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"Finding the Middle Ground: Navigating Funding Challenges for Nonprofits in Connecticut"

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Republican American | 2/2/24 - Connecticut taxpayers save loads of money on their government’s practice of contracting nonprofit agencies to perform essential services, rather than assigning these tasks to state employees.

But state leaders evidently are pushing a good thing past the point of fairness and functional utility, and have been for some time. As Connecticut columnist

Chris Powell wrote in April 2022, “Nonprofits do most of state government’s social work for half the cost of state government’s own employees.”

This week, nonprofit representatives have been issuing vehement demands for a funding increase of $180 million. As the Connecticut Mirror reported Jan. 28, “Connecticut already spends roughly $2.1 billion hiring nonprofits to treat people with disabilities, mental health or addictive issues, and to help incarcerated individuals transition back into the community. Nonprofits argue that largely stagnant state funding for decades has left many agencies in a fiscal hole, cutting programs and paying low salaries that push annual employee turnover above 20%.”

These demands may strike ordinary taxpayers as incomprehensibly large, but in the proper context, they’re quite small. One hundred eighty million dollars is a tiny fraction of the state government’s budget of $26 billion for 2024-25. How tiny? Approximately 0.7%.

The disparity between what the state pays its unionized and professional workforce, and what the nonprofits are able to pay their workers, is especially staggering when one considers the increase in state spending since 1990, the last year in which Connecticut had no income tax. That year, the state budget was about $8 billion.

Since then, as contractual payments to nonprofits have stagnated, the state budget has ballooned to $26 billion.

If the state had simply held spending in line with the national inflation rate for its own favored constituencies — unionized workers and political appointees — the 2024-25 budget would be about $18.7 billion. That’s more than $7 billion less than the current spending level.

In fairness, the state’s population has increased by about 10% since 1990, to 3.6 million, so a budget based only on inflation and a clearly identifiable rise in demand — more residents clamoring for state services — might reach $20.5 billion, or $5.5 billion less than today’s bloated budget.

Gov. Ned Lamont and other defenders of the budgeting status quo talk incessantly about “guardrails” that have been implemented to suppress government spending.

“Some state officials counter that government is doing all it can, given the spending cap and other fiscal guardrails designed to help Connecticut reduce more than $80 billion in unfunded retirement benefit obligations and bonded debt,” according to the Mirror’s report.

“The preliminary $26 billion state budget lawmakers approved last June for the 2024-25 fiscal year already exceeds the spending cap by about $30 million.”

Rather than engaging in some kind of fiscal Rube Goldberg solution to mollify the nonprofit leaders and avoid annoying any of the favored constituencies, lawmakers

should find ways to spend that $180 million on the nonprofits while spending $180 million less elsewhere in the budget. Perhaps what Connecticut needs is a legislative leader in the mold of the late U.S. Sen.

William Proxmire, D-Wis., whose monthly Golden Fleece awards during the 1970s and ‘80s exposed wasteful or frivolous spending. Surely Gov. Lamont and the legislature can find a nip here and a tuck there, and deliver the requested cash to nonprofits whose efforts are neither wasteful nor frivolous.

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