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WWL: Non-Profits in a Down Economy
Where We Live - with John Dankosky
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State budget cuts are on the way for non profits


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48:55 minutes (23.48 MB)
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Usage of their services is up – charitable giving is down – and state budget cuts are on the way for non profits.

With Connecticut facing a budget deficit pushing nine billion dollars for the next two years – everyone is bracing for deep cuts. But many who work in the non-profit sector, providing services to the needy, say now is the worst time to slash their budgets.

Food stamp usage in CT is up 9% from a year ago – and as we reported yesterday – the economy is forcing more people into foreclosure and bankruptcy – meaning they may have to rely even more on state funded services provided by non profits.

Today, Where We Live, we’ll talk with several non-profit providers about their increased role – and their decreasing budgets. And we’d like you to join the conversation – do you work for a non-profit? What changes are you expecting?

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Listener Email from Joel

Sorry I was not able to get on to the show to provide you this idea to aid the state's non-profits from having their budgets cut. It is an idea I am floating in general and any help you can give it might be useful. It is what some might say is "out of the box"--a term I thoroughly dislike but....

Anyhow, immediately below is my concept to save the the energy efficiency funds and the renewable energy fund that can also benefit great the non profits that are in jeopardy. It is what I did during the 1990 deficit when compact fluorescent were new. We relamped state buildings with them to save $4 million in the first year. But we need to put that concept on "steroids" this time to save not only the conservation/renewable funds BUT to keep numerous non-profits ets more whole than they would otherwise be under the current deficit reduction plans. See below:

Option 4 for Cutting the Deficit

I encourage people writing to legislators asking them to not take the money from the energy efficiency and renewable energy funds for a single shot to pay down the deficit. BUT the reality of it is much the same as it was during the 2003 deficit when the funds were cut by 1/3 BUT the fund survived. However, I am going to be bluntly honest. These same tactics of "don't cut me" were tried in 2003 to save the funds during a deficit and we said "---we are pure, we create jobs, we help the environment, we reduce foreign oil, etc." Are we right; you bet we are. Did it matter; not a fig.

Some of the options legislators face include: 1) taking low-income kids off health insurance paid for by the state; 2) firing state workers; 3) raising taxes; or 4) finding alternative sources of money to pay down the deficit. In this sense "we are our brothers' keeper" and must use Option 4 to buy down the deficit as well as preserve our interests. In a word, I call that "sustainability" or at least one facet of it. It's going to be much tougher this year and the following two years so let's come up with ways to dump money on the Governor's and Legislature's desks--it's the "One Thing" we have to do.

The plan below attempts to save our state energy efficiency and renewable energy funds (EE/RE) from being taken again; particularly the delivery infrastructure and the jobs that entails. Basically, it makes use of a mechanism employed in 1990 that mandated during a deficit that mandated every lighting fixture in state buildings be relamped with compact fluorescents (CFLs) to provide $4 million for deficit reduction. It passed House and Senate unanimously and made the savings goal. It prompted no program cuts, no layoffs and no tax raises. Our current Governor was among those who voted "yes" on it.

An enhanced version of that basic concept was first developed in 2003 for a deficit then but went unused. Some major points on it include:

Instead of taking the energy efficiency fund and renewable energy funds for one-shot deficit reduction, use these programs to entirely aim at state building energy reduction and to any group the state provides money to that might pay for building energy costs. This means the efficiency (electric, gas and oil) and renewable funds' money would be entirely used for state, municipal and the state-paid for buildings extending down to every museum, halfway house, group home, nursing home or any other facility that gets money from the state.

Then to get the money to pay down the deficit, the energy portions of the state grants to those organizations would be cut by the amount (or some percentage --maybe 80%) of the energy saved. This actually saves many of these from having money cut from the real important aspects of their programs to some extent as it might suffice to only take their savings from energy waste that would be eliminated under this proposal.

