Fiscal cliff puts Franklin County services at risk
If Congress does not come to a compromise on the so-called “fiscal cliff” — a combination of tax increases and spending cuts scheduled to simultaneously kick in at the turn of the year — Franklin County residents will feel its ripple effects, particularly in cuts made to health and human services organizations, local officials said.
Federally funded programs, including ones that support child care and provide food to the needy, will likely see between an 8 and 9 percent reduction. Medical centers will feel the effect of Medicare cuts in a number of ways.
And all of this will occur at a time when individual taxes rise, which will increase financial strain among residents, according to local officials in health and human services.
Democrats and Republicans, led by President Barack Obama and Speaker of the House John Boehner respectively, have been trying for months to come to an agreement as Jan. 1 looms closer. Economists speculate that if no compromise is reached, it could push the nation into another recession.
Human services reduced
The nonprofit human services agency Community Action receives 61 percent of its income from the federal government.
“We are waiting for guidance. ... I think it’s incredibly important that (legislators) resolve this,” said Executive Director Clare Higgins.
The organization is expecting to see $1.3 million less than anticipated this year, which would force it to reduce staffing hours to its Head Start and WIC (Women, Infants, and Children) programs. The programs spread out across both Franklin and Hampshire counties.
Cuts made to Head Start, which helps low-income families gain access to services for young children, could mean that between 65 and 70 fewer children will be served, said Higgins.
And the same would happen with a cut to WIC, a program that helps feed pregnant women and mothers with children under 5 years old. Community Action would have to decide whether to serve fewer people or to build up its employees’ case loads.
For Franklin County Home Care Corp. — which provides food to elders at central locations and via delivery — the fiscal cliff may result in the organization serving 10,000 fewer meals.
That’s just one part of a series of $62,000 cuts Home Care is facing if no congressional compromise is reached, said Executive Director Roseann Martoccia.
Four grants, given to help local councils on aging, would be cut. And 12 caregiver families, who receive up to $500 to help an elderly family, would not get that aid this year, she said.
The cuts are “a major hit to elders and caregivers,” said Martoccia. “We are especially concerned about elders living on a fixed income who rely on other supports as well such as fuel assistance to meet the basic needs of fuel, food and medications.”
ServiceNet would see a small 2.5 percent cut to its shelter and housing services for homeless people in western Massachusetts, said President and CEO Susan Stubbs.
And other agencies may feel the effects, although not directly.
United Way of Franklin County Executive Director Linda Stacy said the organization doesn’t receive federal dollars, but that its partner agencies may very well experience cuts.
And Rebecca Bialecki, executive director of the North Quabbin Community Coalition, said that any cuts made on the federal level will eventually trickle down to impact local organizations’ budgets.
“The funds that come to our state are clearly affected by the federal fiscal cliff, as those are all dollars that have to be made up in other ways,” she said.
Effects on health care
Taxes for all Americans are scheduled to increase on Jan. 1, which means that people will have less money available to pay for their health needs, said Joel Feinman, president and associate medical director of Valley Medical Group.
“They might start (to) postpone preventive care visits or even acute care visits because of copays and deductibles for which they might not have enough cash,” he said.
In addition to receiving less business, health centers will also see budgets reduced, said Chuck Gijanto, president of Baystate Franklin Medical Center. The cuts are the result of an automatic 2 percent cut to Medicare, the federally funded program for the elderly.
BFMC will see a reduction of $500,000 for the next 10 years, said Gijanto. The hospital will have to continue to figure out ways to account for that shortfall, he said.
But Medicare problems could get even worse, according to health officials.
For years, they said, Congress has been tasked with reining in rising Medicare costs, but has delayed on making a decision.
It means that on Jan. 1 — at the same time that “fiscal cliff” spending cuts and tax increases kick in — there would be a 26.5 percent cut on the reimbursement rates that the federal government pays to physicians.
“If they actually did proceed with this cut … it would mean any physician taking Medicare patients would also be taking a very extreme payment reduction,” said Feinman. “It would make it almost impossible to provide care to Medicare members without losing a ton of money.”
The fiscal cliff discussions have distracted legislators from acting on this decision, said Feinman.
Gijanto believes that when Congress addresses the issue, the decision will simply be pushed off again — at the expense of hospitals across the county.
“The speculation is that they ... will kick it another six months down the road. But in order to do that they’ll have to pay for it,” he said. “The expectation is that it’s probably going to come out of hospitals.”
Other areas of impact
What impact, if any, the fiscal cliff would have on education remains unclear. State officials said they could make no projection at this time.
But Greenfield Community College President Robert Pura said that at least 475 students, but potentially hundreds more, benefit from a tax credit that allows them to deduct some education costs from their federal income taxes.
The credit is designed to help students who do not qualify for fully funded federal aid. If that tax credit is reduced, it may lead some of those students to sign up for fewer classes or decide not to enroll at all, he said.
“Any time there is increased financial stress on our students, it runs the risk of potentially impacting our enrollment,” said Pura.
The Franklin Regional Council of Governments may also see some of its services reduced. It is 69 percent funded by state and federal grants, all of which may face risk for some reduction, said Phoebe Walker, director of community services.
FRCOG is still waiting to learn specifics on funding cuts, she said.