Budget Breakdown

Budget Breakdown

April 14, 2015

The nonprofit sector had reasons to be hopeful that this might be a good year when it came to negotiations over the state budget for fiscal year 2015-16. The state was sitting on more than $5 billion in unallocated surpluses that had accrued from various court settlements with financial institutions and other major corporations—and additional settlement income seemed to be on the way. Moreover, the human services sector could clearly demonstrate that it had taken it on the chin during the lean years following the fiscal crisis, going six years without any across-the- board cost of living adjustment (COLA) to cover the rising costs of delivering services. In the first five of those years—fiscal year 2009 through fiscal year 2014— nonprofits had seen inflation reduce the purchasing power of their budgets by approximately 12 percent.

One major problem with the state’s overflowing new pot of legal settlement income, however, was that it was “one- time” funding and not the kind of recurring income that could support permanent adjustments to financing that nonprofit service providers needed.

In response, a coalition of leading nonprofit associations and advocacy groups—the Human Services Council, UJA-Federation of New York and United Neighborhood Houses—put together a campaign urging the governor and Legislature to create a $500 million Non- profit Infrastructure Fund that would make one-time investments in human services provider agencies to support specific projects involving core facilities, new technology, improvements in outcomes and performance, facilitation of mergers and partnerships, program innovation and pay for success contracts. The request also included another $50 million to capitalize an existing Contract Cash Flow Stabilization Fund that would provide interest-free revolving cash fund loans to nonprofits whose state contracts and payments were delayed.

The other major problem with the litigation settlement money was that a lot of different groups wanted to use it for a lot of different things. There were bridges to build, economic development projects to fund, Metro-North stations to add, highspeed Internet access to provide, etc.

In the end, nonprofits actually did get a Nonprofit Infrastructure Capital Invest- ment Program, although funded at just $50 million—10 percent of what advocates had hoped for.

“While we did not receive the full amount requested, we are grateful for this critical investment that comes at a time of increasing inequality and instability in our state,” the Human Services Council said. “This is a dedicated fund for the nonprofit sector, and HSC will advocate for its expansion and continuation in future years. We thank UJA-Federation, United Neighborhood Houses, and all of you who carried our request in your meetings, participated in our Twitter rally, and joined our direct advocacy efforts. We look forward to working with you to continue our push for adequate investment and support for human services.”

The $50 million Nonprofit Infrastruc- ture Capital Investment Program will enable "targeted investments in capital projects that will improve the quality, efficiency, accessibility, and reach of nonprofit human services organizations that serve New Yorkers."

Grants from this fund will be awarded through a competitive process to eligible nonprofits that provide direct services to New Yorkers through state contracts, state authorized payments, and/or state payment rates.

In fact, the new fund does not come through the litigation settlement monies at all—probably a good thing. The budget legislation specifies that the program will be administered by the Dormitory Authority, as proposed by the Assembly. It authorizes the Dormitory Authority and the Urban Development Corporation to issue bonds or notes to fund the project costs. As mentioned above, the funds will be distributed through a competitive process to eligible nonprofit organizations. They can be used for:

• Technology upgrades related to improving electronic records, data analysis, or confidentiality.

• Renovations or expansions of space used for direct program services.

• Modifications to provide for sustainable, energy efficient spaces that would result in overall energy and cost savings.

• Accessibility renovations.

The state agencies that will be included in the award decision-making process include the Office of Children and Family Services, the Office of Temporary and Disability Assistance, the Office for People with Developmental Disabilities, the Office of Mental Health, and the Dormitory Authority. The budget bill sets forth the information that organizations must include in their applications for funds from the infrastructure program.

“Over the coming months, HSC will be actively engaged in advocacy and capacity building to ensure that our members compete for these much-needed funds,” the Human Services Council said. “We will keep you updated as we find out more details about eligibility—particularly as it relates to building ownership.”


The enacted budget also includes fund- ing to both extend and expand on last year’s 2 percent COLA for the lowest paid members of the direct service workforce.

Last year, for the 2014-15 fiscal year, the Legislature made salary increases for the “lowest paid” direct service employees a priority and included a 2 percent adjustment for the last quarter of the fiscal year—Jan. 1 through March 31. At that time, the budget also included language—although no funding—to add another 2 percent COLA effective April 1 for those staff members who had received the prior year adjustment as well as additional direct service staff who had been left out of the first-year workforce COLA program. During the recent budget negotiations, the governor and legislature came up with the money necessary to implement this plan.

“While we are still parsing out the COLA budget items, we know that COLAs are funded at $84 million for fiscal year 2016,” said the Human Services Council. “This is another significant victory for our sector, which has been forgotten for too long. This funding will help to stabilize our workforce so that we may continue to deliver essential services to New Yorkers who need them.”

It is important to keep in mind, however, that these targeted “workforce” COLAs provide no funding for the many other kinds of staff it takes to run an agency— maintenance staff, billing clerks, drivers, administrative staff, etc. Nor do they provide any funding for agencies to cover the rising costs of non-personnel-related expenses.

