| Grab Your Shovels! |
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| Thursday, 26 February 2009 20:12 |
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While politicians and economists may argue about the ultimate impact of the stimulus package for the A day after its passage, Governor Paterson estimated that the legislation would bring $24.6 billion to New York Sate over the next two years. Approximately $2.6 billion of the total will go directly to needy individuals in the form of enhanced food stamp and unemployment insurance benefits. Another $3.4 billion will go to infrastructure projects in the areas of transportation and the environment. The best uses for the remaining $18 billion or so, however, depends on whom you are asking. Most human service advocates have anticipated that the bulk of any federal stimulus aid would be used to offset a significant portion of the State’s $13 billion deficit in FY2010 which starts on April 1st – thus avoiding many of the most onerous service cuts proposed in Governor Paterson’s Executive Budget proposal. Others are hoping that the new federal money will drive a host of new programmatic and service opportunities in a range of program sectors. Given the complexity of this 1,000-plus page legislation and the broad range of funding initiatives it includes, both views could be correct. The Big Dig In light of our current fiscal crisis, it appears likely that much of the federal financial assistance not targeted to individual aid or infrastructure projects will go towards reducing deficits at the state and local levels. In other words, the shovels we’ve been hearing about will be used to fill a hole we’ve already dug. Some of the funding streams making up the federal aid package have beeen designed specifically for this purpose. The $12.6 billion which New York will receive in the form of increased federal share of Medicaid costs (FMAP), for example, represents a cash savings with relatively few strings attached. Similarly, a State Fiscal Stabilization Fund is expected to provide $2.5 billion that can only be used for restoration of cuts to education spending, plus another $556 million that can be used to support any government service. “The benefit of this is that the nonprofits are not going to be cut as deeply as they would have been,” says Ronald Soloway, Managing Director of Government and External Relations at the UJA-Federation of New York. “This could forestall some of the worst of the cuts. That is the first value that can come from this,” says Jack Krauskopf, Director of the Center for Nonprofit Strategy and Management at Baruch College. However, not everyone agrees that the federal aid will allow us to avoid serious cuts to services. Governor Paterson has repeatedly argued that the federal stimulus package, should it come at all, would be too small to cover anything more than a fraction of the State’s deficit over the next several years. “We still have to address a $13 billion deficit next year and a multi-year deficit of over $48 billion,” he said following passage of the bill. “Most of these recovery funds will be spent within two years, in some instances, sooner. Therefore, this federal stimulus legislation does not in any way diminish the need to reevaluate our operations and produce a smarter, less costly, more efficient government.” Advocates have begun expressing concerns about rumblings that the Governor will attempt to avoid using any of the stimulus money as an offset to deficits in the upcoming budget negotiations for FY 2010. “We are hearing that he wants to put it away as a rainy day fund,” said one observer. However, given the pressure that the Governor and legislature are likely to receive from the politically powerful healthcare and education sectors – and the fact that the federal legislation reportedly prohibits using the new funding as a fiscal reserve – it seems inconceivable that the new aid package would not be used to offset at least some of the proposed cuts in next year’s budget. If that is the case, how much help are we really getting? Let’s begin by looking at the three largest pieces in the package – FMAP ($12.6 billion), State Fiscal Stabilization Fund ($3 billion) and Aid to Education ($1.7 billion). While these certainly represent enormous levels of new funding, it is important to remember two things. First, these funds are generally stretching over at least two fiscal years. Second, significant portions of these funds will be going to cities and counties rather than into the State’s coffers. Governor Paterson reported that an estimated 30% of the FMAP funding would be shared with localities and all of the $1.7 billion of Title I and IDEA education aid goes directly to local school districts. As a result, the amounts of federal aid readily available to cut the State’s deficit would be $1.3 billion for FY2009 which is just ending, $5 billion for FY2010 which starts on April 1st and $4.5 billion for FY2011. Since the legislature recently balanced the books for FY2009 by passing the Governor’s Deficit Reduction Plan, that first $1.3 billion in federal aid theoretically could be available for use in FY2010, bringing the total stimulus assistance for the upcoming year to approximately $6.3 billion, or almost half of the $13 billion deficit currently projected by the Governor’s Division