On June 30, Governor Christie issued Executive Order 209, freezing approximately $100 million in funds – $45.3 million in budgeted funding for social programs, and $53.8 million in transitional aid to municipalities – until the Legislature and public employee unions can achieve $250 million in health benefits cuts to public employees. The Governor’s press release stated that the funds “will likely remain in reserve and unexpended, until public employee health care savings are enacted.”
Based on feedback provided by affected organizations to an informal request from the Center for Non-Profits, the current and potential consequences could be devastating if the funds are not released soon.
The list of programs and organizations affected by the freeze is diverse and includes services for victims of sexual assault; programs for victims of domestic violence; prisoner re-entry programs; courtroom advocates for abused and neglected children; services for Holocaust survivors; Boys and Girls Clubs; housing and supportive services; vocational education; health services for people with cancer and aphasia; technical assistance services for small businesses; and many others.
While many have said that the impact can be lessened if the situation is resolved quickly, even in the short term the upheaval is significant. Amid such uncertainty, program planning and budgeting are difficult if not impossible. If this drags on, then for many, program cuts and layoffs are inevitable.
Although the funds have been referred to as “add-ons” to the budget, that phrase implies that these are “extras,” or frills. Nothing could be further from the truth. For years, demand for nonprofit services has continued to grow, while necessary resources have failed to keep pace. The resulting strain threatens the ability of organizations to meet vital community needs. The reality is that the budgeted funds are essential to providing critical relief to already-overburdened charities.
Nonprofit organizations are on the front lines in our communities, often serving as the first, last or only source of help for people in distress. The vast majority can show a clear and significant return on investment to taxpayers for the government funding they receive. Simply put, by virtue of their services, they are saving the government millions of dollars each year.
But the economic downturn has taken a profound toll on non-profits, who have seen demand for their services skyrocket while funding from all sources lags behind. We also know that government contracts with nonprofit partners rarely cover the costs to provide the services, with excessive government bureaucracy and late payments the norm.
Now, nonprofits have been unwittingly placed in the middle of a dispute about healthcare benefits for government employees, with which they are not involved and the outcome of which they cannot control.
These delays cause real hurt to New Jerseyans, many who often have no voice or ability to advocate on their own behalf. Our neighbors rely on these endangered programs; in many if not all cases, no one other than these nonprofits are providing these services.
Nonprofits don’t have storehouses of reserves to tap into while awaiting the release of these essential funds. If they are forced to curtail or eliminate programs as a result of this stalemate, it will be a cruel and needless punishment for the people who depend on their services.