Federal shutdown, PA budget gridlock threaten Centre County nonprofits, governments
.jpeg "Pennsylvania legislators have yet to pass the commonwealth’s budget, and with the federal government shutdown, Centre County local governments and nonprofits could face challenging funding decisions.")
Pennsylvania entered its fourth month without a state budget Wednesday, the same day the federal government shut down after Congress failed to reach a spending deal Tuesday.
In Centre County, like elsewhere in the state, nonprofit dollars are on the line, while local governments hope for a resolution to both funding impasses.
The commonwealth, whose fiscal year began July 1, is the only state without even a temporary funding solution. Pennsylvania legislators remain at odds over how much to spend and where to spend it.
“It really is the perfect storm,” said Jennifer Pencek, the CEO of domestic and sexual violence prevention nonprofit Centre Safe.
While the organization, which received $1.6 million in federal grants and spent $2.6 million overall last fiscal year, isn’t “doing doomsday philanthropy,” as Pencek put it, “there’s only a certain amount of time before we have to make challenging decisions.”
Time is running out for new funding
Nonprofits are coming off eight months of federal spending cuts at the hands of President Donald Trump’s administration.
Christine Bishop, CEO of Centre County Youth Service Bureau, said about half of her organization’s budget comes through county government — much of it from state sources — with another 10% directly from federal grants. Both are now in question.
“Since late January, our federal funding has just been a lot less certain than it has been previously,” said Bishop, whose organization received $1.4 million in grants directly from government sources last fiscal year. “We’re spending a lot of energy on making sure that we’re drawing down.”
Earlier federal cuts to nonprofits and the social safety net meant families who relied on Bishop’s programs are now in more precarious positions, stretching the bureau’s resources. Despite the stress, Bishop said the organization is starting from a “really strong position” going into the shutdown, in part due to good budgeting by the county.
But that strong position, she warned, can weaken.
“The last shutdown, I believe, was 35 days. We could get through 35 days again,” she said, but “every week that this goes on, that’s creating a real burden on our agency.”
The financial picture varies by organization, according to Centre Foundation CEO Molly Kunkel. Some have weathered the lack of funding from the state and federal governments, while others, like the arts group 3 Dots Downtown, have been forced to cut paid staff.
“My expectation is from talking to people that everybody’s been doing OK, but I think we’re probably getting towards the end of that period of time when people’s contingencies are going to start to run out,” Kunkel said.
A group of nonprofit associations implored Pennsylvania’s governor and the legislature in a letter last week to pass a budget, warning 80% of nonprofits it polled would run out of emergency funds by October.
Nonprofits are looking elsewhere for funds
Without reliable partners at the state and federal levels, nonprofit executives are turning to philanthropy and private foundations, even as competition for those dollars intensifies.
Bishop said her organization is applying for more grants, including some she described as long shots.
“We’re having to, because if you apply for 10 things and you get one of them, then that’s one new source that will help right now.”
She urged donors to help fill in the gaps.
“It’s a really important time for donors, generous community members, to say, ‘I care about what happens locally,’” Bishop said.
Pencek, the domestic and sexual violence prevention nonprofit CEO, agreed.
“The more that people can contribute, the longer we get to withstand these blows,” she said.
But donations from everyday people are unlikely to supplement the million-dollar holes left behind without state and federal spending plans in place, especially if the stalemates protract.
“There’s no equal there,” Kunkel said.
Many government services will be OK, for now
Despite the shutdown, it remains business as usual at local post offices and the State College Regional Airport, whose federal employees are considered essential. The Centre Area Transportation Authority, which receives significant funding from the federal and state governments, said Monday it could continue normal operations for months.
The county will also provide regular services at least through the end of the year because of what Board of Commissioners Chairman Mark Higgins called “pessimistic” budgeting.
“Well, we’re already not being paid by the Commonwealth of Pennsylvania going on 90 or 91 days now,” Higgins said at a Tuesday board meeting. “I suppose, when it rains, it pours.”
Bishop praised the county government for its ability to continue dispersing funds amid the impasse at the state level.
“If that were not the case, I would be having a very different conversation with my board right now,” she said.
Municipalities are unlikely to feel the brunt of the federal shutdown for now, in large part because the funding they receive from the federal government is administered by the state.
“Even if there were a federal budget on time, the absence of the state budget will eventually impact those communities because they won’t be able to access their federal funds,” said David Sanko, the executive director of the Pennsylvania State Association of Township Supervisors.
Even if the federal shutdown outlasts the state budget impasse, Sanko noted, the governor can fill funding gaps on a temporary basis.
There isn’t much progress
There is a lot of finger-pointing in Washington, D.C., and Harrisburg over respective spending plans, but few permanent solutions.
U.S. Senate Democrats rejected a GOP proposal to fund the government Wednesday afternoon, demanding health insurance tax credits for poor Americans be preserved. Pennsylvania Sen. John Fetterman, who has lately taken to voting against his party’s position, was one of two Democrats to vote for the proposal. The White House, meanwhile, posted taxpayer-funded memes.
At home, Democratic Gov. Josh Shapiro challenged the Republican-controlled state senate to “show up for work,” while Republicans coalesced around a plan from Treasurer Stacy Garrity to deliver loans to counties.
