State Budget Battles Force Cuts and Closures at Service Providers

Thousands of homeless shelters, food pantries, senior centers, and other social-service charities are feeling the pinch from budget gridlock in several state capitals, The Wall Street Journal reports on its Real Time Economics blog.

Connecticut, Pennsylvania, and Rhode Island have yet to adopt budgets for fiscal year 2010 as legislators wrangle with declining revenue and other economic pressures, cutting off payments to nonprofit groups with which the state has contracts to provide services. California, New York, and Colorado have enacted spending plans that significantly reduce funds for nonprofit groups.

Providers warn that cuts and delayed payments now will create greater future costs in the criminal-justice and health-care systems. The nonprofit coalition Independent Sector is petitioning the federal government for funds from the Troubled Assets Relief Program, or TARP.

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