And, as New York Nonprofit Press has reported, targeted COLAs for which only certain categories of employees are eligible are well known as bureaucratic nightmares for the agencies that have to administer them. Provider agencies have to identify specific individuals by title and program who are eligible for the increase. Providers say guidance as to who is eligible and how the funds can be allocated among eligible staff varies depending on the source of the contract—the Office of Children and Family Services, the Office of Mental Health, the Office for People with Developmental Disabilities, etc.

Last year, providers were required to send copies of their plans for how they would use the 2 percent to all local social service districts with which they have contracts. And they were required to have a board resolution attesting that the funding received will be used solely to support salary and related fringe benefit increases.

This year, state overhead agencies are already preparing administrative guidelines that providers must follow to access the new 2 percent COLA. 



Looking beyond funding to directly support nonprofit provider organizations and their staffs, advocates found both good news and bad.

“The NYS FY2015-16 Enacted Budget presents a mixed bag for New Yorkers and the nonprofit settlement houses and community centers that serve them,” said Nancy Wackstein, executive director of United Neighborhood Houses. “In the ‘plus’ column, several key investments such as the Settlement House Program and School Aid support for New York City’s SONYC afterschool program were continued at FY15 levels, preventing a disruption in critical services.”

“The passage of the New York State budget provides sustained funding for key initiatives that support some of New York’s most vulnerable,” said Bich Ha Pham, director of policy, advocacy and research at the Federation of Protestant Welfare Agencies. “We applaud the Governor’s and State Legislature’s efforts to combat poverty with the continued expansion of Pre-K, as well as employment opportunities for youth, supportive services for runaway and homeless youth, $10 million initial investment to materialize the plan to Ending the AIDS Epidemic by 2020, and additional funding for senior services.”

“Of the many worthy causes and initiatives included in the budget, we are particularly grateful for the efforts that were made to help the most needy and vulnerable,” said Eric S. Goldstein, CEO of UJA-Federation of New York. The organization applauded the $50 million funding for the Nonprofit Infrastructure Capital Investment Program as well as the funding for the Safe Harbor program for sexually exploited children, an increase in after-school slots, and funding for a health information technology infrastructure program. “Furthermore,” the group continued, “the $4.5 million investment to fight hunger by bolstering New York State’s 2,600 emergency food-service providers will help UJA-Federation’s beneficiary agencies feed our city’s neediest.”


At the same time, however, advocates cited a range of issues where additional funding was necessary.

“In the ‘needs improvement’ column, other enhancements fell far short of need, as in the case of child care and the Summer Youth Employment Program (SYEP),” said UNH’s Wackstein. “In still other areas, funding actually remained flat despite growing need, as in the case of Community Services for the Elderly (CSE) and Adult Literacy Education (ALE). For many New Yorkers the cumulative funding decisions in this year’s budget will yield new opportunities, but for far more, their challenges will remain. Still, UNH remains committed to working with State leaders in the legislative session ahead to implement policies that support New York’s children, youth, immigrants and older adults.”

“While the Governor’s plan to combat poverty is a significant step in the right direction, the final budget falls short of truly addressing the growing economic divide in our state,” said FPWA’s Pham. 


“The removal of an increased minimum wage and paid family leave requirement undermines a family’s ability to lift it- self out of poverty. We strongly support a $15 minimum wage for New York City where the cost of living is unstable and unattainable for millions of residents. We are also troubled that the State Budget has not restored many cuts made to human services and public health during the recession. Families rely on these vital services and it’s critical we continue to provide services that help the most vulnerable achieve economic equity.”


“The budget contains much good news for Network members continuing to build on several successful supportive housing initiatives,” said the Supportive Housing Network of New York. “Unfortunately, the budget does not include a larger statewide supportive housing agreement. Over the next several weeks, the Network will begin a post-budget advocacy campaign for an expansion of the program.”

Among the specific highlights, SHNNY pointed to the following:

• Inclusion of $74.5 million of the JP- Morgan settlement funds to support a statewide supportive housing program. This is $8.5 million more than what the executive proposed but falls significantly short of what is needed to support a statewide supportive housing agreement to build 30,000 units in New York City and 5,000 in the rest of the state. The network will be advocating for an expansion of the program.

• An additional $50 million in JPMor- gan settlement funding ($10 million per year for five years), to help offset cost increases in scatter-site housing in areas with rapidly escalating fair market rents. This is a much-needed funding boost, but represents only 10 percent of the current need across all OMH housing types, which is $99 million annually.

• A $32 million increase in MRT Supportive Housing Program. This funding will continue to provide service funds, rent subsidies and capital dollars to create supportive housing for high-cost Medicaid recipients.


At the same time, budget negotiations left a number of key initiatives still unresolved, including passage of the state DREAM Act and language to Raise the Age for consideration as an adult in the criminal justice system from 16 to 18.  

Fred Scaglione