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Governor: Cuts Are Necessary

July 16, 2009 By:
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Gov. Ed Rendell

When Jay Spector, president and CEO of JEVS Human Services, recently looked over yet another round of proposed state budget cuts, one particular item caught his eye -- and his angst.

As part of an effort to shore up a $3.2 billion budget gap and end an impasse with the Republican-controlled State Senate, Pennsylvania Gov. Ed Rendell proposed a 4.2 percent cut -- from $168 million to $161 million -- in programs to assist mentally challenged individuals.

Last year, JEVS received a combined $20 million from both the state's Department of Health and the Department of Public Welfare to assist about 400 mentally challenged individuals from the wide gamut of religious and ethnic backgrounds, according to Spector.

According to the latest annual report from JEVS, the Public Welfare department provides the largest source of its yearly revenue -- $35 million out of an $82 million budget for the 2008-09 fiscal year for its combined services, including its more well-known job-training and vocational programs.

If those reductions go through, said Spector, JEVS may be forced to cut from its program about 40 people who have few other options available to them.

"These are very expensive programs to operate," he said, referring to the residence and day-care services. "I'm hopeful that these cuts do not occur."

According to the most recent figures provided by the Jewish Federation of Greater Philadelphia, Jewish agencies in the Philadelphia area received $52.7 million in the last round of state funding.

Most of the money goes toward programs run by Jewish agencies that benefit the broader community, such as foster-care services, drug and alcohol treatment, child care and food for needy families. A few initiatives -- like one that helps private schools purchase textbooks and materials -- specifically target Jewish causes.

With the demand for services rising as the economy has faltered, a number of Jewish entities are hoping that the latest budget crisis doesn't result in sizable reductions from the state.

"These are crucial things. In this economic climate, more people need more services," said Robin Schatz, director of government services for Federation.

'Fight As Best We Can'
Since the start of the year, the Pennsylvania Jewish Coalition has lobbied lawmakers in both chambers, urging them to work to preserve as much social-service funding as possible.

Hank Butler, the organization's executive director, said that he has been telling Jewish agencies to forget about any chance of funding increases and to brace for the possibility of cutbacks.

"All I'm hearing is, 'Hank, it's a tough budget,' " Butler said, referring to his meetings with lawmakers and their staffs. "We're just trying to fight as best we can to make sure that those programs that are needed the most are maintained."

Butler noted that his top priorities include preserving corporate tax credits that go toward private-school scholarships and maintaining funding levels for human services.

Most lawmakers realize that these programs need to be maintained, said Butler, "but there is also an acknowledgment that there is no money to do it."

In February, when the budget deficit was thought to be closer to $2 billion, Rendell proposed a $29 billion state budget -- $1 billion more than the 2008 figure.

But over the course of several months, it became apparent that the budget gap topped $3 billion. Because of the requirement that the state operate with a balanced budget, the deficit meant either spending less money or raising taxes.

In May, the Republican-controlled State Senate passed its own $27 billion budget -- a plan that GOP leaders claimed was more fiscally responsible than Rendell's. Critics, including the governor, said that this version included such severe cuts that it would seriously hamper Pennsylvania's ability to function.

Rendell initially replied with a proposed income-tax hike, but that idea met firm resistance from Senate Republicans.

Late last month, Rendell proposed a number of further budget cuts -- totaling more than $500 million -- along with layoffs and smaller tax increases. All sides have been involved in intense negotiations. Late last week, House Republicans introduced their own version of the budget, one that Rendell said represented a positive step.

'Sharing the Pain'
State Sen. Andrew Dinniman (D-District 19), who sits on the Federation's Kehillah of Chester County Council, said that whichever way you slice it, the pies are going to be cut drastically.

"We are going to have to learn to live within a constricted budget within the next couple of years, and everyone is going to have to end up sharing the pain," said Dinniman.

He said that faith communities are going to have to fill in the gaps left by declining government funds for human services.

With the deadline for a budget having come and gone on July 1, Pennsylvania is once again operating without the ability to pay most of its bills. It's not clear how long state money will keep flowing to existing programs.

Among those bracing for pain are the state's nursing homes, which are facing the prospect of a disruption to Medicaid reimbursement payments.

Such reimbursements make up about 45 percent of the operating budget of the Madlyn and Leonard Abramson Center for Jewish Life in Horsham, according to CFO Andy Bronstein, who said that roughly 70 percent of residents there are on Medicaid.

Should the state stop its payments, Abramson possesses reserves to operate uninterrupted, at least in the short term, he said.

Dinniman added that lawmakers would ensure that health facilities aren't jeopardized, saying that the General Assembly could pass an emergency stopgap budget to pay for things like Medicaid reimbursements.

The prospect of the state not being able to pay its bills -- let alone the looming possibility that the next budget will offer fewer dollars -- also worries Jack Dembow, president and CEO of the Jewish Family and Children's Service.

JFCS is one of more than a dozen organizations -- and the lone Jewish one -- that has a contract with Philadelphia's Department of Human Services to run foster-care programs funded by the state. Roughly 160 children are in JFCS' foster-care program, which last year got $3.5 million from the state.

"The anxiety level this year is higher than I have seen in my career," Dembow said, referring to all local nonprofit agencies that receive state funding.

David Rosenberg, director of Federation's Center for Social Responsibility, expressed particular concern about a potential $1 million reduction in funding to the State Food Purchase program, from $19 million to $18 million.

Those dollars help provide goods to charitable food distributors such as the Jewish Relief Agency and the Mitzvah Food Project. In the previous cycle, JRA received $317,000 from the program; Federation got $93,000 for the Mitzvah Food Project.

Rosenberg also cited a proposed 12 percent reduction -- from $27 million to $24 million -- in Department of Education support for textbooks, materials and equipment to nonpublic schools.

Rosenberg said that four area days schools -- Abrams Hebrew Academy, Jack M. Barrack Hebrew Academy, Politz Hebrew Academy, and the Raymond and Ruth Perelman Jewish Day School -- shared a combined $129,000 from this fund last year.

Federations across the state have made the preservation of available Earned Income Tax Credits a top priority. Those credits allow companies to receive tax breaks for donating to school scholarship funds; this has been a steady source of scholarship money for Jewish day schools.

Butler said that a drastic cut seems to be off the table for now, yet he's not convinced that the program is out of the woods.

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