The large cuts to social service and education budgets that Gov. Tom Corbett included in his budget proposal could ultimately hurt the local economy, concluded a group of service providers this week after analyzing the numbers.
Not only will those cuts hurt recipients of social service benefits and students, they will force many service providers to cut employees, straining the social safety net even further.
“Organizations will have to eliminate jobs in order to survive,” said Jeff Wilush, president and CEO of Horizon House Inc., a mental health services company that serves residents in Philadelphia and the surrounding counties. “Individuals now employed will lose their jobs and be forced to return for the services they now provide.”
According to Wilush, Horizon House relies on employees to maintain its level of service, with about 75 percent of the organization’s budget going to pay its employees. When state funding falls, the first and often only place service providers have to cut back is by slashing employees.
Wilush was one of about 60 people who met Thursday with Mayor Michael Nutter and other city officials at a special PhillyStat meeting to discuss the impact of Corbett’s budget.
Under Corbett’s proposal, state spending on many social service programs has been slashed 20 percent. In addition, funding for the state’s 14 universities was cut 20 percent. The three state-related schools: Temple, Penn State and the University of Pittsburgh would see their funding cut 30 percent.
It is too early to determine exactly what the impact of the cuts will be.
In the social services area, Corbett combined six previously separate budget line items and lumped together their total funding under one heading. But, the state has not yet revealed how it will allocate those funds.
That leaves city officials and service providers guessing. But, everyone is tightening their belts.
“The staggering level of proposed cuts would literally shred to pieces the social safety net,” Nutter said.
Wilush anticipated that the eventually Corbett’s cuts would actually cost the state, counties and municipalities more money because by failing to provide services up front they would force people onto the streets and perhaps to crime leading to an increase in spending for corrections.
“The short-term gain of these cuts can only lead to higher long-term costs,” Wilush said.
It was the second year in a row that Corbett proposed substantial cuts to higher education funding. Last year he initially suggested cutting funding to state-related schools by 50 percent.
In Temple’s case, that was finally reduced to about 19 percent.
“Temple has responded by cutting millions from its operating budget, streamlining processes, eliminating redundancies and reducing administrative staff,” University president Ann Weaver Hart, who did not attend the meeting, said in a statement. “We have become leaner and more focused on a quality education.”
Over the last three years the school has trimmed $76 million from its budget. It would be impossible to maintain programs with further cuts, she said.
“The governor’s plan, however, is not one that can be met by cutting costs,” said Hart. “If approved by the General Assembly, this reduction in support will be felt by every student, parent and employee.”
The cuts come as Nutter is preparing the city’s budget, which will be unveiled on March 9.
Asked by reporters if the cuts — which total about $40 million for the city — would spur a property tax increase, Nutter said it was too soon to tell.
“Your question is tremendously premature, and we’ve had no discussion about that,” said the mayor. “We do not know at this point how, as a city, we would try to deal with the magnitude of these cuts.”
The city has raised real estate taxes the last two years as it battled its own budget woes.