New York City Council’s budget response calls for relief for nonprofits

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New York City Councilwoman Helen Rosenthal warned that “social service programs are beyond the breaking point, and in fact, many are going under.” (William Alatriste/New York City Council)

In response to constant pressure from nonprofit advocates and concerns about the level of federal support for the social safety net, the New York City Council’s response to Mayor Bill de Blasio’s preliminary budget proposal pushes for more money for human services providers, and argues to expand services for seniors and others.

Social service nonprofits say that under de Blasio, they’ve gained some ground in securing funding increases, but argue that more substantial budget relief is needed to ease the financial pressure that’s been building within the sector.

As contract reimbursements have lagged behind the costs of doing business, providers have pushed for increases to cover maintenance, technology and training costs. The financial strain has meant some nonprofits have shuttered and as many as 18 percent of health and human services providers are insolvent. In addition, the government often pays contracted providers late, contributing to the challenge of maintaining fiscal health and stability.

The City Council’s April 3 response to the mayor’s $87.4 billion preliminary budget proposal released in January is part of the annual give-and-take between City Hall and the City Council, and is followed by the submission of a revised budget proposal, hearings and the adoption of a finalized budget before the fiscal year begins July 1. De Blasio’s proposed executive budget is expected over the next couple of weeks.

Among the most meaningful ways for the city to provide relief to these beleaguered agencies would be by honoring the City Council’s request that service providers be paid more to manage homeless services, day care, child welfare, education, recreation, mental hygiene and various other programs on the city’s behalf, advocates say.

Nonprofits have created a Sustain Our Sanctuary campaign urging de Blasio to support a 12 percent increase in nonprofit spending to help sustain the city’s safety net for its most vulnerable citizens.

“It’s really necessary to shore up the nonprofit human services organizations that do provide these critical services to New Yorkers that are in pretty desperate need,” said Emily Miles, Federation of Protestant Welfare Agencies’ chief program and policy officer.

In its response, the City Council asked for a comprehensive review of contract costs, which its analysis estimated would be $4.6 billion in the upcoming fiscal year, and an overhaul of the agreements to “ensure that all of the city’s human service agencies engage providers under terms that are fair and sustainable.”

Asked about the sectorwide funding issues in late March during his regular appearance on WNYC, de Blasio said, “We understand that folks in the nonprofit sector are hurting. We’re going to look at what we can do, and it’s going to be a very honest internal conversation to figure out what we can do.” Citing the uncertainty of federal and state budgets, he added, “We know the nonprofit sector needs help. At the same time we have to be careful in how far we extend ourselves given the overall budget dynamic.”

The 2.5 percent cost-of-living adjustment introduced in mid-2015 was the first increase nonprofits had seen in at least six years, HSC said, and some reported delays in receiving that funding increase. The de Blasio administration has instituted a phased-in $15 minimum wage increase to support the lowest wage nonprofit employees. And in his January proposal, de Blasio planned to fund three consecutive 2 percent yearly pay raises for workers starting July 1, according to the mayor’s office. But the nonprofit sector has said the incremental improvements don’t fully account for revenue gaps faced by their organizations.

In a recent podcast with NYN Media, Human Services Council of New York Executive Director Allison Sesso said the fight for more funding enjoyed “strong Council support” and acknowledged the recent pay raises. But in some cases, those raises have the unintended consequence of creating a wage gap between workers whose raises were funded by the city and others whose weren’t. Sesso said nonprofits need nonpersonnel-related funding increases to support infrastructure and administrative costs. Many nonprofits are funded by several government entities, foundations, grants, direct donations and other sources to run programs – but have less money available to cover nonprogrammatic, operational costs.

Helen Rosenthal, chairwoman of the City Council’s Contracts Committee, said the pay issue has been heard by the City Council’s various caucuses, each of which listed nonprofit stability among their top priorities.

“The reason that people are focused on this now is because these social service programs are beyond the breaking point, and in fact, many are going under,” Rosenthal said, noting that she’d spoken to one provider that said their contracts had been renewed under the same terms and price scale for the past few years. “And what the Council is saying is: let’s be honest about what we’re buying.”

While de Blasio has a generally friendly relationship with the City Council, President Donald Trump’s priorities make it likely that some federal money will dry up, leaving the city to choose among many competing priorities.

Given the uncertainty of federal support for the social services safety net, Sesso said, it was time to protect the sector in advance of any massive cuts.

“Now is the time to shore up these nonprofits so they can be there in the future,” Sesso said.

The City Council also proposed a $50 million security plan to protect community centers and cultural institutions at risk of hate crimes or other threats – as the number of hate crimes has risen in New York City this year.

To support programming for older adults, the City Council called for the mayor to increase the city Department for the Aging budget by at least $60 million, which would amount to a 20 percent increase over his January proposal.

Chris Widelo, associate state director of AARP New York, said the City Council’s request met the advocacy group’s targets and included $15.7 million to baseline services such as homecare for older adults who are ineligible for Medicaid, and onsite services to areas with high concentrations of elderly. The organization also asked for $44.9 million to expand other programs and upgrade senior centers.

“You can’t revamp this entire system overnight, but we need to start making strides in the right direction,” Widelo said. According to city estimates, the number of seniors is expected to grow to one-fifth of the city’s population by 2040.

Miles, at FPWA, said a coalition with LiveOn NY, United Neighborhood Houses, Citymeals on Wheels and others has been advocating for multiyear funding increases to the city Department for the Aging, which would infuse the agency with $132.8 million through June 2023.

“If we wait too long, it becomes a lot more costly and the tendency is just to throw a lot of money at something and hope that it goes away,” Widelo said. “We need to really look at it and figure out how we want people to age in New York City.”

The City Council’s response also asked the de Blasio administration to spend an additional $3.85 million for additional naturally occurring retirement communities and neighborhood naturally occurring retirement communities, which consist of integrated buildings or communities with a heavy concentration of seniors. The mayor’s proposed budget would currently fund 28 communities at a cost of $6.3 million.

Other requests from the City Council response included $27.9 million to bring the number of summer jobs to 80,000 from the 65,000 proposed by City Hall in January; $14 million more to bolster emergency food supplies for low-income New Yorkers, and a salary increase for city Administration for Children’s Services caseworkers, following several high-profile deaths of children. The City Council asked for increased funding for immigrant services, such as the Mayor’s Office of Immigrant Affairs, legal services and the New York Immigrant Family Unity Project. It also called for the use of existing resources to fund the mayor’s Turning the Tide on Homelessness plan.

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