State Sen. Cathy Osten, D-Sprague, listens to debate during the 2023 legislative session. Yehyun Kim / CT Mirror

While Connecticut’s entire social safety net is in financial crisis, state officials have focused new funding where labor unrest has been highest: at group homes serving clients with developmental disabilities.

But the nonprofit agencies that deliver the bulk of state-sponsored social programs also serve abused children, patients suffering from mental illness or addiction, inmates ready to re-enter society, the elderly and others.

And the leaders of the legislature’s budget panel announced this week they will launch an analysis this fall to study whether most services are shrinking — and how quickly —  even as programs for people with developmental disabilities expand. The goal is to develop data to support budget reforms to be proposed next February when the regular 2024 legislative session convenes.

Except for workers serving the developmental disability community, many nonprofit social workers “are still at minimum wage, because we have not provided the funding for them,” said Sen. Cathy Osten, D-Sprague.

Large nonprofit agencies, which operate many programs for a wide range of clientele — not just people with developmental disabilities — have a built-in problem likely to cause friction among staff, Osten said.

“One [social worker] will be getting a significant pay raise, and one will not,” she added.

That’s not good news for an industry that has long complained of low pay and high turnover rates, both driven by limited state funding.

Connecticut spends roughly $2.1 billion annually hiring nonprofits to deliver social services far more cheaply than state agencies can.

Between 2002 and 2018, funding barely grew at all, rising from $1.3 to $1.4 billion. And while state officials have taken steps since then to accelerate funding growth, the CT Community Nonprofit Alliance — which represents more than 300 agencies — estimated last spring the sector still was losing $480 million annually based on inflation over the prior 16 years.

Lawmakers and Lamont responded in June by bumping up annual funding by $103.3 million starting July 1.

But of those funds, $53.3 million went for all providers of human services — including agencies hired by the Department of Developmental Services — and another $50 million went only to nonprofits working for DDS.

That represents a 2.5% increase in the pool shared by everyone and a nearly 5% hike for DDS contractors.

The alliance estimates slightly more than three-quarters of the funds will go to agencies serving clients with developmental disabilities.

When the governor and legislature approved the extra funds, about 1,700 members of the state’s largest health care workers’ union, New England Health Care Employees Union, SEIU 1199NE, were in the midst of a three-week-long strike against six group home operators that work with DDS.

The union also had waged a two-month-long strike in late 2021 against a major nonprofit that operates 28 group home and day services programs for DDS spread across 17 communities in eastern and central Connecticut.

Two years ago, about 62% of a $100 million increase went to DDS contractors. Last fiscal year, funding grew by $74.7 million for that group and by about $14 million for the rest.

Rep. Toni E. Walker, D-New Haven, the other co-chairwoman of the Appropriations Committee, noted that DDS contractors handle the largest caseloads, adding this group badly needed the additional resources — and still remains under-funded.

The problem, she said, is that Connecticut has allowed compensation for the entire sector to lag for too long. And rather than taking a comprehensive approach while budgeting for social services, legislators are reacting to crises — such as worker strikes.

The alliance has said all types of nonprofit-staffed services have been shrinking since the outbreak of the coronavirus pandemic in 2020, during which many businesses took huge financial hits.

The nonprofit social services sector features many small community-based agencies, which makes gathering aggregate information a slow and cumbersome process.

Further complicating matters, nonprofits have had to contend with new spending controls and savings programs that legislators imposed on themselves in 2017 to whittle down state debt, which still exceeds $85 billion and is one of the highest per capita among all states.

Connecticut has amassed almost $11 billion in budget surpluses since 2017. It holds $3.3 billion in its rainy day fund — the maximum allowed by law — and has used the rest to pay down pension debt.

But Walker said she fears that by focusing the new funding heavily in one area, the state may have forced nonprofits delivering other services to cut programs more severely than many realize.

“We tend to create lines for direct services to people in the state,” she said.

Barry Simon, president and CEO of the one of the largest nonprofit social service agencies in the state, agreed.

Simon, who runs the Hartford-based Oak Hill — which serves people with developmental disabilities and many other clientele — said Connecticut often has addressed funding for portions of the safety net in a haphazard way. For many years in the past decade, he added, programs serving patients dealing with mental illness or addiction received the bulk of new funding.

Rob Baril, president of SEIU 1199NE, also agreed that a comprehensive approach toward addressing safety net funding is overdue.

The union represents caregivers across a wide range of programs, not just those who serve clients with developmental disabilities. And Baril said wages for all groups still are too low, leaving workers living paycheck to paycheck.

He noted that even the workers involved in this year’s group home strike earn $18.50 per hour — or nearly $38,500 per year based on a 40-hour work week. Those at minimum wage are earning $31,200.

And a disproportionate number of these social workers are Black or Hispanic, Baril said. 

According to the United Way of Connecticut’s ALICE methodology — an acronym for Asset Limited, Income Constrained, Employed households — the basic “survival” budget for a family of four here exceeds $90,000 per year.

“We have not as a state made a commitment to frankly narrowing the gap between the two Connecticuts,” Baril said, adding that years of stagnant state funding have pushed the safety net “to the brink of disaster.”

Keith has spent most of his 31 years as a reporter specializing in state government finances, analyzing such topics as income tax equity, waste in government and the complex funding systems behind Connecticut’s transportation and social services networks. He has been the state finances reporter at CT Mirror since it launched in 2010. Prior to joining CT Mirror Keith was State Capitol bureau chief for The Journal Inquirer of Manchester, a reporter for the Day of New London, and a former contributing writer to The New York Times. Keith is a graduate of and a former journalism instructor at the University of Connecticut.