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York County nonprofit takes out loan, but interest will not be reimbursed

YORK, Pa. — Non-profits are already preparing for state funding payments to be delayed. Payments to non-profits and social service organizations will be d...

YORK, Pa. -- Non-profits are already preparing for state funding payments to be delayed. Payments to non-profits and social service organizations will be delayed starting Friday if state lawmakers can't reach an agreement on a budget. With the earliest scheduled budget vote at the end of August, it looks like this will likely become reality. The payments will not be made until a deal is reached.

The Community Progress Council is one of the non-profits prepared for state funding to temporarily dry up.

This agency serves around 16,000 low-income citizens through programs such as early childhood education, housing programs, and employment training, with a goal of making people self-sufficient. President of the Community Progress Council (CPC) Robin Rohrbaugh said they rely heavily on funding, and spend around $300,000 a month. "Our state and federal grants make up a majority of our budgets," she said.

The state association informed the CPC in advance it would potentially be a rough budget year. The CPC took out a line of credit in order to provide their services without disruption. The only catch is that the money comes with interest. "Interest is not reimbursable with state and federal grants. So the money that we receive to provide services for clients, we can not use government resources to pay back the loan," said Rohrbaugh.

In order to pay back the loan, they will need to use money from other revenue sources and money from fundraising. Although, this creates another challenge. "I think anybody would rather give to the cause rather than to an interest payment," Rohrbaugh said. "Fundraising for interest payments is not something that is value added to the community or the taxpayers. If we take some of our other revenue from other sources that we would normally direct towards client services, to pay back the interest on the loan, basically, it results in fewer people receiving help."

The Community Progress Council's main concern is still on the people they are helping. "We have worked really long and hard for this and hope to maintain service delivery as is," said Rohrbaugh.

The YWCA has also taken out a line of credit to cover payroll costs. "This is part of our regular contingency planning for this type of event. It just makes sense to be prepared in advance. The accrued interest would be an unbudgeted expense, so that would need to be offset with other cuts during this fiscal year," saidJean M. Treuthart, the Chief Executive Officer of the YWCA. "YWCA York receives around 35 percent of our budget revenue from the state to fund learning centers, provide rape crisis services and operate our two domestic violence shelters in York and Hanover. Our mandated programs and services will continue no matter what. The YWCA is the primary provider of domestic violence services in York County, so our shelters and hotline will be staffed regardless of the impact of the budget impasse."

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