April Edition 2010 - New York Nonprofit Press
April Edition 2010 - New York Nonprofit Press
April Edition 2010 - New York Nonprofit Press
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<strong>April</strong> <strong>2010</strong> <strong>New</strong> <strong>York</strong> <strong>Nonprofit</strong> <strong>Press</strong> www.nynp.biz 9<br />
BUDGET TIMEBOMB<br />
gret to say that this budget – which would<br />
impose a total of $1.3 billion in cuts on <strong>New</strong><br />
<strong>York</strong> City and leave us with close to 19,000<br />
fewer City employees to perform basic services<br />
– utterly fails the test of fairness.”<br />
For example, he pointed out that <strong>New</strong> <strong>York</strong><br />
City would see its Aid and Incentives for<br />
Municipalities (AIM) funding cut entirely<br />
while all other counties in the state would<br />
only face reductions of up to 5%. The loss<br />
on AIM alone comes to $328 million.<br />
In response, the Mayor has developed<br />
an entirely separate “contingency budget”<br />
outlining extremely painful cuts to programs<br />
and services which will be necessary<br />
if the Governor’s budget is adopted as written.<br />
What would the loss of this $1.3 billion<br />
mean In addition to cutting 8,500<br />
teachers, 3,150 cops, 1,050 fire fighters and<br />
978 correction officers, there are likely to<br />
be some significant cuts to human services.<br />
A few examples of the Mayor’s proposals<br />
include:<br />
• A 30% reduction in ACS preventive<br />
services capacity – 2,584 slots – for a<br />
$9.2 million budget reduction;<br />
• A 25% reduction in the number of day<br />
care vouchers provided to low income<br />
families for a $35.6 million savings;<br />
• Elimination of funding for 500 soup<br />
kitchens and food pantries for a $10.2<br />
million cut;<br />
• Closing of 15 senior centers for a $3.5<br />
million cut;<br />
• A 6% reduction in administrative rates<br />
to foster boarding home agencies;<br />
• A 14% reduction in City-Funded Beacons;<br />
• Elimination of 3,000 OST slots.<br />
TANF Funded Programs<br />
Another major area of concern for<br />
human service providers is the Executive<br />
Budget’s wholesale cuts to programs which<br />
had been funded using federal Temporary<br />
Assistance for Needy Families (TANF)<br />
funds. These TANF-Surplus funds – savings<br />
accrued by the state as Public Assistance<br />
(PA) rolls declined following welfare<br />
reform -- had been used over the past decade<br />
to support a wide range of human service<br />
programs. As part of the Governor’s<br />
Executive Budget, a substantial portion of<br />
these funds will be redirected back to support<br />
increasing PA costs due to rising enrollments<br />
and higher benefits.<br />
As a result, approximately $132 million<br />
in funding has been stripped away from<br />
over 30 separate programs which provide job<br />
training, youth services, alternatives to incarceration,<br />
supportive housing, refugee resettlement,<br />
home visiting, child care and more.<br />
In most cases, the loss of TANF funding<br />
was total. Therefore, programs which<br />
had been fully-supported by these federal<br />
funds are completely eliminated in the<br />
Governor’s budget proposal. Among the<br />
victims are the Summer Youth Employment<br />
Program ($35 million), OCFS Preventive<br />
Services ($18.8 million), Supportive Housing<br />
for Families and Young Adults ($5 million),<br />
and many more.<br />
Those programs previously funded<br />
through a combination of TANF and State<br />
funds are typically losing all TANF funds<br />
and 10% of State monies. The combined<br />
impacts are devastating. Programs which<br />
provide Alternatives to Incarceration/Alternatives<br />
to Residential Placement for juveniles<br />
lost $10.8 million in TANF funding,<br />
close to 80% of their total funding. Advantage<br />
Afterschool took a $11.4 million<br />
TANF cut, bringing total proposed funding<br />
down to $17.25 million -- 39% below its<br />
current FY<strong>2010</strong> budget and a full 43% below<br />
its $30.5 million starting point at the<br />
beginning of FY<strong>2010</strong>.<br />
Tick, Tick, Tick<br />
As we went to press, the State’s budget<br />
negotiating machinery was beginning<br />
to budge forward. As previously noted, the<br />
Senate had passed a “one house” budget<br />
resolution which restored substantial funding<br />
to a range of programs and services,<br />
including many TANF-funded programs,<br />
monies for Title XX-funded senior centers,<br />
homeless shelter funding, etc.<br />
