They employ 12 percent of the state’s entire workforce, but they are consistently underfunded by state government.
That’s why the Connecticut Nonprofit Human Services Alliance, a statewide coalition of 800 private nonprofit organizations and 19 associations, is asking Gov. Dannel P. Malloy for a 8.52 percent cost of living increase.
The 8.52 percent represents the increase in the Consumer Price Index over the past five years.
Barry Simon, president and CEO of Oak Hill and a member of the coalition, said the contracts the state has with these nonprofit providers totals about $1.38 billion or 7.3 percent of the total state budget. These providers employ 130,000 individuals and serve about 500,000 state residents, which amounts to about 15 percent of the state’s population.
In a phone interview last week, Simon said he didn’t believe 8.52 percent was unreasonable given that most of the 1 percent increase the coalition received in 2012 was eaten up by mid-year rescissions to the state budget that essentially left them in the same predicament before the increase.
Simon and members of the coalition were able to get a meeting recently with Malloy, who is in the middle of preparing his two-year budget, and they pitched him on the increase.
“The governor should view us as part of a stimulus package, and not a place where you’re going to cut,” Simon said last week.
Nonprofit providers hold 1,585 contracts with 10 state agencies.
For decades the state has contracted with these nonprofit organizations to provide health and social services to its residents. These nonprofit providers serve adults and children with significant mental illness, substance use disorders, physical and intellectual disabilities, victims of sexual assault and domestic violence, and people living with HIV and AIDS.
The Connecticut Community Providers Association is expected to hold a press conference later today to detail the deep cuts to the system over the past few years.
“The community provider system is already facing significant cuts from rescissions and decisions made in past years, that if carried forward in a current services budget, will be devastating,” Patty McQueen, a spokeswoman for the organization, said. “CCPA members will talk about the impact anticipated budget reductions will have on their agencies, and share a study they have conducted about costs and funding.”
Malloy is expected to unveil his budget for the next two years on Feb. 18. In the meantime, he’s been silent about what it will include.
“We’re in the process of developing a budget that supports middle class families, transforms our transportation infrastructure, and makes Connecticut stronger for the next fiscal quarter as well as the next quarter century,” Devon Puglia, Malloy’s spokesman said Monday. “We look forward to unveiling that budget later this month.”
Meanwhile, Simon explained the impact the lack of funding has had on his staff.
Simon estimated that of his 1,400 employees, about 500 work two and sometimes three part-time jobs in order to survive.
“I guarantee that the person working for me, HARC, and Stop & Shop is not getting all three employers to coordinate their schedule,” Simon said. “It’s a lot of juggling for our employees.”
Alyssa Goduti, president and CEO of the Connecticut Council of Family Service Agencies, said she wants to make sure her employees are paid a decent wage, but the state makes that almost impossible when it fails to increase its funding.
Many organizations try to raise money privately or find foundation support, only to find themselves competing against other organizations in the same boat for the same dollars.
“There is tremendous competition among all agencies seeking the same limited resources from foundations,” Goduti said.
And while the coalition applauds the legislature’s decision last year to increase the minimum wage, it puts even more financial strain on the nonprofit providers, Goduti said.
These nonprofits argue they can deliver the services at a lower price than state agencies. But it’s hard, according to their new white paper, to retain a qualified workforce because of underfunding by the state.
State employees who deliver the services in the public sector saw a 3 percent cost of living increase in 2014, which amounted to about $125 million in wage increases. The nonprofit providers received a 1 percent increase, which amounted to about $8 million.
“Consequentially, nonprofits struggle to develop a quality workforce, as many providers experience high turnover with employees considering state employment or similar jobs providing higher wages and better benefits,” the paper states. “This wage gap leaves qualified nonprofit staff frustrated and undervalued, and represents a significant fairness issue that must be addressed by policymakers.”
The state needs to recognize what a bargain these nonprofits are and reward them for it, Goduti said.
The Office of Program Review and Investigations issued a report in 2011 that found it costs 2.5 times more to serve developmentally disabled clients in a state setting as opposed to a private nonprofit setting. More specifically, it cost the state $313,533 to serve a person in a high-end medical group home, while the nonprofit provider spent $124,443 to serve that same person. The difference in cost should be shared with the private, nonprofit agencies providing these services, Simon and Goduti said.
Sen. Beth Bye, D-West Hartford, said she believes these organizations are at a critical point.
“Flat funding won’t hold up anymore,” Bye said.
But Bye knows she’s in a difficult position. As co-chair of the Appropriations Committee, Bye has sway over how much money is spent and which agencies and organizations get that money.
She said there’s money already in the budget to help fund these agencies, but the legislature just needs to reprioritize spending in other areas.
“I say this knowing it’s going to be very hard to be equitable,” Bye said.
Especially when the state is facing a $1.3 billion budget deficit in 2016.
Bye said she’s trying to get an understanding of potential savings in the Correction Department and Public Safety budgets. She said if crime is down and the number of individuals incarcerated is down, then it’s hard to understand why there wouldn’t be savings in that part of the budget to help fund these other services.
Last year, Bye led the effort to find an additional $4.4 million to help reduce the wait list for developmentally disabled individuals in need of state services. The money helped open 100 additional slots for individuals to receive care.
However, that was in a year the state was projecting a $500 million surplus for most of the year.