When social service provider David Burnett stood Thursday to ask Gov. Dannel P. Malloy not to cut from the social safety net, Malloy was ready with an answer. He fielded a similar request earlier that day during an appearance on WNPR’s Where We Live.
Burnett is the CEO of Reliance House, a Norwich-based nonprofit mental health service provider. He and a group of his colleagues gathered for the Connecticut Community Providers Association’s 43rd annual meeting in Hartford.
They presented Malloy with an award for preparing Connecticut for the implementation of the Affordable Care Act.
But the award comes at an awkward time for both parties. As Malloy and legislative leaders negotiate a deficit mitigation plan to close the state’s $365 million deficit, the governor made clear that everything except for raising taxes is on the table. That includes state aid to the nonprofit provider community. Some say a scheduled 1 percent increase in the cost-of-living allowance for providers may be on the chopping block.
In a carefully worded appeal, Burnett told Malloy the community was scarcely getting by as it is. He said Malloy understood the nonprofit sector.
“I want you, however, to think about one set of circumstances in Eastern Connecticut: 15 years of less-than-adequate cost-of-living adjustments through the ‘90s and the first six years of this century, five years of level funding — purchasing power at my agency during that period reduced by perhaps 40 percent,” Burnett said.
The information Burnett presented to Malloy was the same information Malloy heard from a caller who identified herself as “Stephanie” during Malloy’s appearance on WNPR earlier in the day. She said she worked for a nonprofit provider in Norwich.
“Our co-workers, they work at the bare minimum. Our hands are so tied already . . . Last year our healthcare costs rose by 39 percent. This year we have a potential for 32 percent increases,” she said.
Burnett said he didn’t know what the governor should do with the information they had provided. But he asked Malloy to do the best he could to help nonprofits.
“You’re very kind to put it that way,” Malloy answered. “Because I struggle with the obligations of this office on a regular basis.”
Malloy said he has to balance a variety of interests as governor. He said decades of bad fiscal decisions by the state have left him in a situation where he is trying to solve everyone’s problems. He said he knew Burnett’s agency and would do what he could.
“Whether I do a good job or not, I can’t answer. But I can tell you I’ll do the best job I possibly can,” Malloy said.
“Thank you and good luck,” Burnett said.
After the event, Malloy said he couldn’t say whether the 1-percent cost-of-living adjustment for providers would be among the cuts to which he will agree.
“There are discussions ongoing between legislative leadership and the executive branch and we both agreed not to talk about those things,” Malloy said. “But suffice it to say everything’s on the table . . . I’m well aware of how these folks have been treated by prior administrations in good times. I’m interested in getting to a point where we’re treating our strategic partners better.”
But the problems such a cut would create for providers would extend beyond going another year without a cost-of-living adjustment. Many are depending on the additional revenue and have written those increases into employees’ union contracts.
That’s the case for Diane Manning, president and CEO of United Services Inc., a behavioral health and social services provider in eastern Connecticut. Her organization has about 250 employees who are represented by SEIU District 1199.
“I have a contract negotiated with 1199 that increases my health insurance cost 1 percent of payroll as of January 1. That’s where my 1 percent [COLA increase] was going . . . to pay for their health insurance increase. That’s gone. So that means we cannibalize something else, another position, another service,” she said.
Manning said that without the 1-percent COLA bump, she will have to find a way to come up with roughly $50,000 somewhere else.
“That’s a cost I cannot not pay. It’s the union’s contract,” she said.
Andrea Barton Reeves of HARC also said she was worried about not getting the increase. She said she already had agreed to pass the new funds on to her employees.
“We’re talking about people who make on average $11.44 an hour and whose families are already relying on public services like Husky, and who will become even more vulnerable and reliant on public services without getting this increase,” she said.
She said she thought Malloy understood the dilemma nonprofit providers are facing, but said it was important he knew the impact he’s having on people who receive services.
“The fact of the matter is, no matter how dire the budget situation is, it still can’t be balanced on the backs of people who either deliver direct care or receive direct care. I know he knows that,” she said.
Stephanie, the Where We Live caller, said during the show that the people who she serves are getting hit with the current cuts.
“We’re extremely nervous about the future and more cuts and it impacting the community at large,” she said.
Malloy said he didn’t enjoy being in the position to have to make cuts. But the reality is that Connecticut and 31 other states need to tighten their belts, he said. Those cuts need to be spread across all state services, he said. The governor tried to put the budget deficit in context. He said the shortfall was somewhere between $365 to $400 million
“That’s out of a $20 billion budget. So everyone’s got to put these things in perspective. As bad as it is, it’s a lot better than it was two years ago,” he said, adding that his administration has increased spending in the social service area.
Malloy said given how Medicaid funding is being distributed, a lot of the agencies that provide social services are seeing more money come in. He said we “stuck our neck out” in Connecticut and decided to cover more people under Medicaid, who make up 55 percent of the poverty rate. Now there is a lot more money being spent on the program than anyone anticipated, he said.
“We certainly have to help these agencies get through this but there also has to be an understanding that we need to trim our sails by about 1.5 percent,” he said.
Earlier in the interview, Malloy downplayed the severity of the budget shortfall.
“We’re going to get through this folks. Everybody take a deep breath. This is not Connecticut’s ‘Fiscal Cliff,’” he said.
Christine Stuart contributed to this report