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$15 minimum wage proposal may ‘destroy’ nonprofits serving disabled

03/17/2016 10:00 AM |

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One day before a rally last week in Hauppauge, Debbie Woodley, a senior direct support professional for East End Disability Associates’ creative arts program in Riverhead, took a client by the hand and slowly helped her trace out the wording on a sign: “Respect the needs of the developmentally disabled and the DSPs who care for them!!!”

Ms. Woodley became active in EEDA — a nonprofit that cares for the developmentally disabled — after her brother, Christopher, began receiving services at its day habilitation program. What began as a part-time job became a calling for Ms. Woodley; she’s worked at EEDA for the past decade.

Ms. Woodley, a Calverton resident who says she earns an hourly wage that’s less than the $15 minimum Gov. Andrew Cuomo has proposed, said that between them, she and her husband are able to make a living. But it’s not a comfortable life.

Kate Danega, another DSP with the creative arts program, agreed, saying their pay “really isn’t enough to make ends meet.”

But comfort isn’t what’s most important, Ms. Woodley said. Nor is money.

“I love what I do,” she said. “We’re the ones who are blessed … It is so beautiful to be around these guys. They teach us.”

Nonprofit groups from across New York State — including EEDA and Aid to the Developmentally Disabled, both in Riverhead — have been calling for a higher minimum wage for years.

So it might make sense that they’d support the governor’s recent call for an increase in the statewide minimum wage from $9.75 to $15 per hour.

But while these groups — which rely almost entirely on state funding to operate — support the proposed hike, they claim the governor hasn’t offered a funding increase to help them cover higher salaries for the employees who deal directly with their clients. The lack of added funding, they say, means that if higher wages go into effect, they won’t have enough money to make payroll.

The result would be either slashed services to the developmentally disabled or possibly even closing the nonprofits entirely.

“Unlike McDonald’s, we can’t raise the price of a Big Mac to make up the difference,” said Gus Lagoumis, EEDA’s director of program operations. “The people we support aren’t burgers — they need people. They need the staff that they need.”

On Friday, DSPs from EEDA and ADD, as well as some of the people they assist, joined their counterparts from other nonprofits for a rally at the state office building in Hauppauge. More than 1,000 people gathered there to urge the state to increase funding to help nonprofits match the wage hike, said Matthew Kuriloff, EEDA’s manager of development and public relations.

According to Mr. Kuriloff, most of EEDA’s budget is spent on payroll. About 95 percent of that money comes from the state in the form of Medicaid payments, he said; the remaining 5 percent is raised through New York State contracts and grants or private foundation grants and donations.

According to EEDA — where annual payroll costs amount to more than $1.2 million in Riverhead alone and include roughly 250 direct support professionals — a jump to $15 an hour, even phased in over five years, would leave them almost $1 million in the red.

According to tax documents that nonprofits are required to submit, EEDA ended 2014 with a surplus of $386,000 on a $12.4 million budget — a margin of 3.1 percent. The previous year, however, EEDA was nearly half a million dollars in the hole. In 2013, ADD operated with a margin $450,000, or 3.3 percent, on a budget of $13.6 million budget .

“We work on state contracts,” Mr. Kuriloff said. “We already operate on very narrow margins. Basically, the state determines what we can pay direct support professionals.”

Wages2Mr. Kuriloff supports of the minimum wage increase, saying it will allow DSPs to make a living without working one, two or sometimes three extra jobs to make ends meet. An entry-level DSP at EEDA now makes $11.89 per hour.

Assemblyman Fred Thiele (I-Sag Harbor) spoke with EEDA representatives two weeks ago and agrees its employees need higher salaries. He also supports the request for more funding and said he expects the state Assembly’s version of the budget to “address this issue.”

“I think the Legislature recognizes the issue these not-for-profits are raising,” Mr. Thiele said. “I think people need to be paid a living wage, but we have to look at some of the unexpected impacts and I think this is one of them. And we need to see if this can be addressed in negotiations.”

North Fork Assemblyman Anthony Palumbo (R-New Suffolk), who met with members of both organizations, said the issue they and other nonprofits face can be solved simply: by not increasing the minimum wage.

“These organizations are already operating hand-to-mouth, and without providing appropriate funding to cover the minimum wage hike, we’re going to have a real big problem, quite frankly,” he said.

“For political reasons, these things sound great,” Mr. Palumbo added, noting that he sees several possible unintended consequences of a $15 minimum wage, especially in the private sector: People could be paid off the books or simply not be hired at all as businesses try to curb costs in an already competitive economy.

Mr. Palumbo did say he’d be open to considering a slightly smaller hourly wage hike, to somewhere between $9.75 and $15, but cautioned that “the devil is in the details.”

State Sen. Ken LaValle (R-Port Jefferson), who represents the North Fork, did not return a request for comment.

In addition to potentially higher base wages, nonprofits like ADD and EEDA would also have to contend with higher overtime costs, which could reach upwards of $20 an hour, Mr. Lagoumis said. Adding in that much higher overtime pay would “really destroy us,” he said.

Exactly what would happen if support providers such as EEDA were forced to scale back or shut down entirely remains unclear. Mr. Kuriloff also said he doesn’t know how the individuals they serve would be affected, noting the state would have to come up with a plan to provide the services another way.

Mr. Thiele said a shutdown of EEDA or ADD would cause “a major disruption of services.”

“To me there is no reasonable alternative to the delivery of services we have now,” he said. “There is no other level of government that’s prepared to pick that up.”

Neither the press office for the governor nor the state’s Office for People With Developmental Disabilities responded to a request for comment on this article.

It’s not just nonprofits themselves who say their workers deserve a raise. The clients they serve also say staff members who support them have made a huge difference in their lives.

Jamie Gholson, a 23-year-old Riverhead native, was involved in EEDA’s day habilitation program, but felt limited by his experience there.

Three years ago, Ms. Woodley noticed his love of dancing and encouraged him to work past his stage fright and embrace what he loved. She worked to get him added into EEDA’s art program.

“She saw I had potential. She saw I had talent,” Mr. Gholson said. “She’s been like a mother to me.”

Both Ms. Danega and Ms. Woodley said they’re concerned by the risk of EEDA shutting down due to being unable to pay the increased wages.

“I don’t know what I would do,” Ms. Danega admitted.

“I think that would destroy me,” Ms. Woodley said. “It would really leave a hole.”

But she said she was optimistic that the wage funding crisis would work out in their favor.

“I really feel that God don’t put any more on you than you can bear,” she said. “I do have hope.”

Photos: Top: Matt Kuriloff (standing) checks the as Colleen Shanahan (from left), direct support professional Debbie Woodley and Margaret Wilson make a poster for the wage rally last week. Left: Susan Gannon of Cutchogue prepares a poster last Thursday for the rally. (Credit: Barbaraellen Koch)

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