Government shutdown could impact Catholic service providers

| June 22, 2011 | 3 Comments

Catholic health care facilities and Catholic Charities could be among service providers that would feel the impact of a state government shutdown if Republican legislators and Gov. Mark Dayton fail to solve the state budget impasse by July 1.

A court was to decide June 23 which services are “critical” and would continue to receive state payments in the absence of a new two-year bud­get. Dayton’s recommendations did not list Medical Assistance payments to hospitals and nursing homes.

Leaving those facilities off the list in the event of a shutdown “could be devastating,” said Toby Pearson, executive director of Catholic Health Association-Minnesota, a state association of Catholic health providers.

“It creates a real big cash flow problem for the providers,” Pearson said. “Some nursing homes don’t have a lot of cash on hand. Most of them are already doing contingency planning to start looking at lines of credit with their banks and other financing options. They are committed to taking care of seniors and their residents.”

Hospitals would also face challenges, he said.

“If you’re a hospital and people lose their insurance, or the state is not paying claims, and they show up, you’re going to provide the service,” he said. “We shouldn’t be taking it out on the folks who have the least ability to make up for it.”

Kathy Tomlin, director of the Office for Social Justice for Catholic Charities of St. Paul and Min­nea­po­lis, said programs like Northside Child Develop­ment Center in north Minneapolis and group residential housing would potentially be at risk if state funding was cut.

“Cash flow for [Catholic Chari­ties] will be an issue if this shutdown goes any length,” she said. “Catholic Chari­ties can expect to not receive close to a million dollars a month in payments from the state and counties. We anticipate that most of those dollars would be paid retroactively, though there is no abso­lute guarantee of that.”

CHA-Minnesota has been working with other state health care associations to discuss options and work to ensure their services are declared critical in anticipation of a potential shutdown, Pearson said.
Catholic Charities has been in conversation with other nonprofit agencies and the foundation community about options.

As of June 20, Dayton and Repub­li­can legislators remained deadlocked over how to remedy a $5 billion state budget deficit. Repub­li­cans want to limit state expenditures to a forecasted $34 billion in revenues, while Dayton wants to raise an extra $1.8 billion by increasing income taxes on the wealthiest 2 percent of earners.

Letter from archbishop

Earlier this month, Archbishop John Nienstedt sent a letter to Day­ton, urging him to protect the common good as part of any budget solution.

“By ‘common good,’ I would in­clude such considerations as: fulfilling the demands of justice and moral obligations to future generations, protecting the lives and dignity of those who are poor and vulnerable as well as controlling future debt and deficits,” Arch­bishop Nien­stedt wrote. “I am particularly concerned that you find a just framework for a budget that does not rely on disproportionate cuts in essential services to those living in poverty.”

He said that he and Tim Marx, CEO of Catholic Charities of St. Paul and Minneapolis, have discussed how “increasing the depth and breadth of poverty is bad fiscal policy and bad economic policy” be­cause it requires more costs in services and results in reduced productivity.

Catholic Charities and Catholic con­gregations are stepping up efforts to meet the needs of those suffering in the current economy, but the church’s work is “a shared responsibility with government as we seek to protect the common good of all members of our society, especially families who struggle to live with dignity under the stress of these difficult times,” Archbishop Nienstedt said.

“Spending reductions, program delivery reform and increased revenue should all be on the table,” he added.

Archbishop Nienstedt sent similar letters to legislative leaders, and ad­dressed the budget issue in his May 26 column in The Catholic Spirit.

For updates on the state budget im­passe and threat of a government shut­down, visit

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Category: Faith in the Public Arena, Local News, Spotlight