DATE:   February 19, 2021
TO:       Appropriations Committee
FROM:  Julia Wilcox, Manager of Advocacy & Public Policy, The Alliance
RE:        H.B. 6439 An Act Concerning The State Budget For The Biennium Ending June Thirtieth, 2023, And      Making Appropriations Therefor – Conservation & Development Section

Good afternoon Senator Osten, Representative Walker, Senator Miner, Representative France and distinguished members of the Appropriations Committee:

My name is Julia Wilcox, Manager of Advocacy & Public Policy at the CT Community Nonprofit Alliance (The Alliance). The Alliance is the statewide advocacy organization representing the nonprofit sector.

Thank you for the opportunity to testify on H.B. 6439 An Act Concerning The State Budget For The Biennium Ending June Thirtieth, 2023, And Making Appropriations Therefor.

Community nonprofits provide essential services to over half a million individuals and families in Connecticut every year, and employ 14% of Connecticut’s workforce, improving the quality of life in communities across the State.

We respectfully request that the legislature increase funding by $461 million over five years for community nonprofits. Since 2007, community nonprofits have lost at least $461 million in state funding that has not kept pace with inflation or adequately covered increased costs and demand for services over the last thirteen years. We urge you to please consider the following recommendations:

1. Commit to increasing funding by the full $461 million, or 28%, by Fiscal Year 2026;
2. Appropriate $128 million (a state net of $67 million after federal reimbursement) in new funding for community nonprofits in Fiscal Year 2022, a 7% increase;
3. Index increases to inflation, to ensure that state funding will keep pace with increased costs in the future.
4. Hold nonprofits financially harmless from the impact of COVID-19.

The COVID-19 pandemic exacerbated the impact of inadequate funding for nonprofit services and brought unanticipated and unbudgeted costs and operational challenges for many community nonprofits, such as:

• Closing arts and cultural venues indefinitely due to the inability to socially distance safely indoors.
• Procuring expensive and hard to find Personal Protective Equipment (PPE) and cleaning supplies;
• Providing hazard pay for essential workers on the front lines with a higher risk of exposure;
• Creating telehealth services seemingly overnight, and purchasing necessary computers, cybersecurity, online meeting platforms and training for both staff and people receiving services.
• Many community nonprofits never closed their doors even as the pandemic worsened.

Conservation & Development Subcommittee

Department of Housing

Nonprofit homeless services organizations, and the people who work for them, play a critical role in protecting and assisting Connecticut’s most vulnerable people. During the COVID-19 pandemic emergency, homeless services have been an important part of the state’s critical infrastructure and emergency response system.

Regardless of their essential role homeless services organizations continue to be funded by state agencies at levels far below the actual cost of delivering homeless and housing assistance services.

Please oppose the reduction in the Governor’s budget to Housing/Homeless Services by $3 million in each fiscal year and increase funding in that line item to reflect the increased funding for providers referenced above.

This line item provides funding for a variety of critical housing and homelessness services and supports including the Rental Assistance Program (RAP) – as well as frontline homeless services, outreach to unsheltered individuals, and emergency shelters.

Nonprofit homeless services organizations play a critical role in protecting and assisting Connecticut’s most vulnerable populations. During the COVID-19 pandemic emergency, homeless services has been an important part of the state’s critical infrastructure and emergency response system. Their herculean effort to decompress shelters and prevent COVID-19 transmission and outbreaks among the homeless population have protected not only people experiencing homelessness, but the whole state. And rates of housing instability have increased as a result of the pandemic, homeless services organizations have prevented thousands of people from losing their homes.

Like community providers across the entire human services system, homeless services providers continue to be funded by state agencies at levels far below the actual cost of delivering homeless and housing assistance services. These services include shelter operations and case management, homeless outreach, shelter diversion and housing problem-solving, rapid re-housing case management and housing navigation, supportive housing program operations, and supportive housing case management. For many years, the State has asked these organizations to do more with less, to maintain the same high quality of services without any additional funding, and in some years, while sustaining funding cuts. All the while, costs of operation have increased by as much as 28% over the last 14 years. This model is not sustainable and requires the legislature to act now to increase funding.     

In the midst of a deadly pandemic, now is not the time to cut funding to these organizations, or to, as the Governor’s budget proposes, return savings created by the CHESS Initiative to the General Fund. Instead, we urge the Committee to reinvest those savings directly to providers to enable them to continue to better serve the community and continue to keep their clients and critical staff safe, and to increase funding by $461 million over the next five years to housing and homeless services providers along with other providers across the state’s service-delivery system.

Department of Economic and Community Development

The Alliance’s request to increase funding by $461 million over the next five years also includes nonprofit arts and culture programs that enrich the quality of life for every community in Connecticut and contribute substantially to our economy.

The Creative Economy is Essential to Connecticut[i]:

• $9.3 billion is generated annually in Connecticut by the creative economy
• 3.5% of GSP generated annually in Connecticut by the creative economy
• 10,403 creative businesses in Connecticut
• 58,932 creative positions/workers in Connecticut

The Coronavirus Pandemic Has Devastated Connecticut’s Creative Economy:

• $2.4 billion: lost revenue for creative economy businesses in 2020 in Connecticut (est.)
• 33,258 creative workers unemployed by COVID-19 in Connecticut  

Arts, Cultural and Historic Preservation programs that enrich our communities are provided by many nonprofit organizations in Connecticut. Visual and performance artists and cultural organizations enrich the quality of life for every community in Connecticut and contribute substantially to our economy.

We respectfully request the Committee require 40% of money in the Tourism Fund be allocated to arts and culture (the remaining 60% to tourism). The forty percent allocation reflects the current process for allocation. It does not change the funding to either line item but serves to formalize the requirement.

Please support the Tourism Fund Grants as proposed by the Governor. The Governor’s proposal transfers resources from the General Fund, $9.8 million and $3.1 million in FY 21 and FY 22, respectively, to maintain support of the Tourism Fund, which provides a number of grants administered by the Department of Economic and Community Development. The Tourism Fund is facing an estimated operating deficit of $6.9 million in FY 21, according to OPM’s monthly statement of January 2021.

Please change the name of the “Tourism Fund” to the “Arts, Culture and Tourism Fund.” This change more accurately describes its role in providing state funding to all three of these sectors. Please also change the name of the “Statewide Marketing” budget line to “Statewide Tourism Marketing.” This change will reflect the critical and expansive role of Tourism in the overall economy.

Finally, there is consensus among arts and cultural organizations to end the practice of creating new line items in DECD for specific programs. The current funding allocation ($13 million) is unevenly distributed between line items and the competitive art and culture grant program within the Arts Commission line item ($1.4 million). This limits the amount of funding to worthwhile, new or innovative programs not currently earmarked in a line item to receive funding.

Thank you again for the opportunity to provide testimony this afternoon. Please do not hesitate to contact me with any questions or recommendations.

Julia Z. Wilcox, Manager of Advocacy & Public Policy
JWilcox@ctnonprofitalliance.org

Appendix: White Paper: Increase Funding by $461 Million for Community Nonprofits

[i] Bureau of Economic Analysis, US Dept. of Commerce: Connecticut Arts and Cultural Production Satellite    

     Account (2017 data – released 3.17.20)