Shutdown Intensifies Nonprofit Limbo

by Laura Glesby The New Haven independent

How long will the heat turn on for low-income New Haveners this winter?

Is anyone reviewing immigrants’ green card applications?

What happens if healthcare subsidies don’t make it into the next congressional funding bill?

Local nonprofits are grappling with those questions and more, three days into a federal government shutdown.

In D.C., Senate Democrats are refusing to vote for a short-term spending bill that does not extend funding for the enhanced premium tax credits that keep Affordable Care Act healthcare plans affordable.

Republicans have so far rejected this demand.

As a result, since Oct. 1, the federal government has shut down all services deemed non-essential.

City programs have not yet seen an “immediate impact” from the shutdown, according to city spokesperson Lenny Speiller.

But with the federal government at a stalemate, local organizations that receive and distribute federal grants are now navigating one more layer of funding uncertainty — in some cases, trying to survive month by month.

Karen DuBois-Walton, president of the Community Foundation for Greater New Haven, said that the shutdown merely adds to deeper concerns among local nonprofits about “devastating and damaging” funding slashes in the proposed spending bill itself, on top of grant freezes imposed by the Trump administration beginning in the spring.

“It’s like operating on quicksand,” described Maggie Mitchell Salem, the executive director of Integrated Refugee and Immigrant Services (IRIS).

The State Steps In — For Now

On Wednesday, Gov. Ned Lamont stated in a press conference that the state will step in to fund many public benefits — at least for the time being.

He said that the state will utilize reserve funds to keep the WIC food assistance program (Women, Infants, and Children) afloat “for the forseeable future,” serving about 50,000 mothers and young children in the state at a cost of about $200,000 a day.

Lamont also committed to funding SNAP (Supplemental Nutrition Assistance Program, which he said provides food to hundreds of thousands of people in the state) and LIHEAP (Low Income Home Energy Assistance Program, which provides heating aid to 100,000 households in the state) through the end of October.

Several of the public benefits at stake have been slated for substantial budget cuts. About 4 million people per month across the country are already slated to lose at least some of their SNAP benefits upon re-certifying in the near future, according to the non-partisan Center on Budget and Policy Priorities. Meanwhile, President Trump has sought to eliminate LIHEAP entirely, while the House of Representatives has proposed a slight increase to the program (which currently helps only one sixth of eligible households due to underfunding).

The shutdown comes at a time when the state has remained divided over whether to remove some of its self-imposed “fiscal guardrails” that have led to a budget reserve of over $4 billion and a recent surplus of over $2.3 billion.

State Rep. Steve Winter argued that the state should tap into some of that funding to provide additional support for programs facing funding cuts.

“It would be wise for the state to use a significant amount of the $2.5 billion in surplus funds from the last year to be allocated to prepare for cuts that we know are coming,” Winter told the Independent in an interview Friday. “I think we have to acknowledge the exceptional circumstances that these dramatic and unnecessary federal cuts put the state in.”

According to the CT Mirror, Lamont has said he’s not yet ready to draw from the surplus to compensate for the shutdown, cautioning that “we’re going to know so much more in the next couple of weeks.”

“Traumatic” Uncertainty

CAANH President Amos Smith. Credit: Thomas Breen photo Credit: Nora Grace-Flood photo

As federal and state lawmakers crunch numbers, the staff at the Community Action Agency of New Haven (CAANH) are tasked with bearing the news to the people who depend on public benefits for basic needs.

Before the shutdown, according to CAANH President Amos Smith, case managers had already started informing clients that at some point this year, or maybe next, they might lose the food stamps that currently keep their refrigerators at least partly full.

With the shutdown underway, there’s an additional message for those case managers to send: We don’t know if SNAP will be able to feed you in November.

If the federal shutdown continues beyond October and the state doesn’t provide further stopgap funding, CAANH may not be able to keep its current level of staffing and services, Smith said.

Some of the grants that could stop coming in include the LIHEAP funding, a Community Services Block Grant of under $1 million (which helps the agency pay for day-to-day administrative and operational costs), and an up-in-the-air Social Services Block Grant (which has in the past provided about $125,000 for case management services), according to Smith.

