: Joe Eversole | December 11, 2012  2:19pm

How about we look at cutting things that are superfluous before we cut benefits to the disabled.  I am thinking of the “Magic Bus” for starters.  There is 300 million or so out of the budget.  Then, lets look at decreasing the compensation of every Legislature and their Staff.  So that way we are really sharing the pain of Sacrifice.  In addition, how about we decrease both the Lt. Gov and Gov. salary by 30% or so.  Yes, so many places to start, yet we look to the disabled to solve our budgetary issues.

posted by: ConnVoter | December 11, 2012  2:31pm

Gompers, what you just said is completely contradicted by the state’s tax-and-spend policies.  You are right, we can no longer get any more blood from stones, but the “stones” are the state’s taxpayers, not the poor.  When you tax people too heavily, they leave for other states (and take their money with them). 

Also, in case you’re wondering, in 1950, Connecticut had no income tax.

posted by: lkulmann | December 12, 2012  4:56pm

CT is bringing in tons of federal funding BECAUSE of the poor and disabled. The poor and disabled never see the money because there ate too many hands in the pot including CT DSS ....too many dirty hands in the $$$$ pot. And plenty of blood money coming from dirty healthcare in the name or the poor and unfortunate. Think people…THINK!
Everytime someone swipes a food stamp card a bank gets a dollar to process the transaction…every swipe…