State survey highlights impact of state budget cuts

Posted by on March 10, 2010

UWP study highlights impact of state budget cuts

A statewide survey of nearly 350 agencies conducted by the United Way of Pennsylvania indicates that the 101-day delay in passing a state budget last year hurt social service agencies precisely at the time when more residents were turning to them for help.  Some are still recovering.

The report showed that 61 percent of the agencies surveyed cut services during the impasse.  Some are still working to rebuild their financial reserves, or are looking at unexpected deficits arising from higher interest costs or unemployment compensation costs.

The impasse, combined with funding cuts in the 2009-10 budget, has left the state’s safety net weaker, according to UWP president Tony Ross.

“Most agencies were able to struggle back onto their feet” since the budget was adopted, Ross said.  “But they’re wobbly, and another impasse (like last year’s) could take them out.”

A full 50 percent of respondents said they are still struggling to rebuild their financial reserves.  About one in five said steps they took to bridge the gap, like taking out new loans or spending against lines of credit, have them looking at unexpected deficits in their current budgets.

The survey results indicate that as a result of those costs, funding cuts and depressed donations from the private sector, agencies are in a weaker position to handle a similar impasse this year.  Most respondents predicted their services would start to close within two months of another halt in the flow of state aid.

http://www.uwp.org/mediacenter/newsshow.asp?id=1143