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January 29, 2024

CT social service groups seek $180M to offset some inflation loss

ARIELLE LEVIN BECKER / CTMIRROR.ORG Heather Gates, executive director of the mental health agency Community Health Resources
By Keith M. Phaneuf, CT Mirror

Undaunted by warnings of a tight state budget, the hundreds of nonprofits that deliver most state-sponsored social services have a big financial ask.

But it’s only to offset a fraction of what they’re already losing to inflation.

The CT Community Nonprofit Alliance is asking the General Assembly and Gov. Ned Lamont to boost spending on their services by nearly $180 million in the fiscal year that begins July 1. 

Connecticut already spends roughly $2.1 billion hiring nonprofits to treat people with disabilities, mental health or addiction issues, and to help incarcerated individuals transition back into the community.

According to Gian-Carl Casa, president and CEO of the nonprofit alliance, the proposed increase would serve two purposes:

  • Given that most funding in recent years has been directed to nonprofits serving people with intellectual disabilities, the latest ask would bolster resources for nonprofits serving other communities.
  • It then would also provide a 5% rate increase for all nonprofits.

“Nonprofits have waited to be the priority for many years,” said Casa, whose group represents about 300 community-based agencies.

Nonprofits argue that largely stagnant state funding for decades has left many agencies in a fiscal hole, cutting programs and paying low salaries that push annual employee turnover above 20%.

The alliance estimates the sector collectively loses $480 million once inflation since 2007 is applied.

And while it is somewhat understandable that state officials haven’t resolved the entire problem at once, Casa said what is “not so understandable is the reluctance to provide the services that Connecticut residents need today.”

Heather Gates, president and CEO of Windsor-based Community Health Resources, said her agency has been forced to leave 42 clinician jobs unfilled this fiscal year.

But Gates, whose nonprofit services about 27,000 people annually with substance abuse issues and behavioral health needs, said the reality behind those vacant jobs is scary.

“That means there are increases in suicides,” she said. “There are children who are not getting the behavioral health services we know they need.”

Gates added that, “This is not an abstract discussion. This is about real individuals dying because the state of Connecticut is not addressing the needs.”

But some state officials counter that government is doing all it can given the spending cap and other fiscal guardrails designed to help Connecticut reduce more than $80 billion in unfunded retirement benefit obligations and bonded debt.

Nonprofits received about $110 million extra in 2022, and by 2023 ongoing payments had risen by nearly $225 million above 2021 levels.

Additional rate increases were not approved for this fiscal year or next, though the earlier rate adjustments were maintained. And the state also gave nonprofits about $71 million from surplus and other one-time sources last fiscal year, and dedicated another $103 million for the industry both this fiscal year and next from the same categories.

“Governor Lamont recognizes the incredibly vital role of the state’s nonprofits in providing life-changing services that lift people up and help our communities thrive,” Lamont spokeswoman Julia Bergman said. 

But the administration also has insisted lawmakers must work within all fiscal controls, including a spending cap that keeps growth of most budget segments in line with increases in personal income and inflation.

And the preliminary $26 billion state budget lawmakers approved last June for the 2024-25 fiscal year already exceeds the spending cap by about $30 million, according to the most recent cap calculations by Lamont’s budget office.

But critics of this system argue the “fiscal guardrails” the governor frequently touts, which were renewed unanimously by legislators last February, are forcing the state to save excessively at the expense of core programs like education, health care and social services.

Connecticut has accumulated roughly $11 billion in budget surpluses since 2017, and is projected to end the current fiscal year with close to $645 million left over.

Sens. Cathy Osten and Matt Lesser both said legislators must find some way to do more for nonprofits.

Osten, who co-chairs the Appropriations Committee, said interest groups collectively already have asked for more than $600 million in additions to the preliminary budget for next fiscal year. Besides social services, advocates also are pushing to enhance funding for public colleges and universities, nursing homes and federally qualified health clinics and also to improve Medicaid rates for physicians and other providers.

“Suffice it to say there is not $600 million available,” Osten said. 

But she added she would introduce a bill to ensure greater equality among funding for nonprofits. Most recent state increases to improve wages among nonprofits have been restricted to those agencies serving clients with developmental disabilities.

And Lesser, who chairs the Appropriations Committee’s Human Services Subcommittee, said lawmakers can’t keep leaving many needs unaddressed while allowing the budget to continue racking up huge surpluses.

“It will fall apart,” he said. “We will have an impossible task satisfying basic budgetary needs without at least some adjustment to the spending cap.”

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