June 1, 2010

Maryland nonprofits worry about budget cuts next year

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By Erich Wagner
Erich@MarylandReporter.com

With one month left until a new budget year begins, nonprofit organizations in the state are already worried about potential cuts to programs in the following year’s spending for fiscal 2012.

At the Maryland Association of Nonprofit Organizations legislative wrapup last week, advocates bemoaned the possibility of programs they hold dear being on the chopping block during next year’s legislative session, and strategies to try and protect them going forward.

Neil Bergsman, director of the Maryland Budget and Tax Policy Institute, said with federal stimulus funds scheduled to lapse and increases in mandated spending in the forms of Medicaid, retirement and debt service, Maryland will likely still need to reduce spending next year.

“There’s more pressure on [nonprofit-supported] stuff in the budget,” Bergsman said. “If the state is going to finance the next budget without any budget cuts, we’d need 15 percent annual growth. But the current estimated growth is at 4.3 percent.”

Bergsman said the state will look at under-performing programs, but that most of government “waste” has already been trimmed.

“We should be looking at the performance of programs and cutting from the lowest performing and less important programs,” he said. “But there’s not a lot of that left anymore.”

Bergsman said he doesn’t think the state will be able to balance its budget, “without damaging” at least some programs nonprofits consider important.

Advocates for Children and Youth’s Executive Director Matthew Joseph suggested that fellow advocates begin making contacts within state agencies now to stay informed about the looming budget cuts, and to try and lobby for the most important programs.

“See what kind of instructions [agencies] are being asked to cut,” Joseph said. “You have to decide what things absolutely must be protected from cuts, and mobilize now.”

Leaders of state nonprofits all seemed to agree that at least some measures should be taken next year to increase revenues to minimize the necessary reduction in state expenditures. They tossed around tax hikes the organization supported this year. They favor raising the alcohol tax, reinstating the millionaire’s tax surcharge that ends in December, and enacting combined reporting, a business tax method currently being studied by a commission on business tax reform.

“Next year is an opportunity year,” said Henry Bogdan, public policy director of the Maryland Association of Nonprofit Organizations. “It’s a chance to do things that can’t necessarily get done in an election year.”