There are whispers in Hartford that legislation being prepared for next session would link funding for non-profits to general wage increases for state employees. But such a law would exploit unsuspecting taxpayers.
State Sen. Cathy Osten, who is co-chair of the powerful Appropriations Committee and a former union president, is seeking a new funding mechanism for non-profit organizations. Ostensibly, this initiative aims to secure consistent funding for nonprofits that provide essential services like addiction treatment, support for individuals with developmental disabilities, and community enrichment programs. But beneath this altruistic motive lurks the dark specter of union self-interest.
Under Osten’s plan, state funding for certain nonprofits would automatically increase whenever state unions negotiate pay increases for themselves. At first, this seems like a solid strategy for ensuring that that nonprofits get funded. Actually, it is a clever tactic to turn nonprofit workers into a sympathetic de facto lobbying group for Connecticut’s dominant special interest — the government unions — despite having no other relationship to them.
This alignment could incentivize nonprofits, which traditionally focus on service delivery, to shift towards advocacy for increased state spending —effectively lobbying for higher taxes and more government spending. What’s more, nonprofits would have a vested interest in supporting higher wages, regardless of the state’s fiscal condition or the actual needs of the programs they administer.
This situation resembles a kidnapper’s bargain, where a criminal holds a hostage to force concessions from their loved ones. Here, the essential services provided by non-profits are the captives, with funding tied to wage increases as the demand. Just as a ransom forces difficult choices, this proposal forces taxpayers to either accept increased government union pay or risk underfunding vital nonprofit services.
What’s more, this overhaul to the funding process would only exacerbate the leading problem with nonprofit funding: inflation. As the Connecticut Nonprofit Alliance itself has stated, the most recent state budget notably increased state funding for nonprofits, but “due to the high inflation of the last two years, community nonprofits remain 46% behind where they were in 2007.”
The proposal is also yet another initiative from legislative leadership that would undermine the fiscal guardrails that have brought a semblance of stability in state spending and at least checked the growth of taxpayer burdens in Connecticut. These are the same fiscal guardrails that have freed up hundreds of millions of dollars to be spent today, or even boldly returned to taxpayers, by paying down the state’s massive debt obligations.
If our state’s nonprofits need more funding, that’s an important discussion worth having. But tying nonprofit funding to state employee wage increases is the wrong way to produce that outcome. The proposed process would grant significant influence to unions and their new allies within nonprofits, enabling them to dictate terms and influence public policy to their benefit, rather than based on the needs of the communities they serve.
Funding for nonprofits should be based on their performance and the genuine needs of the populations they serve. A rigorous needs analysis and evaluation of each organization’s efficiency and effectiveness should be the cornerstone of any funding decision. Instead, Sen. Osten’s plan introduces an arbitrary mechanism that links funding to state employee wages, bypassing considerations of merit and efficiency.
In essence, the proposed process represents a potential betrayal of the taxpayers’ interests. By embedding a new funding mechanism that serves the interests of a particular group, rather than the public at large, this proposal risks undermining the very purpose of government funding for nonprofits —to support the most effective organizations that provide vital and necessary services.
Taxpayers deserve assurances that their money is being used efficiently and for the public good, not as a bargaining chip in a broader political gambit. Rather than incentivizing nonprofits to promote union lobbyists, we should adopt the free-market reforms that increase prosperity for the people who need it most and support the common sense fiscal policies that will keep our state’s balance sheet stable and strong.
Frank Ricci is a Labor Fellow at the Yankee Institute, past president of the New Haven local of the International Association of Fire Fighters union, and a retired battalion chief. Bryce Chinault is the director of external affairs at the Yankee Institute.
