Now turning to another budget issue, there is an ongoing push to secure a raise for New Yorkers working at non-profits who've been contracted by the state to provide a range of services, including support for child care centers, mental health programs, domestic violence shelters and more.

This year, workers are asking for an increased cost of living adjustment in the state budget.

To unpack it all, we spoke with Michelle Jackson, executive director for the Human Services Council.

Well, welcome to the show, Michelle.

Thanks so much for having me.

So for starters, when we think about the nonprofit human services sector in New York, what type of work is the state government farming out to your members?

That's a great question.

Human services are really embedded in every community.

Rural, suburban and metropolitan across New York.

And the human services sector provides a real broad range of services, everything from child care centers and afterschool programs, senior centers, home delivered meals, mental health services, domestic violence, those experiencing homelessness.

You know, it's a real ride spectrum of services, including emergency services and even sports in the local gyms, community centers.

Those are usually all typically run by nonprofit human services organizations.

And the state of New York has really farmed out most of those human services on contract to nonprofit organizations.

And is that a recent phenomenon or has this dynamic always existed?

So it's certainly not recent.

It's, you know, for the last 20, 30, even 40 years, nonprofits have really been contracted with government and I would say, at least in the last 20 years, it's almost exclusively.

Certainly, the state does retain and other counties retain some contracts themselves to provide those services.

But, you know, at least for the last 20 years, it's been, you know, the majority of those contracts go out to nonprofit human services organizations.

So, governor hopefuls, budget proposal includes funding for a 1.5% cost of living increase to workers at nonprofits in the human services sector, which comes on the heels of a 4% increase last year and about a five and a half percent bump the year before that.

So is it common for the sector to see regular cost of living raises?

Unfortunately, no.

In 2008, there was a statute that was passed in the state of New York to provide a mandatory cola each year to human service organizations or who contract with the state.

Based on the CPI, the consumer price Index.

But since that statute wasn't enacted, it was actually taken out of the budget every year.

So Governor Hochul is the first governor since that statute passed to pass a full COLA for the human services sector and of course, with the help of the legislature.

Unfortunately, what that means, though, is that nonprofit human services workers went 15 upwards of 15 years without a real increase on their state contracts.

So while these increases that have happened the last two years and we're hoping to see this year are great, they only chip away at what the wages really should be in the human services sector.

And to be clear, then the nonprofit providers might love to provide higher wages or these cost of living increases for the years when nothing is made available.

But it's the state resources that really determine what they're capable of doing.

That's exactly right.

A lot of these contracts last 7 to 10 years and without any kind of COLA, it's up to nonprofits to really fundraise, to fill the gaps.

And and understandably, those are very limited resources in philanthropy and with private donors and a lot of need at those nonprofits.

So they try to keep wages up.

But that has created a real growing gap, resulting in nonprofit human services workers being the second lowest paid industry behind restaurant workers in New York.

And unfortunately, that means a lot of workers have left the sector.

And while nonprofit boards and executives are doing their best to bridge the gap and pay them equitable wages, we really need equitable wages coming from government contracts.

Well, yeah.

Can you elaborate a little bit on what has been the impact of stagnant wages on the human services sector?

Has it impacted, for example, what services are actually out there?

So I think first it's resulted in really high turnover and the inability to hire and retain qualified employees.

And these jobs really run the gamut.

You need master's, you know, you need people with a master's degree to be social workers and program managers.

You also need janitorial services and kitchen workers, people who do home delivered meals, lifeguards and summer youth camp, you know, workers.

It really runs the gamut.

And in all of those different wage categories, we see human services workers falling behind what their salaries would be in government or in the private sector.

They're make about 30% less than they would if they worked a government job.

And that means it's really hard to hire people.

And if you do hire them, they move on quickly.

And this workforce is predominantly women and people of color.

So the kind of lack of community jobs in this area really has an impact.

And it impacts first, when you have open jobs, it means the people who are working there work harder and get burnt out.

And then also you have open positions or people moving on quickly, which does impact quality of services.

So nonprofits are doing the best they can to make sure everyone gets services.

But we would be lying if we said it didn't impact the quality of services, right?

If you have a case worker who keeps switching out every six months, you feel that as a program participant and it means higher case loads for the people who do work there.

So the governor's budget includes, I believe, a 1.5% bump for the workforce.

What sort of wage increase should be in the final budget this spring?

So we're looking for a 3.2% COLA because that's what the consumer Price Index would be this year.

And so that's if you're following the statute, what it would be.

So we appreciate that the governor has made investments in the last two years.

The legislature really came through last year to make sure that the COLA was at 4%, which by the way, was also not the full rate of inflation, but certainly welcome.

And this year we're working with the you know, we'll be up in Albany.

We have a big Albany lobby day where we have 200 people from across the state coming to really rally to ensure we get that 3.2% COLA in the budget along with making sure that the goal actually goes out to all workers and human services.

So we're looking at some statutory changes.

And the next step, we're looking at a wage board to really lift up the COLA is so important, but we have to get real equitable wages across the sector.

So we're looking at what happens past the COLA and how much would the governors propose raise cost to implement and what's the price tag of the increase that you would like to see?

A 3.2% COLA would be about 200 million and change.

And so 1.5% is a little less than half than that.

So about 90, 95 million.

So we're looking for the full 3.2% to be in the final budget.

And to be honest, you know, 200 million to the average New Yorkers average person sounds like a lot of money.

But in regards to this budget, it's a drop in the bucket.

And it also impacts upwards of 800,000 workers across the state, which I would say is a very good investment.

Yeah, And for context, as part of the revenue process, the state has basically found an additional $1.3 billion in the couch cushions that's going to be incorporated into this year's budget.

So do you envision that that money or just the state more broadly is in a position to foot the bill for this additional cost of living raise?

Yeah, absolutely.

I mean, I love these couch cushions with nowhere money.

And do you ever check them at your house?

Yeah, I know, exactly.

I'm not finding 1.3 billion, and I'm lucky if I find two quarters to rub together.

But we I mean, we definitely think that revenue projections demonstrate alone that this would be, you know, this is not something that will harm the budget.

And it will also have to say that even in a budget where we're trying to look at where we can save, we do real disservice to our communities and to our economy when we don't take the money that we do have and invest it in workers, in real community jobs who lift up the economy of New York.

So it's great that that money is found.

And that certainly means that this investment should be a much easier lift for the governor and legislature.

But regardless of the you're investing in real jobs, again, predominantly women and people of color is should be a priority in New York.

So another recurring problem for the human services sector is the timeliness of payments from the state.

Can you explain that persistent problem?

So again, since nonprofits contract with the state to provide services, they really can't get paid on those contracts until they're registered.

And that means that if the contracts are not registered by the start date, nonprofits really have an impossible choice to make.

You know, if you think if you're a construction, you're building a building for the state of New York, you can wait until the ink is dry on the contract before building the building because you don't have to start.

But if you run a homeless shelter that already contracts with the state of New York, for example, you can't close that service and wait for that contract to be registered for you to start getting paid.

So nonprofits are really stuck in the cycle where they continue to provide services even without a registered contract while waiting on payment.

The state has in some ways made improvements and certainly over the last couple of years.

But the data shows that there's a significant delay in when contracts are registered.

And what that means is that nonprofits are not getting paid for months while they pay employees, while they pay vendors, and really are loaning the state money to provide those services.

Well, unfortunately, we're going to have to leave it there.

We've been speaking with Michelle Jackson, Executive Director of the Human Services Council.

Thanks so much for making the time, Michelle.

Thanks so much for having me.