End of Recession Nowhere in Sight

The report in USA Today was brief, but its implications leapt off the page for me:

“In the eight states that report monthly tax figures, collections from July through September declined an average of 8.3 percent from a year earlier. Even in places where there's been an income tax increase, such as New York, collections still declined. This comes after there was a 15 percent nationwide drop in tax collections during the first six months of the year.”

With health care in general (and behavioral health and social services in particular) dependent on state financing, I think the ‘end of the recession’ is nowhere in sight – despite the pronouncements of economists. Look for reductions in Medicaid (reduced eligibility, reduced service coverage, reduced provider fees, and more risk-based contracts) and cuts in state-funded services (mental health, addictions, child welfare, juvenile justice, prison health, senior support services, etc.) as the reality of tax collections cause state governments to open up their budgets once again.

If you’re a manager of an organization providing health services or social services – or a county commissioner – the pending tax shortfalls will have the biggest impact on your work. Now would be the time to develop a contingency plan.

For more on planning and managing in these harsh economic times, check out:

• On the Money - The Key Financial Challenges Facing Nonprofits Today - and How Grantmakers Can Help
• The Wolf is at the Door: The Global Economic Crisis and the Public Sector
• Surviving & Thriving in a Recession: A Management Blueprint for Health & Human Services
• Changes in Health Care Financing & Organization: Impact of the Economy on Health Care