of Budget. Once again, however, it is important to remember that Governor Paterson has consistently argued that the State’s deficits are likely to grow beyond current projections. Legislative leaders recently offered support for this viewpoint when they upped their own projection for the FY2010 deficit by $1 billion to a total of $14 billion. Who Gets It? How these savings might be applied as offsets to cuts is another question. “It is going to be quite a series of negotiations,” says Lauri Cole, Executive Director of the New York State Council for Community Behavioral Healthcare. As noted, an estimated $1.2 billion of federal relief in each of the next two years would be mandated for restoration of education cuts. On the other hand, healthcare advocates and associations like the Healthcare Association of New York State (HANYS) are arguing that savings from FMAP increases should be used “to restore the Governor’s Medicaid cuts.” “This is Medicaid money that should follow patients and and the providers that serve them,” says Cole. Where this leaves broader human service programs, which have been targeted for $385 million in cuts, remains a serious concern. Targeted Funding In addition to these broader fiscal relief components, the ARRA legislation includes a wide range of smaller, yet very significant, infusions of funds for various program sectors. In some cases, these too might be needed to offset existing deficits in those particular program areas. In others, the new funding appears very likley to drive new programmatic activity, either through expansion of contracts with existing nonprofits ººor through entirely new programmatic initaitives. Here is a very preliminary look at some of the issues and opportunities based on a quick review of the ARRA fiscal stimulus package. Early Childhood Programs The fiscal stimulus package includes significant investments in early childhood programming through a $2 billion infusion into the Child Care and Development Block Grant (CCDBG) and a $2.1 billion addition to Head Start. New York State’s share of these new allocations are estimated at $97 million and $42 million respectively. While both of these appropriations provide services which are delivered through the same system of early childhood centers and programs, the paths these monies will follow – and the issues they will confront along the way – are likely to be very different. “New York City has a deficit in its child care programs,” says UJA Federation’s Ron Soloway. “So how is the City going to use that money? It is going to fill that hole.” In fact, New York City’s child care budget deficit far exceeds any increased funding it is likely to get from the CCDBG increase. Earlier this year, ACS announced a three-part series of actions to close a $62 million deficit in funding for its child care center programs. At the same time, the City has refused to make “market rate” payment increases for its family day care providers worth another $55 million, claiming that it was underfunded by the State. As a result, it is likely that the City will face pressure from both its network of day care centers and SEIU Local 1707 which represents their employees to use the new funding to reverse at least some of the proposed cuts: elimination of 3,500 child care slots currently serving five-year-olds who will be referred to public school kindergartens, closure of classrooms in certain underutilized centers and reduced funding for programs with both ACS contracts and Department of Education contracts to offer Universal Pre-Kindergarten (UPK) programs. At the same time, there is likely to be competing pressures from the United Federation of Teachers (UFT) to utilize the new funding for market rate payments to family day care provider, a group it now represents. Simply using the new funding to reverse cuts as currently proposed may not be the best approach, counters Nancy Kolben, Executive Director of Child Care Inc. “This shouldn’t just be a discussion about filling a hole in the budget, about making cuts or not making cuts,” she says. “This should be a discussion about how do we use these funds to create the strongest system of services at the end of the day. “Take the issue of serving five-year-olds as an example,” Kolben continues. “If you say that they can be served in the public education system, leaving space in early childhood centers, then you can use this stimulus money to create programs for younger children. You can age down. Don’t make the discussion just about closing classrooms or not closing classrooms. We can make decisions about how best to use our resources.” Kolben believes that wise use of the stimulus money will pay off in additional resources down the road. “Everyone working on this in Washington thinks that this administration has a vision of making this a downpayment on bigger future investments,” she says. “But, if we can’t go back to Congress and show that this money was used and made a difference, it will end up being one time money.” Kolben is also hopeful that targeting of the new CCDBG funds to Quality Expansion ($8 million in New York State) and Infant/Toddler services ($4.6 million) will also drive innovation. “We are ready to move forward with a systemic effort to develop a quality support system that begins with program assessment and provides programs with tools to