Providers and advocates took some encouragement<br />
from the Senate action. “We<br />
are grateful that the Senate recognized the importance<br />
of these critical human service programs,”<br />
said HSC’s Allison Sesso of HSC.<br />
Unfortunately, this optimism was tempered<br />
by the fact that the Senate resolution<br />
simultaneously rejected more than $1 billion<br />
in revenue actions already included in<br />
the Governor’s Executive Budget proposal.<br />
Based on a preliminary review, it appeared<br />
that the Senate resolution would leave the<br />
FY<strong>2010</strong>-2011 budget with a significant<br />
deficit.<br />
“The State Senate Democrats’ budget<br />
resolution… fails to take common-sense<br />
measures to generate revenue that could<br />
offset a devastating school aid cut and prevent<br />
8,500 teacher layoffs in <strong>New</strong> <strong>York</strong><br />
City,” said Mayor Bloomberg. “While the<br />
resolution does include laudable restorations<br />
to senior centers, homeless shelters<br />
and indigent health care, all eyes will be<br />
on the Senate, and the entire Legislature,<br />
as we enter the home stretch in this crucial<br />
process.”<br />
Revenues Anyone<br />
While prospects for the Governor’s<br />
“Soda Tax” seemed increasingly doubtful,<br />
a number of advocacy groups were urging<br />
consideration of additional tax and revenue<br />
proposals to offset the need for painful<br />
cuts.<br />
The Fiscal Policy Institute was pressing<br />
for an enhancement to last year’s temporary<br />
Personal Income Tax (PIT) rate increases<br />
for high-income households. “It is<br />
the most logical type of revenue increase<br />
to do in bad times,” says Frank Mauro,<br />
FPI’s Executive Director. “Last year, they<br />
temporarily created two additional tax<br />
brackets, one for individuals with income<br />
of $200,000 or married couples with income<br />
of $300,000 and another for singles<br />
with income of $500,000. We are proposing<br />
that for the remaining two years, they<br />
add an additional one percent tax at the $1<br />
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FPI is also suggesting a “Wall Street<br />
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Mauro. “The profits of the Security Industry<br />
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Among the suggestions are:<br />
• Temporarily suspend the use of net operating<br />
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• An excess profits tax on a certain portion<br />
of profits over a very high level;<br />
• A tax on bonuses; and<br />
• A temporary reduction of the rebate on<br />
the stock transfer tax.<br />
Mauro notes that the Governor of Colorado<br />
has just signed a three-year suspension<br />
on the use of net operating loss carryforwards.<br />
The Human Services Council is also<br />
supporting a number of additional revenue<br />
proposals totaling over $1.2 billion in annual<br />
revenues. These include elimination<br />
of the Empire Zone program ($600 million),<br />
a Plastic Bag Tax ($340 million) and<br />
reforming the Brownfield Clean-Up Program<br />
($300 million).<br />
Another approach to partially addressing<br />
the State’s current deficit was suggested<br />
by Lieutenant Governor Richard<br />
Ravitch who proposed a temporary borrowing<br />
program as a bridge to longer term<br />
fiscal reform. Ravitch’s plan would allow<br />
the State to borrow up to $2 billion per<br />
year for the next three years as part of a<br />
plan which would impose a variety of new<br />
fiscal controls. These would include creation<br />
of a five-member commission to review<br />
the States financial plans, and authority<br />
for the Governor to balance the budget<br />
through across the board spending cuts in<br />
the event of a deadlock with the legislature.<br />
Ravitch’s proposal was promptly criticized<br />
by the Governor and appears to have generated<br />
little other support in Albany.<br />
Three Men in a Room<br />
Following the Senate’s resolution,<br />
Assembly Speaker Sheldon Silver was reportedly<br />
in discussions in preparation for<br />
passage of that body’s “one house” budget<br />
resolution. Watching and waiting, advocates<br />
appeared less optimistic regarding the<br />
prospects here than in the Senate.<br />
Exactly when <strong>New</strong> <strong>York</strong> would get its<br />
“three men in a room” remained unclear.<br />
What appeared certain, however, was that<br />
none of the three would be bringing any<br />
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