What a difference a month makes!

In our May issue, NYNP offered praise and gratitude to Mayor Michael Bloomberg for his initiatives to help the local nonprofit sector with expanded short-term loan funds, contracting improvements and more.

Making matters even worse is the fact that the Mayor’s proposed cuts for FY2010 – which begins on July 1 – comes as nonprofit providers continue to grapple with significant budget reductions -- more than $80 million -- imposed last year.

“Mayor Bloomberg’s FY 2010 Budget threatens core programs that protect New York City’s poor and working families at a time when these New Yorkers need help more than ever,” said Nancy Wackstein, Executive Director of United Neighborhood Houses and Chair of the Human Services Council of New York City. “While we recognize that these are difficult times, a budget is a reflection of priorities. We believe the City of New York must adjust its priorities to focus on the needs of low and moderate income children, working parents, immigrants, and seniors.”

Where the Cuts Are!

The proposed FY2010 budget reductions covered a broad range of service sectors. The Human Services Council of New York City estimated that the combination of baseline cuts and City Council initiatives requiring restoration totaled $43.9 million for child care and child welfare services; $42.8 million for youth and community services and $25.3 million for aging. Other sectors took smaller but still very substantial hits. (See: “Adding Up the Cuts” on page15.)

“This isn’t everything,” said Chris Winward, Senior Policy Analyst at HSC. “It’s just the key programs which we know our members are following.”

Some advocates argued that the levels of budget reductions are significantly worse than even these public numbers indicate.

“There is a $12 million hole in senior center budgets which was created when the City pulled out the Home Delivered Meals contracts,” said Bobbie Sackman, Director of Public Policy for the Council of Senior Centers and Services. “That doesn’t show up as a cut.”

Similarly, steps to close the Administration for Children’s Services $60 million deficit do not show up in the budget totals but are very real for providers. Take ACS’ new “cost allocation” model for child care centers with UPK contracts – a reduction of $12 million on center contracts which providers argue will seriously destabilize the system. The loss of enhancement funding for preventive programs – monies which had never been baselined in the ACS budget and are now lost – is another example.

On May 20th, advocates and providers gathered at City Hall to highlight the impact of cuts in the areas of children, youth and seniors. Here is a look at their comments and their concerns.

Child Care

The City’s child care system is slated to lose over 1,000 child care slots and 3,000 child care vouchers in addition to millions in cuts to existing early childhood education programs such as Universal Pre-Kindergarten and Head Start, say advocates.

“Parents are scrambling to find safe, affordable care and education for their young children while the City is reducing the number of available child care slots and cutting funds for early childhood programs. We owe it to the youngest New Yorkers to stop these cuts,” said Nina Piros, Director of Early Childhood Programs at University Settlement Society.

The Mayor’s budget eliminates all vouchers for funding for low priority child care, meaning families with non-ACS social services, parents who are ill or looking for work. United Neighborhood Houses estimates that this is a total $20.2 million reduction in funding for FY2010.

While an estimated 3,000 center-based slots for five-year-olds are being eliminated as previously announced, $10 million in Federal Stimulus funds will restore 2,000 slots in centers for younger children. The net result, a loss of 1,000 slots and $5 million.

These and other cuts – including the loss of $12 million for programs with DOE UPK contracts -- are seriously weakening the entire child care system, say advocates. (See “Without Foundation: Combined ACS Cuts Threaten Basic Child Care”, page 14.)

Child Welfare

Major hits to child welfare providers include the $3.7 million loss of the “Child Safety Initiative”, which had reduced caseloads in preventive services agencies, and a 5% reduction in rates paid to Foster Boarding Home providers.

“It is a terrible budget proposal for children and families who are receiving preventive services or are in foster care,” said Jim Purcell, CEO of the Council of Family and Child Caring Agencies (COFCCA).

“This will increase preventive agency caseloads and significantly reduce the number of times a worker can see children to ensure their ongoing safety,” said Purcell. “It was called the Child Safety Initiative for a reason.”

“Our City already knows the terrible tragedies that can happen when ACS and its provider agencies do not have the resources needed to keep children safe and families together,” said Stephanie Gendell, Associate Executive Director of Citizens’ Committee for Children. “The Mayor and City Council must adopt a budget that restores funding to ACS, preventive service providers, and foster care agencies because even in difficult budget times, child safety must never be compromised.”