become stronger and stronger,” she says, referring to the QualityStarsNY system which is currently being developed by the Office of Children and Family Services (OCFS) in cooperation with providers around the state. “This money should allow us to launch this program.” Head Start The $42 million expected to come to New York in Head Start funding may face fewer obstacles on the road to creating new services and programs, in large part because it flows directly to existing Head Start grantees rather than through the State government. At the same time, however, guidelines were established during the most recent Head Start reauthorization on how any new funding could be utilized, explains Kolben. Certain amounts would be allocated to salary increases which had not been funded for several years; certain grantees have the option of moving their age range down to serve younger children. The stimulus package allocation for Head Start also has a very strong focus on Early Head Start, with more than half of the funding – $1.1 billion of the total $2.1 billion – carved out for those programs. “We see this as a real opportunity for Early Head Start expansion,” says Kolben. “We have been talking to the Head Start Statewide Collaboration Coordinator about doing webinars, helping people understand how to apply and not just leaving it to chance.” Once again, however, Kolben emphasizes that policy makers and advocates should not view the stimulus funding for CCDBG and Head Start as separate issues. “We should be looking at these as two parts of a total investment in young children. We have an opportunity to look at where services are delivered, how we organize them and how to make investments in qualiy,” she says. “There are people ready to step forward and do that work.” Training and Employment Providers of training and employment services funded through the Workforce Investment Act (WIA) can also expect to see a significant increase in programmatic activity. New York State is anticipating a total of $174 million in increased funding, with $72 million targeted for youth services, $70 million for displaced workers and $32 million for adults. Of these totals, $70 million should come to New York City, says Tim Ford, Executive Director of the New York City Employment and Training Coalition (NYCETC). It is an increase equal to a typical year’s funding for the system, although it would theoretically be spread over two years. “This is a big chunk of funding to absorb, but it is not unheard of since this is where the system was at maybe seven years ago,” says Ford. “With so many cuts at the federal level, we are at a much smaller place right now. A lot of people are using the analogy of reinflating a foodball. “Things are going to have to move fast,” Ford continues. “Thirty days after the President signs the bill, the money is allocated to the states. Then another 15-30 days later and the money is allocated to the local workforce areas. They are going to have to move relatively quickly in terms of contracts and the procurement process.” Ford notes that there is an intention in the bill to devote a significant amount of youth services funding ($72 million statewide with $36 going to New York City) for summer jobs programs. “I know the City is looking at how it can enhance its Summer Youth Employment Program,” says Ford. “We have had a SYEP for many years now but it has been funded with State dollars coming via TANF. This is going to be a little different.” Other youth programs which may benefit from the stimulus funding could include Out of School Youth programs and the Young Adult Internship Programs. “There are other existing vehicles they can use to expand,” says Ford. On the adult side, funding in New York City will flow through the Deparmtent of Small Business Services (SBS). “They will probably be looking at making more training vouchers available and making sure their WorkForce1 centers are well resourced,” says Ford. In addition to the WIA funding coming to New York through formula allocations, Ford is also hoping that local providers may win some of the $750 million in competitive grants that will be awarded at the national level. “We see that as a good potential opportunity for some additional funding coming into the City,” he says. He also notes that opportunities may exist in other areas of the stimulus package. “There is a $100 million training program to prepare people for jobs on energy efficiency infrastructure projects,” says Ford. “The key for providers is to stay engaged and be ready to take advantage of programs and new resources as they are rolled out.” Community Action Agencies New York State’s 52 local Communty Action Agencies and Programs (CAAs and CAPs), which have the mission of reducing poverty and revitalizing low inccome communities, will be seeing a dramatic increase in resources through several components of the stimulus package. “We are very pleased that the President has invested in Commmunity Action Agencies as a way of reaching low and moderate income families and getting them into jobs,” says Denise Harlow, Executive Director of the New York State Community Action Association (NYSCAA). First, New York expects to receive an infusion of $87 million over two years in additional funding through the Community Services Block Grant. By comparison, the State’s current