By Steven Saint

Catholic charities weather states' budget crises

Contributions come through as agencies receive less money for much needed services

It's about a 20-minute walk from the Salvation Army homeless shelter on the outskirts of downtown Colorado Springs, Colo., to the Marian House Soup Kitchen.

The homeless health clinic is another 30 minutes across town in a different direction, if you can walk briskly on a summer day with 90-degree heat.

Catholic Charities of Colorado Springs used to run a shuttle bus to the farflung social services agencies, but no more. Money is tight and the numbers at the soup kitchen have risen some 50 percent since summer hit.

The details may differ, but the story is the same everywhere: Catholic service agencies are receiving less money while those in need continue to increase.

State of the states

As the fiscal year begins for many state governments, the new picture of budget cuts to social services is becoming clear. Twenty-nine states (including the District of Columbia) face budget shortfalls totaling approximately $48 billion.

While legislators and governors scout for new revenues to buoy state coffers, they're also slashing spending -- all too often cutting programs that help those most in need.

"It's pretty grim," Candy Hill, senior vice president for social policy at Catholic Charities USA, told Our Sunday Visitor. "Government cannot abdicate its responsibility and just shift the burden to faith-based organizations. We're beginning to hit the wall."

Like many American households, state governments are seeing revenues decline and expenses increase. Generally speaking, states get about 40 percent of their money from personal income tax and another third from sales tax. Corporate taxes average 8 percent.

So, when personal income decreases, so do tax revenues. Sales tax dips subsequently when people with less disposable income buy less furniture, appliances and construction materials.

On the spending side of the equation, states are facing higher energy prices, increases in health care costs and greater expense in repairing and maintaining infrastructure, such as roads and sewer systems.

Medical bills for low-income people have averaged 11 percent growth a year for the past 25 years, according to the National Governor's Association. States are straining to find enough funds for Medicaid programs.

A budget shortfall means the state plans to spend more than it will likely take in. Legislators and governors juggle finding new revenues with cutting costs. Most states have savings accounts -- called reserves -- and these are sometimes tapped to make ends meet.

Illinois grappled more than a month with a budget that contains a $2 billion shortfall. Gov. Rod Blagojevich urged the state Legislature to approve new funding sources, including an expansion of casino gambling. When lawmakers refused, Blagojevich started cutting programs with line-item vetoes.

The big losers will be social services programs for children, seniors and drug addicts. For example, $45 million worth of services to foster children were eliminated with the sweep of the governor's pen.

"Generally speaking, Catholic Charities gets 65 percent of its funds from government, including the states," Hill said. "The people we serve will be hurt the most."

Trickle-down trouble

Even though Catholic Charities offices are private, faith-based operations, many programs are funded through contracts with the state. As a result of budget cuts in Illinois, for instance, Catholic Charities operations around the state are adjusting their own budgets as they struggle to serve people in need.

Catholic Charities in the Chicago archdiocese will be making more than $7 million in cuts. Day-care programs for seniors are threatened at three sites. Joliet has already laid off staff. Peoria will just have to pile more foster-care cases on the desks of three social workers.

In Maine, where the statewide office of Catholic Charities relies on the state for 80 percent of its funding, budget cuts have triggered a reorganization of the operation. By eliminating jobs, the agency was able to weather a $1 million reduction last year.

Now mental health services to the homeless and needy, including halfway-house rehabilitation programs, are hanging in the balance.

"If the state doesn't manage to turn things around soon, we may have to close programs," says Terri Gamache of Catholic Charities Maine.

Catholic hospitals are also feeling the pinch. For example, nine out of 13 Catholic hospitals in New Jersey are operating in what Father Joseph Kukura, president of Catholic HealthCare Partnership of New Jersey, has called a "strained financial situation," blamed on $111 million in cuts to care for the state's indigent population.

To address a $15 billion shortfall in California, Gov. Arnold Schwarzenegger is proposing a billion dollars' worth of cuts to Medi-Cal, the state's Medicaid program. Florida is reducing payments to nursing homes.

"More than half the states are in dire straits," said Michael Rodgers of the Catholic Health Association. "People are losing their jobs, losing their health benefits and, as a result, we're seeing more people going to emergency rooms for basic health care services."

And while social service agencies have been bracing for funding cuts over the past eight years, the worst may be yet to come. The National Governor's Association characterizes the 2009 budget cycle as "more troublesome than fiscal 2008."

Light in the tunnel

Catholic social teaching focuses on the common good with a preferential option for the poor. That means Catholic leaders in the social service arena are pressing government officials to balance their budgets with the poor in mind.

"We feel strongly that government has an important role in promoting the common good," said Hill of Catholic Charities USA. "Unfortunately, nothing major will be addressed until elections are over."

Rodgers is urging lawmakers to resist pressures to cut Medicaid spending. One recent victory was a congressional moratorium on Medicaid cuts proposed by the Bush administration. The moratorium will allow the next president to review some $12 billion in cutbacks.

"Appealing to the states was very successful," he said. "The moratorium had huge support in the House of Representatives."

At the end of the day, the last line of defense is Catholics who will work longer hours at social service agencies, volunteer more time and even give more from their own stressed budgets.

Catholic Charities Maine reports that even though their private donor base is small, contributions have been slightly higher than in the past. The agency was able to serve 6,000 more people in the last year despite $1 million less in the budget.

In Colorado Springs, Catholic Charities recently built a $4 million soup kitchen to replace a dilapidated structure used for more than 20 years -- they just don't have a shuttle bus to take homeless people there.

"If not for the generosity of our donors, we could not serve all the people's needs, Hill said. "We're just not going to turn people away."

Steven Saint writes from Colorado.