Commentary: Nonprofits and deepening state fiscal crises

By Elizabeth McNichol, Center for Budget & Policy Priorities

Nonprofit organizations are on the front lines of the growing state fiscal crisis. Just as the economic downturn is increasing the need for health care, nutrition assistance, job training, and other services for vulnerable residents, declining revenues are putting state funding for nonprofits at risk.

More than 75 percent of the states faced or are facing budget shortfalls for the current fiscal year, which started July 1 in most states. Many states are already projecting deficits for next year. Judging from prior recessions and the rate at which revenue is now deteriorating, next year’s gaps are likely to be in the $100 billion range.

Sales tax receipts are falling because consumer spending has fallen.  Income tax revenues are falling because of declining hourly wages, rising unemployment, and shrinking capital gains. At the same time, the need for the assistance that states provide -- both directly and through nonprofits -- to families buffeted by the economic downturn is rising. Click here to read more.