DATE: February 21, 2020
TO: Appropriations Committee
FROM: Gian-Carl Casa, President and CEO, The Alliance

RE: H.B. 5005 An Act Adjusting The State Budget For The Biennium Ending June 30, 2021: Health Subcommittee

Good evening Senator Osten, Representative Walker, Senator Formica, Representative Lavielle and members of the Appropriations Committee.

My name is Gian-Carl Casa, President and CEO of the CT Community Nonprofit Alliance (The Alliance). The Alliance is the statewide association of community nonprofits. Thank you for the opportunity to testify on the Governor’s proposed budget adjustments.

Community nonprofits provide essential services in every city and town in Connecticut, serving hundreds of thousands of people in need – and employing 117,000 people. They are an important part of what makes Connecticut a great place to live and work and an important piece of our economy.

Since 2007, community nonprofits have lost at least $461 million in state funding that has not kept pace with inflation. At the same time, demand for community services continues to increase. For example:

• The opioid crisis has increased the need for substance abuse treatment – yet grant funding has decreased.
• More than 2,000 people with Intellectual/Developmental Disabilities languish on a waiting list for services.

I am here today to ask you to help nonprofits in FY21 and into the future. We urge you to take advantage of this opportunity and appropriate $461 million over five years for community nonprofits. We urge you to:

1. Increase funding by the full $461 million (28%) by FY25;
2. Appropriate $128 million in new funding for community nonprofits in FY21, (a state net cost of $67 million after federal reimbursement) a 7% increase; and
3. Index rates to inflation, to ensure that state funding will better keep pace with increased costs in the future.

Community nonprofits and the people they serve have made substantial sacrifices during the past decade of State budget deficits, shouldering deep cuts to programs and services and, in some cases, being flat-funded. As costs and caseloads rise, flat funding is no different than a cut. This year you have an opportunity to address the impact of chronic underfunding and increase the stability of the nonprofit sector.

The failure of state funding to keep up with demand has a cost. Program cuts often mean reduced access, hurting many who live in our state. It hurts Connecticut’s overall quality-of-life.

No longer can anyone say, “nonprofits will do it anyway.” While it’s true that nonprofits are driven by their missions and dedicated to their communities — stretching every dollar to serve as many as possible – the reality is that without adequate funding, they are not able to meet every need.

Connecticut’s economy is finally on the road to recovery, as illustrated by a budget outlook that is the strongest it has been in over a decade.

According to the Office of Policy & Management’s November 2019 Fiscal Accountability Report, Connecticut’s budget surplus will be a cumulative $5.154 billion by Fiscal Year 2024, including the state’s Budget Reserve Fund, which will be filled to its statutory capacity of 15% by Fiscal Year 2021.

It is now time to restore funding and invest in the people served by community nonprofits – adults struggling with addiction, people with disabilities languishing on waiting lists for services, children and families in need of mental health services.

The need is acute – and the state revenue picture is finally healthy.

Community nonprofits and the people they serve ask “if not now, when?” If we cannot do it now, during the surplus years between now and 2024, when will be the right time? If we cannot do it now, will we in years that come after that?

We know you face many challenges and that budgetary/revenue requirements make some appropriations more difficult than others. You’ve risen to the occasion and found ways to meet other needs despite such constraints. We ask that you do it again.

Funding for programs operated by community nonprofits often bore the brunt when times were difficult. They did their part. Now times are better, and the more than 500,000 people who rely on nonprofit services should share in that.

We and they stand together to ask that you take this opportunity and choose the families, friends and neighbors who rely on those essential services.

Thank you for your consideration, and your concern for the people of our state.

** ** **

Attachments:
1. Department-specific budget information for DDS and DMHAS
2. Alliance White Paper: Increase Funding by $461 Million for Community Nonprofits

Department of Developmental Services

• Please support the Governor’s proposal in the DSS and DDS budgets to create an incentive payment model to help move people with Intellectual/Developmental Disabilities into less intensive and more appropriate levels of care.
• Please ensure that this new program furthers the creation of a better continuum of care that provides the proper services for everyone who is eligible for them.
• Please also do not just use the savings it creates to balance the budget, instead taking the opportunity to reinvest that savings into increasing rates and/or moving people off the waiting list.

Please oppose the Governor’s proposal to cut $2 million from the Behavioral Support Program. The Governor’s budget says that cut reflects “natural attrition.” If that is the case, the funding should be reinvested to increase rates for those services.

Department of Mental Health and Addiction Services

• The need for behavioral health services is on the rise and costs are not keeping up.
  Funding for behavioral health has been cut, even as demand increased,
• Since Fiscal Year 2013, grant funding for substance abuse services has been cut by 29%,
• From 2013 to 2018, opioid-related overdose deaths increased from 417 in 2013 to a record high 1,200 in 2019.
• Medicaid rates do not cover the cost of care
  Community providers operate at a loss for nearly every service. In 2015, the annual loss for the top ten procedures by volume was more than $27 million for approximately 250,000 service hours.
• With inadequate reimbursement rates, the State not only fails to maximize its federal matching funds, it risks the provision of some of the most highly utilized, critical behavioral health services.