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Nonprofits brace for aid cuts

The Baltimore Sun

Maryland nonprofits are warning that state budget cuts could force them to trim programs as funding is squeezed.

And the situation would be even more severe if the recently passed tax on computer services is rescinded or the slots initiative fails, the Maryland Association of Nonprofit Organizations said yesterday at its annual legislative preview in Annapolis.

Members of the trade group said nonprofits likely will feel some impact from an additional $240 million in state spending cuts expected as part of Gov. Martin O'Malley's budget proposal as the state struggles to bring a structural deficit under control.

"Where the cuts are going to come from is anybody's guess now," said Peter V. Berns, executive director of the group, which represents 1,700 nonprofit organizations in the state.

"The concern is it's extremely difficult to cut $240 million without doing extreme damage to community programs and services," he said.

Berns said many of the state's nonprofits count on government funding for as much as 90 percent of their budgets, and relatively small percentages of funding from private donations.

Many serving the elderly, homeless or developmentally disabled have lengthy waiting lists, he said.

"When they're facing losses in government funding, there's no easy way ... to make up lost revenue," Berns said.

The ARC of Baltimore, for instance, relies heavily on state funding to offer residential living programs and job training and placement services for people with developmental disabilities, getting about $30 million of its $40 million budget from the state, said Stephen H. Morgan, executive director of The ARC.

"There's a growing backlog of people who need these services," Morgan said.

Additional sources of revenue or additional cuts would be needed if a Republican-led effort to repeal the new sales tax on computer services succeeds, or if a voter referendum to allow slot machine gambling at five locations fails, said Neil L. Bergsman, director of the Maryland Budget & Tax Policy Institute, a project of Maryland nonprofits.

The computer services sales tax will bring the state an estimated $200 million in revenue, while the slots initiative is expected to bring in $660 million. State lawmakers approved the tax and slots packages during a special legislative session this fall.

"There are risks in the budget this year," Bergsman said. "The special [legislative] session did not fix everything and resolve everything,."

The association has no official position on the slots referendum.

Representatives of several nonprofit groups at yesterday's event said they're straining to handle overwhelming demand for their services.

The fast growth of the over-age-85 population has put pressure on services for the elderly, especially a Department of Aging program aimed at keeping senior citizens in their homes rather than costly nursing homes, said Kim Burton, director of Older Adult Programs for the Mental Health Association of Maryland and co-chair of the Maryland Senior Citizens Advocacy Network.

"Demand is going up and funding is going down," leaving 10,000 seniors on waiting lists, she said.

Dennis Cherot, president of Baltimore-based Total Health Care, a treatment center for uninsured patients, said the program depends upon federal and state funding under Medicaid. He said the program has already felt a pinch from state changes in patient eligibility guidelines.

"That can make it more difficult for clients to be eligible," Cherot said. "When there's a tight budget, we're always concerned. We're concerned about where the cuts will take place."

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