By James Parrott and Angela Butel
Human services aid from New York State helps localities pay for direct services, including public assistance and services provided through nonprofits. In this report we examine New York State, New York City and county budget data to understand how State funding trends affect localities across the state and New York City in particular.
Since FY2011, most areas of state human services funding have suffered as a result of the Governor’s stringent budget policy. This is true throughout the state, particularly in the downstate suburbs. This human services budget austerity, at a time of increasing state revenue collections, has also had a profound adverse impact on nonprofit human services providers funded under local and state contracts.
A companion Center report to this one, Why Washington Matters: Federal Spending is Crucial to New York Children and Families, explored the vulnerability of human services funding to proposed budget-cutting by Congress in 2017 and 2018. Federal funds for New York City human services were actually slightly higher (four percent) in 2018 than at the end of the 2008-09 Great Recession. In contrast, State funding for City human services was nine percent less in FY2018 than at the end of the Great Recession.
This human services disinvestment is evidence of State policymakers’ failure to use the state budget to respond to the very real daily struggles of many New Yorkers. As the State Legislature makes decisions about the Fiscal Year 2020 budget in the coming weeks, we call on them to consider how cuts to human services funding impede localities’ ability to provide the supports that children and families need to thrive.
Since the end of the 2008-09 Great Recession, New York’s economy has grown steadily but State funding for human services aid to local governments has been slashed by 26 percent (FY2011 to FY2018.)
Recovery from the recession has been uneven and many areas contend with continued economic hardship and child poverty. The number of food stamp recipients in the suburbs and upstate is 57 percent higher than before the recession, and child poverty in several upstate cities ranges from 30 to 50 percent. These localities are forced to meet increased need with less funding help from the State.
Downstate suburban counties have been hit the hardest by decreases in local aid. Nassau, Suffolk, Westchester, Rockland, and Orange counties experienced a collective 25 percent decline in State funding from 2011 to 2017 (the latest year for county-level, calendar-year detail), compared to an overall seven percent decrease in funding for upstate counties, and a 10 percent falloff in New York City. The corresponding statewide decline in human services aid is 21 percent for 2011-17 and a full 26 percent for the FY2011-18 term.
The reduction in State local aid means counties have had fewer resources to fund services. Inflation-adjusted spending from all sources (local, state and federal) on human services, mental health and public health plummeted by 46 percent from 2011 to 2017 for the five downstate counties and by 32 percent for 51 upstate counties.
Since FY2012, Governor Andrew Cuomo has proposed a 2 percent cap on increased spending for all State operating funds, placing fairly tight limits on expenditure growth. This spending cap has not been applied evenly; while Medicaid and school aid have increased 4 percent per year since FY2012, human services local aid has fallen by 5 percent annually.
Localities spend a large part of State aid on contracts with human services nonprofits. Yet, these nonprofits have gone for years without even minimal cost-of-living adjustments and contract reimbursement rates have consistently been too low to fully cover nonprofits’ costs. This adversely affects the predominantly female nonprofit human services workforce, who are paid significantly less than workers in analogous positions in other fields.
State human services aid to New York City remains nearly nine percent (as of FY2018) below pre-FY2011 levels when adjusted for inflation. In FY2018, the State provided a total of nearly $1.9 billion in human services aid to five New York City agencies providing assistance to the city’s children and vulnerable families.
If State human services funding to localities had grown at the same rate as the overall State budget since FY2011, the proposed FY2020 budget would be 44 percent higher (+ $2.2 billion) than proposed by the Governor, and the amount going to New York City would be 20 percent greater (or roughly $360 million higher than current funding).