annual CSBG allocation is approximately $55 million. CSBG funding flows through the NYS Department of State for distribution to CAAs and CAPS where decisions on programming are made locally. In New York City, funds are allocated to the Department of Youth and Community Development which serves as the CAA for the City. In turn, DYCD traditionally allocates its CSBG funding to Neighborhood Development Areas. DYCD is currently reviewing proposals for a new round of NDA contracts with awards expected to be announced imminently. Second, CAAs also play a major role in New York State’s delivery of Weatherization services – a major area of focus in the stimulus package. In total, New York is expected to receive over $400,000 in new funding for weatherization activities. “We are talking about programs having to increase their production by a factor of six,” says Harlow. “If they were doing ten houses a month previously, they are now going to be doing 60 houses a month. They are going to have to ramp up the creation and training of new crews very quickly.” Finally, many CAAs are also providers of Head Start programs, which, as previously noted, will be receiving significant additional funding through the stimulus package. “Our organizations are going to have to be very nimble,” says Harlow. “They want this money spent, not just allocated, but spent by October 2010. That’s really an 18-month period.” Homelessness Prevention The $143 million which New York State will receive as part of the $1.5 billion national allocation for Emergency Shelter Grants comes as something of a misnomer. In this case, the funding can only be used for homelessness prevention activities and not emergency shelters, according to an analysis provided by the Washington D.C.-based Center for Budget and Policy Priorities. “The funds could be used for short-term or medium-term rental assistance, housing stabilization services and housing relocation assistance, including security or utility deposits and moving costs. “This represents a significant infusion of dollars, but it is incumbent that they be spent wisely and for programs that have a track record of success, including legal services programs and other programs that are slated for elimination in the State and City budgets,” said Steven Banks, Attorney-in-Chief at Legal Aid Society. Other housing related allocations, include: • HOME Program: $251 million to enable state and local government, in partnership with community-based organizations, to acquire, construct, and rehabilitate affordable housing and provide rental assistance to low-income families
And More In addition to these specific allocations, New York nonprofits may benefit from a range of other grants, including:
• Corporation for National and Community Service: This office which administers the AmeriCorps program is receiving an additional $250 million in funding. • Community Services Employment for Older Americans: There is a $120 million national allocation to support service opportunities, many of them with nonprofit organizations. • YouthBuild: $50 million. Are We Ready? With significant pressure to mount programs quickly, both state and local governments, as well as the nonprofit sector, will have to gear up fast. Not surprisingly, this raises concens about how decisions will be made regarding budgetary, procurement and program design issues. On February 10th, even prior to passage of the ARRA legislation, Governor Paterson created the New York State Economic Recovery and Reinvestment Cabinet “to manage the development of State and local infrastructure projects” financed through the stimulus package. Leading the cabinet will be Timothy J. Gilchrist who serves in the role of Senior Advisor for Infrastructure and Transportation. Given the Cabinet’s strong focus on these bricks and mortar projects, it was unclear whether a similar group would be created to coordinate stimulus-funded healthcare, education and human service related initatives. Equally uncertain is the extent to which nonprofit providers will be invited to participate in the process. “It is key that there be some mutual discussions between the State and City and the nonprofit organizations with whom they work for service provision, rather than the public sector just making those decisions without involving its constituency,” says Jack Krauskopf. Gearing up to deliver these stimulus package services over a very limited time period will be a significant challenge for many agencies. “Our organizations will have to be vey astute about how they manage these resources which will be going away again within two years,” says NYSCAA’s Denise Harlow. “They will have to ramp up smartly. They need to ensure that at the end of this process they remain as strong and stable agencies capable of meeting the needs of their communities.” Advocates look back to the period following 9/11as an example of how the nonprofit sector can quickly respond to newly emerging needs in the community. “The nonprofit community really rose to the challenge,” says Nancy Wackstein, Executive Director of United Neighborhood Houses. “They were able to deliver food, counselling and emergency housing. They did it very well. Not only does the nonprofit community have a strong willingness to help. We also have a track record.”
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