Today, GPNP Executive Director Samantha Balbier testified before the House Human Serivces Committee. A bulleted summary of her testimony appears below; her full testimony is available here.
Summary of Balbier’s Testimony
1. Government has historically paid less than the actual cost of essential human services. In addition, the carrying cost on financing funding gaps during the FY 2015-2016 budget impasse was devastating for human service agencies. They will face further destabilization if there is another budget impasse or continued flat funding or cuts that do not meet rising demand.
2. Reimbursement rates need to be increased based on rising labor costs as a result of the changes to the Fair Labor Standards Act’s (FLSA) overtime regulations. GPNP is in full agreement with the intent of ensuring fair wages for all employees, however the increased costs -- which take effect in December, midway through many organizations’ fiscal years -- will challenge nonprofit service providers’ service models and budgets. Many employees in the nonprofit sector earn less than the new overtime threshold of $47,476 annually ($913 per week), and GPNP estimates that the FLSA changes will have a 5-10% expense consequence for organizations’ budgets. Employers must pay time-and-a-half overtime pay -- not compensatory time -- to all employees under the new threshold who work more than 40 hours per week. Government cannot expect human service providers to fundraise their way through the forthcoming shock of increased labor costs.
3. GPNP strongly urges the General Assembly and the Governor to reach a bipartisan and cooperative agreement that results in a responsible on-time budget that fully funds human services. Full funding for human services means allocating enough resources to meet the increasing service demands in communities along with the rising labor costs facing providers. Further funding cuts (including flat funding) and/or budget delays will be devastating and negatively impact service availability and delivery. This will impact millions of Pennsylvanians who receive services in addition to the dedicated employees who earn their livelihood working for nonprofit service providers.
GPNP recommends four policy changes for the House Human Services Committee and the General Assembly to implement. GPNP joins with the Public Health Management Corporation to recommend:
1. Expanding the current definition of essential provider to include nonprofits that offer health, human, and social services. This will ensure that there is no lapse in funding due to another budget impasse.
2. Establishing a system of expedited payments so that service delivery is uninterrupted, which will prevent agencies from accruing additional interest resulting from delayed payments.
3. Reimbursing nonprofits for interest accrued during the budget impasse resulting from borrowed funds. This will enable organizations to continue providing high-quality services without diverting funds away from their charitable service-oriented missions to make debt service payments.
GPNP also recommends:
4. Providing resources to meet dramatically increasing service demands and labor costs by restoring the 10% cut to Human Services Block Grant funding made during FY 2012-2013, which now totals $350 million. The County Commissioners Association of Pennsylvania recommends this same action as part of their 2016 legislative priorities.
Community Human Services CEO and GPNP Advisory Team member Adrienne Walnoha also testified during the hearing. According to The Patriot-News:
Adrienne Walnoha, executive director of Community Human Services Corporation based in Pittsburgh [and a GPNP Advisory Team member], said she and her partner had no other option but to empty their retirement accounts just to replace the damaged roof of their house. Despite their personal finance woes, the main concern of the non-profit employees lies with the clients they've had to turn away. "[During budget impasses] we are to look at the thousands of citizens of Pennsylvania pouring into our office and say 'we have no bed for you, sleep in your car in 2 degree weather. We have no food for you, go hungry. Our psychiatrist can't see your mother so you will have to figure out another way to manage her schizophrenia," Walnoha said angrily. "You expect us to do what government can't or won't."