Courtesy of the CT Community Nonprofit Alliance

HARTFORD, CT — Connecticut’s Community Nonprofit Alliance members, who provide services to some of the state’s neediest residents, are concerned about what happens with their contracts if legislative leaders and Gov. Dannel P. Malloy can’t approve a budget by the end of June.

The state spends about $1 billion a year on contracts with nonprofit providers who provide mental health, disability, and basic need services to thousands of Connecticut residents. In the past, failure to agree on a budget during the regular session has put funding for these organizations in jeopardy.

Funding was delayed for these nonprofit providers in 2003 and 2009, the last two times the General Assembly and the governor failed to finish a budget before June 30.

A recent survey of Alliance members found that cuts and delayed payments will destabilize the state’s health and human service delivery system and leave some of the state’s most vulnerable individuals without support.

At least 66 of its members responded to the survey, which found within two weeks at least 75 percent would have to access their cash reserves and 42 percent would pursue a line of credit to continue providing services. A reduction in payments would force 82 percent to start laying off staff and 77 percent would reduce services, according to the survey.

“People rely on vital community-based services every day, and those needs won’t change on July 1 if the budget talks are at a stalemate. Our members are struggling with how to keep doors open with reduced, or no funding, and what impact that will have on clients,” Gian-Carl Casa, president and CEO of The Alliance said. “Make no mistake, this will be a crisis.”

Following a meeting Tuesday, Senate Republican President Len Fasano, R-North Haven, said his gut tells him that they will go beyond July 1 before they have a two-year budget, even if they continue conversations.

“How much past July 1? I don’t know,” Fasano said.

Malloy told legislative leaders Tuesday that he would release a set of principles that would help guide how he manages the state without a budget — an increasingly likely scenario.

“There are thousands of decisions that are made in a budgetary document,” Malloy said Tuesday. “I will speak to the issue of how we will make those interim decisions without such a document.”

It’s unclear how contracts with community nonprofits will be prioritized.

“In order to pay for our rising fixed costs with our anticipated revenue next year, we will have to sharply reduce spending in many areas, including spending that we all agree is important and worthwhile,” Chris McClure, a spokesman for Malloy, said Thursday. “It would be less difficult to do it if the legislature can agree to a budget that takes advantage of $700 million in labor savings and makes other necessary adjustments that require legislative action. We are eager to work with them to develop and pass such a budget right away.”

Malloy and legislative leaders are expected to meet again until next week. At the same time, labor unions are wrapping up negotiations with the administration over their individual bargaining unit contracts on wages and working conditions. Those negotiations are expected to conclude next week.

Rank-and-file union members won’t be voting on those contracts and the health and pension portion of the agreement negotiated by the State Employees Bargaining Agent Coalition until July. However, Malloy said if leadership of the unions sign off on the wage and working conditions portion of the contract next week, then he won’t have to consider moving forward with layoffs.