“The foster care rates are already significantly below the level which the State says is appropriate,” Purcell continued. “Cutting them further will increase caseloads, decrease services and probably extend lengths of stay which will end up costing the City more money.”

A previously announced $2.1 million cut to “miscellaneous” foster care expenses is also particularly problematic, says Purcell. “These are special payments for kids in foster care that help them be like every other kid. It is initial clothing and those special things like prom dresses and caps and gowns. This is really taking money directly away from those kids.”

Youth Services

Programs for youth were hard hit in the budget with the loss of $6 million for Out of School Time (OST) Option II programs, $2.9 million for OST summer programs, $2.6 million for OST Option I slots. $3.8 million for The After School Corporation’ After-3 Programs at 39 schools around the city, and $2.1 million for Neighborhood Youth Alliance Street Outreach.

“After school programs provide youth and teens with key educational, social, and extracurricular opportunities as well as a safe place to go after school hours,” explained Amarilis Perez, Director of the Edgies Teen Center at Educational Alliance. “Now, more than ever, these programs are essential for the safety and success of our young people.”

“Flexible programs for youth, such as dropout prevention initiatives, must be funded to ensure the success of young people in New York City,” added Jim Marley, Assistant Executive Director of Good Shepherd Services. “Chipping away at these programs compromises their quality and ability to serve those in need of services.”

Cuts proposed to Summer Youth Employment Program (SYEP) as part of the Executive Budget appear to have been reversed using Federal Stimulus funding.

Senior Services

Senior services took another $7.1 million funding reduction in the Mayor’s Executive Budget. The new cut – elimination of Borough President discretionary funding for senior services – comes on top of approximately $13 million previously announced in the Mayor’s Preliminary FY2010 Financial plan, $8 million in Mayoral cuts during FY09 and the loss of $6 million in Council Initiative funding last year. Another $10.8 million in funding for this year’s Council initiatives was left out of the Mayor’s budget proposal and remains at risk.

“We are going to lose agencies and we are going to lose services,” says Bobbie Sackman of CSCS. “You can’t do this and think that you aren’t destabilizing the senior center system.”

The cuts to Borough President funding will be particularly painful for many centers because it often fills gaps in the system – either financially or programmatically, explains Sackman. “We are hearing that in Queens alone, six senior centers, four adult day programs and a transportation program will close. The Borough President funding is so important to them that if it is pulled out, they will have to close.

“This will also cut recreations and activities – yoga classes, dance, art—everything a senior goes to a center for,” Sackman continues. “Everyone says they want to provide healthy aging programs. This is the money that provides a lot of that.”

“Senior centers and supportive programs are critical in keeping older New Yorkers healthy, active, and engaged. This is not the time to cut back on critical support systems and sources of food for seniors, especially since these programs save the City money by preventing premature institutionalization,” said Yehudit Moch of Hudson Guild’s Adult Services program.

“The senior center is like a second home to me. I don’t know what I would do without it,” declared Katherine Andrade, a participant in the Hudson Guild senior center, at the May 20th rally. “City leaders need to be sensitive to the needs of the thousands of seniors who are relying on their support during this economic crisis.”

Homeless Services

Homeless services providers are also scheduled for significant cuts in next year’s budget, although most of the hits were previously announced with the Mayor’s Preliminary FY2010 Financial Plan. These include a $5.1 million cut to the Homebase homelessness prevention program and redesigned payment incentives and penalties which are projected to cost shelter providers an estimated $10 million. Particularly painful for many providers is the proposed $2.4 million reduction to recreation staff.

(For an advocate’s view of the Bloomberg Administration’s policies regarding homeless services, see “Mayor Bloomberg’s Shortsighted Homelessness Plans” on page 17.)

Health and Behavioral Health

The Executive Budget brought little in the way of new proposals for health and behavioral health providers. For many providers in these areas, the most critical funding losses could be a failure to restore Council programs like $2.4 million for Geriatric Mental Health, $1.6 million for Autism Awareness, $1.6 million for Children under Five and the $3.5 million Infant Mortality Reduction Initiative.

Hard Choices

Granted, Bloomberg is struggling to close a $4 billion budget deficit – no easy task even for this mayor.

