Nursing homes, nonprofits come up short
By:Keith M. Phaneuf, Journal Inquirer
02/07/2007
HARTFORD - Just two years after averting a major nursing home strike, Gov. M. Jodi Rell is asking the state's homes to go without a funding increase next fiscal year.
Rell's budget plan for the 2007-09 biennium creates a pool to bolster wages for the lowest-paid nonprofit social service workers and launches the governor's health insurance expansion initiative.
It also continues efforts to end federal oversight of the Department of Children and Families and to reduce a controversial waiting list for residential placements for the mentally retarded.
The state's nearly 160 nursing homes represent one of state government's single-largest expenses, and will receive more than $1 billion out of this fiscal year's $16.07 billion budget.
Granting the homes an average rate increase of 1 percent would have cost more than $12.3 million.
And with projected costs of maintaining services throughout the budget up $807 million and current tax revenues growing just $315 million, Rell wrote in her budget message she couldn't launch new initiatives in education and health care without making hard choices.
"This presents a difficult backdrop in which to propose visionary reforms," the governor wrote.
The nursing homes have fared better under Rell than they did under her predecessor, former Gov. John G. Rowland.
Still, close to 20 Connecticut nursing homes have declared bankruptcy or been placed under state oversight since 2003 as state and federal funding failed to keep pace with the rising costs of patient care.
New England Health Care Employees Union District 1199 threatened to lead workers at 34 Connecticut homes on strike in March 2005, demanding 5 percent annual raises for four years to correct what leaders called longstanding wage inequities.
The union ultimately settled for raises closer to 4 percent at most homes.
Rell averted that strike threat by securing passage of the 4 percent increase, though industry leaders warned they would be hard pressed to meet wage demands if future state budgets returned to flat funding or minimal increases.
The governor's new budget does include $12 million over the biennium to continue "fair rent" funding for nursing homes, but this has nothing to do with operating expenses.
This program allows nursing homes to qualify for some state reimbursement if they make certain capital improvements.
To provide new alternatives to nursing homes, Rell's budget does include $9.5 million in new funds over the biennium to move up to 500 people into a community-care setting over the next five years, as well as $8.4 million to move mentally ill people out of nursing homes and into community-based programs.
Nursing homes are not the only segment of the state's human services budget that have long complained about under-funding.
State government will spend close to $1.5 billion this year hiring nonprofit social service agencies to care for the retarded and mentally ill, counsel abused children, run drug addiction recovery programs, and offer job training.
Representatives from both of the state's major nonprofit associations asked in November for a 7 percent funding hike in 2007-08 and 5 percent in 2008-09 - increases of more than $150 million over two fiscal years.
Like the nursing homes, the nonprofits received their largest funding hike in more than a decade in 2005, when they got a 4 percent hike. That was followed by a 1.5 percent increase in 2006-07.
But that still wasn't enough to prevent the growth of a major gap between what private social service workers earn and what comparable state employees make. Nonprofit social service workers earn about half of what their state counterparts do.
Rell's new spending plan falls far short of the nonprofits' request, offering $32 million in total over the biennium for new "low wage" pools.
Those funds would be used to help the lowest-paid nonprofit workers achieve a salary equal to the median level earned by other nonprofits, but not what state employees earn.