Nonprofits brace for possible state cuts to social services

New York saw major political shake-ups last year under its fully Democratic state Legislature, with some noteworthy legislative wins for nonprofits, from the Child Victims Act to legalizing driver’s licenses for undocumented immigrants. But any initiatives taken up during this year’s state legislative session – which is starting Wednesday – will face a big roadblock: a $6.1 billion budget gap that is mostly caused by Medicaid spending.

The massive shortfall leaves the state with two options: raise more revenue or cut back state spending (or both). Assembly Speaker Carl Heastie has already indicated a preference for the former, but Gov. Andrew Cuomo recently argued that “a one-shot cash revenue is not the answer.” Given Cuomo’s power over the budget process, cuts are likely coming – and nonprofits are crossing their fingers and hoping that their social services programs won’t take the hit. 

“I think all too often, programs that serve low-income and marginalized populations are perhaps easier to cut because there are fewer voices being raised up in opposition,” Louisa Chafee, senior vice president for public policy and external relations at UJA-Federation New York, told City & State.

Nonprofit groups already clashed with the state when it tried to cut Medicaid funding to nursing homes by $352 million late last year, which was blocked by a judge after a coalition of organizations filed a lawsuit over the cuts. The state Department of Health also proposed a 1% cut to Medicaid repayments this week to save $124 million for the coming fiscal year, to the chagrin of hospitals and other providers.

Some proposals from nonprofit association groups may be dead on arrival this year. One campaign led by a coalition of human services organizations is calling for their state funding to increase by 3% each year for the next five years, but such cost-of-living adjustments have only been enacted for certain segments of the nonprofit workforce in the past decade. 

After all, as Michelle Jackson, deputy executive director of the Human Services Council, told City & State last month, asking for the state to put forward more money without receiving more services in exchange has been a tough sell. 

Organizations can also expect lawmakers to revisit other major bills. Child welfare providers will keep an eye on state Sen. Velmanette Montgomery’s bill that would raise the evidence threshold for cases of child neglect and allow parents to be removed more easily from the State Central Registry, which lists allegations of abuse and neglect. The governor vetoed the bill in December over fiscal and logistical concerns, but indicated interest in coming to the table with lawmakers.

Assemblyman Andrew Hevesi’s high-profile bill backed by housing advocates will also be back this year. He has been pushing for the state to create the Home Stability Support program, which would establish a rental subsidy for those at risk of homelessness, since introducing the bill in 2016. This week, he drafted a letter signed by more than 100 state lawmakers to call on the governor to take it up this year, despite the $80 million price tag. Supporters argue that it would make up for the rising costs of homeless shelters if taken up. 

Of course, the tone for this year will be shaped by the governor’s State of the State speech on Wednesday and his upcoming budget proposal, which will outline the executive’s major goals and spending priorities for 2020 – and reveal which programs may be on the chopping block.