New York stalls on funds for charities
Lawmakers say state’s excuse is “poor,” urge governor to help
Charities serving New York’s most vulnerable are facing financial ruin as influential state lawmakers charge that the administration of Gov. Andrew M. Cuomo has been offering a “poor ” and disproven excuse for not stepping in to help.
In September, lawmakers pressed Cuomo to use a portion of billions in federal relief to pay for the charities’ services.
But a state Division of Budget spokesman, Freeman Klopott, responded that the federal funds could “only be used for narrowly defined COVID - related costs,” seeming to stake out a position that the Cuomo administration could not legally spend the funds to help charities.
State lawmakers now point to research conducted by the National Conference of State Legislatures that shows a diverse array of states — not including New York — have for months been giving tens of millions of dollars in COVID -19 relief funds to nonprofits, apparently without concern that the spending is improper.
Asked about the spending by other states, Klopott on Wednesday disputed ever saying federal funds could not be given to charities, and he argued that those words were being put in the Cuomo administration’s mouth.
Klopott said that the federal funds are allowed to go to charities, noting that the administration had granted $35 million through Cuomo’s Nourish New York program to food banks and emergency food providers.
“We have approximately $7 billion in eligible expenses for the $5.1 billion in funds received from the CARES Act and we’re spending the funds to keep New Yorkers safe and healthy,” Klopott said. “The state budget currently has a $14.9 billion imbalance, meaning every dollar spent additionally from the CARES Act funding will require spending reductions elsewhere, and the state funds schools, hospitals and services for the most vulnerable.”
The federal CARES Act, passed in late March, included $150 billion in funds for state governments to respond to the COVID -19 pandemic crisis. Through June 30, New York had spent $2.1 billion of the $5.1 billion of the Coronavirus Relief Fund money it had received, according to a report from the U.S. Treasury, leaving about $3 billion remaining at that time.
New York must spend the full $5.1 billion by Dec. 30 or the remainder will go back to the federal government.
In September, more than 100 state lawmakers — many Democrats, but also some Republicans — signed a letter calling for the Cuomo administration to give a portion of the billions in unspent federal funds to nonprofit organizations aiding the most vulnerable members of society. Many charities’ finances have been badly damaged by significant cuts in state funding this year, which were spurred by New York’s enormous budget deficit.
Nonprofit organizations that are contracted by the state to provide health care, afterschool programming, senior services, housing, food delivery, food pantries and services for people with disabilities “are being forced to cut vital programs, lay off staff and close their doors,” the lawmakers wrote in September. “In many cases, the funding being withheld is for contracted services that have already been provided.”
These nonprofits employ and serve large numbers of New Yorkers from communities of color, the lawmakers wrote, communities already disproportionately affected by the pandemic.
In a new statement this month, the chairs of various state Assembly and Senate committees cited the Cuomo administration’s “poor excuse” for not giving the funds to charities. The statement was issued by assemblymembers Andrew Hevesi, Donna Lupardo, Richard Gottfried, Ellen Jaffee, Harry Bronson and Linda Rosenthal, and sens. Gustavo Rivera and Roxanne Persaud.
“Simply put, other states have already done exactly what we have been asking Gov. Cuomo to do in New York,” the lawmakers stated. “Gov. Cuomo can no longer say that he isn’t allowed to spend this money to help our nonprofits because of some nonexistent federal regulation. Other states have done it. New York state must do it now.”
According to the U.S. Treasury Department’s website, states must use the federal funds for expenses incurred due to COVID -19 between March 1 and Dec. 30.
Congress is close to reaching a deal on a new $900 million stimulus package. But it would leave out a major priority of congressional Democrats, including Senate Minority Leader Charles E. Schumer: providing relief to state and local governments that have been crippled by revenue shortfalls caused by the COVID -19 pandemic.
For social services nonprofits that have relied on contracts with the state government to fund their operations, getting a portion of the federal funds would become even more pressing.