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Housing programs will be heavily impacted.
By Jared McKiernan
While much of sequestration’s impact has yet to penetrate The Salvation Army, substantial declines in funding are looming.
The automatic federal budget cuts to foreign and domestic spending—that went into effect March 1—are projected to total $1.2 trillion. When Congress failed to reach a deal that would revise the budget prior to the New Year’s Day deadline, they extended the deadline to March 1, which also came and went. The cuts could impact the nonprofit sector indefinitely, depending on future Congressional action.
Until then, nonprofits like The Salvation Army are left scrambling to reallocate funds and seek new avenues of private support to compensate for the dropoff as seamlessly as possible. Each program in the Western Territory is funded uniquely, those with heaviest dependence on federal funding experiencing the sharpest cuts.
“I know Congress has to cut the budget,” said Major Sherry McWhorter, Southern California divisional social services secretary. “I just wish they wouldn’t do it on the backs of the poor.”
Despite a “slight uptick” in private support in the last year, McWhorter anticipates it will be offset by an increase in demand for services in the next year. The entire nonprofit sector saw dramatically increased demands for services at a rate of more than 70 percent each of the last four years, according to the National Council of Nonprofits.
The Western Territory’s social service department receives $47.8 million in federal funding and expects to see a $2.4 million drop-off overall as a result of the sequester. Housing, child care and substance abuse figure to be the most heavily impacted programs.
“We’re going to have to close beds; I don’t know at which facility,” McWhorter said. “We’re funded facility-by-facility. It might be one bed in one facility and 30 in another.”
Child care programs will either be fully funded or entirely unfunded, depending on whether the Army is issued a funding “slot,” according to McWhorter.
“There are a limited number of slots, so if we lose ours, there’s no way of getting it back,” McWhorter said.
Substance abuse programs not including Adult Rehabilitation Centers (ARC)––which generate the entirety of their funds without government assistance––expect to lose over $337,000.
Disaster relief is susceptible to narrowed funding, but since Federal Emergency Management Agency (FEMA) relief funds are not assessed in advance, there is no way to project the blow that victims of floods, fires and earthquakes could sustain. The territory will also lose support for its veteran aid programs, according to McWhorter.
Due to the staggered timeline of expiring federal contracts including pass-through dollars to states and municipalities, McWhorter said the sequester’s effects will gradually surface. Programs like Silvercrest, which provides independent living facilities for self-sufficient seniors, may particularly feel the sting of the cuts, granted its heavy reliance on federal contracts.
The U.S. Department of Housing and Urban Development (HUD) covers up to 75 percent of the operational costs for Silvercrest through its Section 8 Rental Assistance Program, according to Susan Lawrence, executive director of Silvercrest Management for the Western Territory. HUD has devised a plan to decrease its year-round support to an average of eight-and-a-half months of funding. The actual amount will vary depending on each contract’s expiration date, according to HUD Deputy Assistant Secretary Marie Head. All contracts will be funded through the end of the 2013 calendar year, but support for many contracts expiring beyond December is uncertain.
“The residents themselves won’t be at jeopardy,” Lawrence said. “As far as the cuts to the operational costs, we don’t know what those cuts are going to look like or what that’s going to mean.”
Despite warnings from HUD, Lawrence is optimistic that HUD will reallocate funds so Silvercrest management won’t have to internally.
“The last thing HUD wants to do is impact Section 8 contracts,” Lawrence said. “They know that could have dire effects on the affordable housing industry.”
