Minnesota Limbo: What the Government Shutdown Means to Nonprofits and Minnesotans

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In Minnesota, we may be watching the future. What’s happening there shows us that state legislatures and perhaps the federal Congress may be willing to shut down governmental operations and deprive citizens of essential services in the name of shrinking, cutting, and gutting government. It is almost a mark of pride for some ideologues: don’t compromise, and never countenance the notion that it is important to raise revenues rather than deprive people of programs.

Minnesota’s government shutdown is the equivalent of stalemate in chess. Or perhaps the better chess term might be zugswang – a position a chess player finds himself in where any move makes his position worse. But the shutdown has made state workers, nonprofits, and lower income Minnesotans powerless pawns.

Negotiations between Republican legislators and Democratic Governor Mark Dayton – after more than a week since the July 1 shutdown – have yielded no progress other than tepid commitments to continue meeting, though tensions are fraying and Dayton has charged that Republican negotiators are “distorting the truth.”

Facing a $5 billion deficit, Governor Dayton proposed a temporary income tax increase on residents earning more than $1 million a year and the addition of $1 per pack in cigarette taxes. Republicans have drawn a line against any and all taxes, defending rich people and tobacco with equal dedication. Fortunately for the legislators, they are the state’s protected class: they get paid during the shutdown – unlike state agency staff.

Facts don’t lie

But what gets lost in the budget negotiations and the ideological posturing between the two political parties is what happens to the communities – the people – when their government fails them?

So we decided to ask: What is the shutdown doing to nonprofits and the communities they serve? There’s no need to imagine hyperbolic doomsday scenarios to motivate citizens to say “enough” and legislators to take action. The facts are clear enough.

·      A mental health facility in Duluth staffed by the Community Partnership Network stopped operating, initially offering no information to people calling for assistance.

·      Deemed by the courts as one of the many non-essential services, the Senior Linkage Line offering help to seniors and their caregivers on topics such as in-home services, meals, transportation, and housing shut downin the Twin Cities area.

·      The Associated Press reports that, “Arc Minnesota, a St. Paul nonprofit that helps people with disabilities, has suspended 90 percent of a housing service since losing its state funding.” Arc Minnesota has helped 200 people who were homeless or formerly institutionalized find their own housing in the past 18 months.

·      There are 21,000 families with 37,000 kids in day care programs in Minnesota and 4,000 more on waiting lists. State subsidies pay approximately half the cost. The shutdown has caused many day care providers to cut back their hours or clients, though Governor Dayton has appealed to the courts to reclassify day care as an essential service.

·      Some domestic abuse shelters such as Anne Marie’s Alliance in St. Cloud have been able to survive the shutdown, so far, by drawing on reserves. But the Minnesota Coalition of Battered Women says that most domestic violence shelters are small and few have anything like the St. Cloud organization’s resources. According to the AP, “Shelters in Thief River Falls, Fergus Falls and Dakota County have closed because of the state shutdown.”

·     Trixie Ann Golberg, president of Life Track Resource, a nonprofit that provides services for immigrants, refugees, and people with disabilities, told National Public Radio, that the shutdown forced the organization to close its services for refugees and immigrantsand since July 1 has laid off one-third of its staff.”

In their own words

How are nonprofits dealing with the reality of the longest government shutdown in state history? We asked three nonprofit leaders who had powerful stories to tell:

Jane Samargia, executive director of HIRED , a four-decade old nonprofit providing a variety of employment services for unemployed and underemployed people in the Twin Cities area:

“In the short term nine of HIRED’s services sites have closed and 7 service sites are open. Seventy-nine of our staff have been furloughed. The majority of our staff is employment counselors who work directly with job seekers – dislocated workers, youth, low-income adults and parents with children who are on public assistance. Our staff members work one-to-one with each job seeker, so with many of our programs suspended, our clients aren’t getting the individualized support they need to find and keep employment . . . HIRED is also able to continue services that are funded through the Greater Twin Cities United Way, foundations, and some programs that are funded from the federal level without passing through the state of Minnesota. As a result we are currently able to provide comprehensive employment services to only half of the 7,000 people enrolled in our programs at the end of June. If the shutdown is prolonged past July 31 our large programs in Ramsey County will also close . . . Regarding a shutdown of several months, this agency has been in business for 43 years. We have planned a financial strategy to keep HIRED viable . . . ”

