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Agencies Bracing For Impact Of Forced Cuts

Agencies Bracing For Impact Of Forced Cuts

Many services could come under the sequester knife.

Local Jewish social service agencies are talking about increasing their employee workloads and making other changes to absorb expected government funding cuts as a result of Congress’ inability to agree on a new budget.

“As a social service agency, it is hard to imagine a program we have that will not be affected in some way, whether it is next month or in two years,” said Gail Magaliff, chief executive officer of FEGS Health and Human Services. “Cuts like this will have a ripple effect in every aspect of the economy — from research to grants for kids to go to college.”

The across-the-board budget cuts, known as the sequester, are to total about $1.2 trillion over the next decade, with $85 billion being phased in through September. Congress adopted them in 2011 as an incentive to adopt a budget. But with congressional leaders deadlocked over how to close the budget gap, the cuts began phasing in March 1.

Ron Soloway, managing director of government relations at UJA-Federation of New York, said sequestration “could cost UJA-Federation agencies tens of millions of dollars over the next decade if not amended.” There are nearly 100 agencies in the federation system.

Founded by UJA some 80 years ago as a broad-based provider of health and social services in the city, Long Island and Westchester, FEGS serves people with development and physical disabilities, those who need home care, as well as those job training or assistance finding work.

“We work with everybody from a young person in school in danger of dropping out to professionals and refugee immigrants, those on public assistance, the disabled and older workers,” Magaliff said. The group has 300 locations and serves 10,000 people a day, she added.

Because the entire economy is impacted by the sequestration, she said more people will “need employment services, there will be more family problems, increased mental health and family tensions and problems with kids. … There are just so many cuts any organization can make, so we will not be able to deliver the same kind of services.”

Stuart Kaplan, CEO of Selfhelp Community Services, said his funding comes through New York City and that he is still waiting for the city government to announce how the cuts would impact specific providers.

“A cut like that is not always passed through the service level because there are administrative expenses and direct service expenses,” he said. “Where a cut like that might exact itself we don’t know yet. … We hope to share it, but there is just so much that can be cut on the administrative side too. I would expect there would be a shared reduction, if in fact we had to take it.”

Selfhelp serves more than 20,000 seniors and at-risk individuals primarily in the city but also in Westchester and Long Island to help them maintain their independence through housing, home health care and social services. Under sequestration, there is to be a 5 percent reduction in funding to the Older Americans Act, which funds senior centers and meals on wheels.

“We are not large providers of Meals on Wheels, but through our senior centers and case management we are significant providers,” Kaplan said. “There have been threats to the Older Americans Act — four years ago and again three years ago — but it never happened.”

Asked what his agency might do to absorb the cutbacks, Kaplan replied: “There potentially could be an increase in the number of clients seen by each staff member. While funding changes, the needs of the clients do not, and so we have to figure out how to provide the same level of service by doing more with less. And since 75 percent of our costs are labor costs, if you have to make reductions you figure out how to use labor more efficiently.”

JASA (Jewish Association Serving the Aging)’s CEO, Kathryn Haslanger, said her group’s programs are “going full speed ahead, including our home delivered meals and our nutritional program to seniors.”

“At this point, we have no other instructions,” she said. “We are concerned, however, about what will happen.”

At Jewish Home Lifecare, which provides a full range of geriatric, rehabilitative and home health care services for 11,000 people annually, plans are being developed to address a 2 percent cut in Medicare funding. That translates into a cut of $107,000 each month, according to an agency spokesman, Bruce Nathanson.

Another agency bracing for a funding cutback is the Jewish Board of Family and Children’s Services (JBFCS). It works with children with behavioral problems and mental illness — a total of 30,000 children and their families — at 50 locations in the city and at a residential treatment center in Hawthorne in Westchester.

“Most of our clients are low-income and so are funded by Medicaid, which is exempt from the sequester, but that does not mean we are not impacted,” according to David Rivel, JBFCS’ chief administrative officer. “We get some money from [Housing and Urban Development] and have been told to expect a 3.5 percent cut in those funds. That will mean between $25,000 and $30,000 for us annually. That is something we could probably manage were there not two more significant issues.

“One is the fact that there will be less money coming to the state, and the state will then have to cut its budget. That surely will impact us, although it is unclear how the state will cut its budget.”

And second, Rivel pointed out, the federal government provides subsidies to New York State for public housing and other affordable housing: cuts there “would likely mean more homeless and more mentally ill on the streets — and these are the clients we work with.”

“So even if sequestration does not directly affect us in terms of cuts, the demand for our services will go up without any additional revenue to pay for it,” he added.

Although the $85 billion cut this year is unprecedented, Rivel observed that “we as a human services system have experienced cuts for a number of years running, to the point where it is a very fragile system.”

Soloway, the UJA-Federation official, said that as with all service systems funded in the state during the recent economic downturn, “not-for-profit, community-based services have already had more than $350 million, or close to 9 percent, in cuts recently.”

Rivel noted that most of his agency’s programs have deficits. As a result, the agency raises about $12 million a year to help cover its $200 million budget. Despite that, the agency had a deficit last year that forced it to dip into its reserves, and Rivel said he expects to have another deficit this year.

Asked if his agency could simply close its doors to new patients, Rivel said, “I don’t know we could do that or would want to do that. We will figure out how to pay for it, but it is not going to be easy. And hopefully it will not go on for a very long time.”

Magaliff of FEGS pointed out that because so much money is being cut from the budget, “the hit will be felt at different times and in different ways. That’s not to say people can’t make do with less. There are always ways of adjusting. But there already have been significant cuts over the last several years, and this adds to an already very tight delivery package.”

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