Smith is worried about the impact of these funding cuts on CAANH’s clients. “Our clients are among the most vulnerable Americans in the United States, who get up everyday and go to work, but still can’t afford food and the escalating costs of rent,” he said. “They are getting ready to experience another devastating blow to their efforts to work every day.”

He’s also concerned about the toll that so many consecutive months of funding uncertainty is taking on CAANH’s staff.

“This is traumatic,” he said. “Many of our staff have been our clients. They have been in a perpetual state of recovery from their own personal traumas, and this adds to it.” The nature of their work adds a degree of secondhand trauma. “We need to make sure they’re healthy enough to continue to deal with the difficulties of our clients,” who can become “angry and upset” upon learning that they might not have heat or food support this winter.

The uncertainty, Smith said, stems not only from the shutdown but from the many months of funding freezes and budget cuts that preceded it.

“I don’t think there’s enough appreciation for the intensity that these kinds of prolonged situations are having on the American psyche,” Smith said.

Longer-Term Dreams Deferred

Immigration applications under review by the federal government may also experience processing delays, according to IRIS Director Maggie Mitchell Salem.

“I cannot tell you this for certain,” she said, but she anticipates that furloughed staff in embassies and USCIS will lead the government to “let up on the processing of applications,” including for green cards.

She pointed out that refugees and asylees must obtain a green card by Oct. 1, 2026, in order to remain eligible for Medicaid under Congressional Republicans’ and President Trump’s July reconciliation bill.

In addition to urgent basic needs, the shutdown will impact long-term infrastructure and development projects.

For instance, Neighborhood Housing Services (NHS) Executive Director Jim Paley wrote in an email that his organization anticipates not being able to receive flexible impact grants through NeighborWorks America for the duration of the shutdown.

NHS, which specializes in rehabilitating blighted historic homes and creating affordable homeownership opportunities, typically receives three to four of those grants — each about $250,000 to $300,000 — each year, according to Paley.

The grants include capital funding for NHS’ development projects and grants supporting “every aspect of our operating expenses,” Paley wrote, including NHS’ development efforts and homeownership education initiatives.

Healthcare at Stake

Suzanne Lagarde: “We are 150 percent committed that we would never abandon these people.” Credit: Thomas Breen photo

Meanwhile, Fair Haven Community Health Care (FHCHC) Director Suzanne Lagarde is holding onto hope that Democrats’ push for continued healthcare funding will succeed.

Democrats are specifically fighting for the continued funding of enhanced premium tax credits for healthcare plans on the Affordable Care Act marketplace. Those tax credits are slated to expire at the end of 2025.

If the tax credits expire, ACA healthcare costs will increase for everyone above the federal poverty level (individuals making more than $15,060 annually, for example) — and those making more than 400% of the federal poverty level ($62,600 for an individual) will lose subsidies altogether.

Connecticut’s marketplace, Access Health CT, currently has about 150,000 enrollees — generally, people who do not qualify for Medicaid or Medicare and who do not receive healthcare from an employer, including many small business employees, part-time job holders, and freelance workers. In July, the agency estimated that 30 to 35 percent of those enrollees could lose their health insurance by 2034, due to both the tax credits’ expiration along with provisions in Congress’ “One Big Beautiful Bill Act.”

Meanwhile, the tax credits’ expiration “ultimately will impact everybody’s healthcare insurance premiums,” said Lagarde. “The ones who tend to scrabble to hold onto their premiums are ones with chronic illnesses,” while “those who are healthier… they’re the ones who are more apt to go without insurance.” That dynamic could increase the average healthcare spending per insured patient — raising the cost of insurance as a whole.

“I really hope that the Senate can come together,” said Lagarde. “I do think this is a bipartisan issue, despite the squabbling. I do think that most senators on some level recognize the importance of keeping these going.”

Lagarde stressed that patients who can no longer afford health insurance will be welcomed at Fair Haven Community Health Care.

The health center charges a fee for uninsured patients, but “if they can’t afford that, we write that off as well,” she said.

And if the health center sees a rise in expenses related to caring for uninsured patients, she said, “we’ll figure out how to deal with that.”

“We are 150 percent committed that we would never abandon these people,” Lagarde said.