In a really souped up version it also includes use of combined heat and power in state, municipal and other facilities. This takes more time to implement but at least one energy service company (ESCo) has said they could give a cash advance to the state to buy down the deficit for energy savings that are realized in future years. Utilities may also be able participate if they are allowed to more fully enter the small generation market in some form. Most importantly, all this would preserve the efficiency fund delivery infrastructure--as in jobs.

The plan requires updating to take into account additional funding that may be available if the Governor/Legislature does not take sources such as RGGI, IRP, PA 05-1 DG funds, Electric Efficiency Partners funds and others.

Additional sources of funds from the federal government may also include: 1) matching funds that likely will flow from the Obama administration for energy infrastructure and jobs programs. The more we preserve CT funds, the greater the federal match; 2) Increased greenhouse gas reductions and thus more RGGI (greenhouse gas sales) funds coming in; 3) Real and sustainable green collar job growth; 4) very much enhanced energy security that may bring in Dept of Homeland Security matching funds for continuity of government service upgrades; and 5) Even, as, just one component of this, a sensible use and deployment of fuels cells on a sustained orderly development and commercialization path that has been thus far missing. US Representative Larson would love that and maybe be able squeeze out more funds to CT to match this. .

Listener Email from Bob

As usual, your show today on non-profits is insightful and enlightening.  Indirectly related to certain non-profits are the grant and tax-credit programs of the state's Commission on Culture and Tourism (CCT), which is in danger of being gutted by the governor.  Perhaps you might want to consider dedicating a program to CCT.  Just to give to some background:

Governor Rell wants to fold CCT into the office of Economic and Community Development.  In her budget proposal, the Governor intends to gut CCT by cutting its staff of 50 by 40%, mothballing the Community Investment Act (CIA), and aborting virtually all of the state’s grants and tax-credit programs associated with historic preservation.  The Commission, through its administration of these grants and tax-credit programs, generates millions of dollars in revenue and jobs for the state.  In fact, from the comparatively tiny cost of running CCT and its historic preservation programs emerge countless opportunities for economic growth—essentially they have been the state’s own ongoing stimulus package. 

Through funding from the CIA, the historic preservation division of CCT alone dispersed over 44 matching grants in the last fiscal year—grants used by individuals, organizations, and municipalities across the state to restore, adapt, and preserve historic structures.  These projects generated income for the state as well as hundreds of jobs.  And perhaps many of these projects would not have been launched without the incentive of CCT’s matching grants.  In addition, two of the tax-credit programs administered by the historic preservation division have issued $12 million in tax credits, which spurred over $200 million in private investment.  The stock market can’t approach that kind of return!

There has been a lot of talk lately about the need for shovel-ready projects that could benefit from the federal stimulus package.  Well, the state has as many shovel-ready projects emanating just from its historic preservation efforts as there are applications for grants and tax credits in the hopper.

According to a New York Times editorial (11/30/07), Connecticut ranks 40th of 50 states in government investments in tourism.  Even though tourism generates over $9 billion annually in state revenues, CCT’s budget has been cut by 30% since its creation in 2003.  But the chances are promising that tourism revenues could increase for the foreseeable future as fewer people in the region will be booking expensive vacations in faraway places.  Therefore, the state cannot afford to cripple one of its biggest money-making agencies.

The various wings of Culture and Tourism—including the tourism, film, and arts divisions—are inherently always in the public eye, and so people recognize that they serve as a beacon for tourists, and therefore tourist dollars.  Their efforts need to be sustained. 

But do not forget that the historic preservation division, composed of fewer than a dozen state workers, serves as a catalyst for jobs, economic growth, and substantial revenue for the state.  If the governor has her way, the historic preservation division will take the worst hit at CCT, since they have filled much-needed positions only within the last two years.  Returning the division to its former skeletal staff will impede the processing of all its programs, and thus hinder economic growth that is so vital to the state.  These days, Culture and Tourism is a safer bet to grow Connecticut’s economy than casino gambling.  Why does the governor seem intent on folding a winning hand?

Thank you for your consideration.


Manchester, CT