CEO Update: Virginia’s Budget

If you have been following the news in the Commonwealth, you know that the General Assembly closed its session in March without coming to terms on the budget. Without approving the 2-year spending budget for Virginia, the future of funding sources remain uncertain for our agency and others like NW Works.

Unlike other nonprofits in our area, we don’t receive a lump sum payment from the government to fund our programs. As an agency that provides services to people with disabilities, NW Works relies primarily on reimbursement via the Department of Aging and Rehabilitative Services (DARS), the Northwestern Community Services Board (CSB) and through Medicaid waiver to pay our staff and serve our clients.

In particular, the issues on the table in Richmond that impact NW Works most heavily are the proposed Cost of Living Adjustment (often referred to as COLA) for Employment Service Organizations and additional funding to the Developmental Disability Waiver provider rates and Home and Community Based Services. Much of this proposed funding comes from the Federal Medical Assistance Program (FMAP) and the American Rescue Plan Act (ARPA). The cost of living has increased significantly during the pandemic, yet waiver reimbursement rates haven’t increased since 2016. For some perspective, in 2016 minimum wage in Virginia was $7.25. Today, it sits at $11.00. 

While rates haven’t increased since 2016, NW Works and agencies like ours have increased employees wages to match the rising minimum wage and to stay competitive to attract the best candidates to serve our clients. Therein lies our impasse: wages are rising but the reimbursement rates remain fixed, resulting in our company spending more money to serve our clients than bringing in. As a nonprofit organization, we’re of course not in it for the money. But to keep services accessible to a population that often faces tremendous financial barriers, we need the flow of money in and out of the organization to be equal. 

One option would be to fundraise the money to support our programs, which we do primarily to supplement individual programs or projects. However, donations are not guaranteed, and our clients and staff deserve to work in a stable environment where a fundraiser does not determine whether we provide services –or a paycheck.  

NW Works does have a foundation which manages an investment portfolio, which serves as a backstop for the organization if there is a dire emergency or capital expenditure that normal funds cannot meet. It is through this foundation that we paid for a $30,000 repair to our sewage system in 2021 –a very unavoidable and immediate need. But we cannot tap into this rainy day fund consistently if we are to remain financially healthy for the years and decades to come. 

This is why I have been working with our legislators in Richmond, alongside fellow disability organizations, to advocate for this level of funding from the Commonwealth. We remained hopeful that with Governor Youngkin calling the lawmakers back into a special session on April 4th, the budget would be passed and would adequately fund the disability community in a way that supports the individuals and the agencies that serve them. But with no deal in sight, we will keep fighting for funding until the budget is passed.

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