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Alan Arthur, president and chief executive officer of Aeon, which has developed more than 1,900 affordable apartments in the St. Paul/Minneapolis area since the late 1980s:

“Short-term, the direct impact of the Minnesota government shutdown on the over 3,300 residents who live in Aeon’s affordable apartment homes is, so far as we understand it, relatively modest. Many of our very low income residents (many formerly homeless ones) rely on certain services – food, rent support, mental health assistance – that we understand so far to be protected ‘essential services’. For Aeon – the organization – the impact is also relatively modest in the short-term: a) an affordable housing project at the end of its renovation period may not be able to be officially “closed-out” until the state starts up again, which means some of the fees due to us may be delayed; fortunately, we already have our certificate of occupancy and folks are able to move in; and b) more seriously, the finance closing on another housing project will likely be delayed if state employees can’t complete contracts paperwork. If the delay is short, there will be modest negative impact, though . . . If the shut-down continues for weeks or months and the Aeon project that is scheduled to close on permanent financing doesn’t actually close, there will be significant holding costs that begin to accrue to the organization.”

Angie Miller, executive director of Community Action Duluth, a community action agency established in 1999 as the successor to Duluth’s original anti-poverty agency:

“We have two employees (both single parents) who are employment mentors with Bridge to Employment. This program assists Native Americans and African Americans on TANF (called MN Family Investment Program here) to find employment. This program is funded by federal TANF Consolidated funds that come to the state and then to our county. We were advised by the county to cease operations on July 1 . . . We are in the Republican and Governor's budget for the MN Community Action Grant to start on July 1. Our share (based on the number of people in poverty in Duluth) is $130,000. This money provides our core operating funding and pays most of the rent, utilities, office manager salary, my salary (executive director), bookkeeper salary, office cleaning and expenses like that. We of course budgeted this money to start this month and we do not have other funds to pay most of these expenses. So – we only paid half the rent. I am not getting paid this month. We are using other funds for two months for the office manager because she runs our summer tax prep program, and we are using proceeds from a fundraising dinner in June to pay for the bookkeeper. We have a line of credit that can be used in August. After that we are out of options. Our other programs however have funding to keep operating from non-state sources . . . (M)ost Community Action Agencies across the state have virtually shut down . . . Basic sliding fee childcare is eliminated during the shutdown . . . We were supposed [to have] crews of Youth Employment Service workers through the City of Duluth. That program is pretty much shut down due to no state funding.”

What do these stories of nonprofits caught in the budget shutdown tell us?

Ultimately, this is a debate over the proper role of government. It isn’t a matter of this budget line item or that budget line item – a tobacco tax or a rich person’s tax surcharge. The real question concerns what people think governments – state and federal – should provide as services and resources and how it should be resourced.

The process of governing is breaking down. The legislative process is one of posturing, avoidance, and passing the buck. Rather than fixing problems, legislatures are prone to one-time fixes or decisions that push the impact of their unwillingness to solve problems into the future. When President Obama decries Congress’s “kicking the can down the road,” he is describing what has now become standard operating procedure.

Nonprofits cannot sit on the sidelines or narrowly focus on fighting for specific line items here or there. The issues are now too big to be disaggregated into situation-specific lobbying. The nonprofit sector has to begin convening, thinking, and addressing a different vision of government that addresses revenues as well as spending.

  • ftjjr

    Wow, the extremes that reporters will go through to try to make some sort of political point. Heck, I could up with dozens of stories like this, but the rhetoric in this story is shameful. Wouldn’t it be more productive to report on the political issues related to the shutdown?

  • scc

    Wow — no question what political position this reporter takes, eh? “deprive citizens of essential services”; “gutting government”; “raise revenues” (you mean “taxes”?); “powerless pawns”; “when their government fails them” — This should not be called reporting at all… the kindest thing I can say about it is that it’s an editorial in disguise.

  • Tom

    To the two “wow” comments above, these examples are frankly tame. What those who advocate for small government and even lower taxes for the most fortunate in our society are real cuts to the health and well being of those who are less fortunate. Like the barons of the past hiding behind the fences of private estates, understanding the real impact on real people is discomforting. Sorry, but that’s reality. Real people will suffer greatly if the IR plans to gut government become a reality.