“The slowing economy has led to a significant drop in the City’s revenues,” he said in presenting his Executive Budget. “Our economically sensitive tax revenues have fallen by $7.4 billion between FY 2008 and FY 2010. …We have been working on budget balance for FY 2010 since the first signs of trouble appeared. Since January 2008, City agencies have taken $3.4 billion of actions to help close the budget gap in FY 2010…. Nobody says it is good. But, it is a series of lesser choices we have to make.”

Stimulus

On a positive note, several pots of federal stimulus monies not originally included in the Mayor’s Executive budget have begun to fill at least some of the new budget holes. On May 9th, the Mayor announced that $18.5 million in ARRA-related Workforce Investment Act (WIA) funding would be used to support an 8,000 slot expansion in the number of Summer Youth Employment Program (SYEP) job opportunities. The infusion of federal stimulus money would effectively restore both the Mayor’s own proposed cuts to the program and additional Council funding which he had dropped from the budget.

As we went to press, there was hope that these WIA funds as well as other ARRA-related funding streams such as the Community Services Block Grant, Emergency Shelter Grants, etc., might offset – in whole or in part - a number of other proposed service cuts. Among the possible contenders for this federal aid were the Out of School Time program cuts, Adult Literacy Services, Homebase Homeless Prevention, Immigrant Opportunity Initiative and others, etc.

While advocates were hopeful that some relief might be forthcoming, they were cautious in their optimism. “There is still some money out there, but not very much at this point,” said Ron Soloway, Managing Director of External and Governmental Affairs for the UJA-Federation of New York. “You are not going to get $200 million to take care of the problems in the sector. It is just not going to happen.”

Start the Music

Unfortunately, the Mayor’s Executive Budget submission represents only the first carefully choreographed step in New York City’s budget dance. Historically, mayors always drop current year programs which were funded through monies added by the City Council during the budget adoption process – leaving legislators with the responsibility and the credit for restoring these valued services.

This year, that process is far from certain. Not only are advocates and providers pressing the Council to restore its own $78 million in current year human services funding, they are also seeking help in turning back the $100-plus million in Mayor Bloomberg’s cuts to baselined programs.

The answer, say advocates, must be a willingness on the part of the Council to adopt its own proposals to raise revenues – no easy task in an election year.

The Mayor did make his own move in this regard, proposing a number of revenue actions in addition to service cuts -- most notably a 0.5% increase in the sales tax and elimination of the sales tax exemption on clothing and footware purchases of less than $110. Unfortunately, human service advocates and providers find these increases in highly regressive taxes – which fall more heavily on low and moderate income families – almost as painful as service cuts.

While human service advocates are gratified by growing opposition among Council Members to the Mayor’s sales tax increase, they expressed concern that the added issue would dilute both the political and fiscal capital needed to restore service cuts.

Revenue Options

Hoping to repeat its success during negotiations over the State budget, the One New York: Fighting for Fairness Coalition is once again proposing that the Mayor and City Council consider a number of alternative revenue raising options.

“Given the severity of the budget proposal there should be a discussion, as there was at the state level, about the need for additional revenues,” says James Parrott, Chief Economist at the Fiscal Policy Institute. “And, and it should be about additional revenues beyond the billion in the mayor’s proposals.”

Among the items being suggested are an increase in the City’s Personal Income Tax (PIT) rates for high income earners, eliminating property tax exemptions for Madison Square Garden, instituting “modest payments in lieu of taxes” (PILOTs) for private colleges and universities, hedge fund and stock transfer taxes and property tax reforms.

Parrott estimates that a progressive increase in the PIT rate could generate between $800 and $900 million. If it were coupled with reforms previously proposed by Council Speaker Christine Quinn to eliminate taxes for low income households, the net revenue gain would still be $500 to $600 million.

“We just don’t see the basis for saying that because the state increased the personal income tax, the City shouldn’t increase its own tax rate,” says Parrot. “In 2003, both the state and the City PIT were increased. The City PIT maximum rate now is less than what it has been in 30 out of the last 33 years. We think there is still some room for a modest increase there and the focus should be on that.”

“The Mayor and City Council must find ways to fund child care, children’s safety, health and mental health services, after school programs, senior centers and other services that create a support system for low and moderate income families and keep communities healthy and safe,” said Wackstein.

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