Lutherans in Minnesota

Budget cutting hurts poor people and church agencies serving them

LSS struggles to make more with less

It’s time for the religious community to stand up and be counted.” That’s the
message President Mark Peterson of Lutheran Social Service of Minnesota
(LSS) got when he met with key legislators at the State Capitol in January
regarding health and human services budgeting for the coming biennium.

While acknowledging the challenge to people of faith, Peterson has an LSS
success story to tell amid some of the gloom. He reports that in LSS’s final
quarter of 2008, the budget of $1.44 million was exceeded by $594. That’s
essentially 100 percent of budget … coming from individual and corporate
gifts. With LSS’s success, he found himself in the role of cheering up state
legislators demoralized as they face a budget shortfall estimated at $5 billion.
It’s expected that as much as one-third of the shortfall may be made up by
cuts in health and human services. Some of those services are administered
through LSS with funds from the state.

Even with that glimmer of hope, health and human service needs expand.
With the increasing need and tight finances, Peterson said, “Social service
agencies need to develop a clarity about what works and look for ways to
innovate.” For example, he said, in some cases of chronic diseases, more
social support might mean less medical expense. A volunteer might check in
to be sure a person was staying on his/her diet, following other health-
related regimens — serving as a sort of “cheerleader.”

Peterson observed that in 35 years working in the social service field he has
never seen a challenge like the current one. At LSS, Peterson reports there are
massive increases in requests from families struggling to keep their heads
above water with budget and debt challenges.

LSS has seen a doubling from 2005 to 2008 in demand for financial
counseling services. In 2008, 23,000 households were served with debt
management, bankruptcy, budgeting and mortgage counseling. With the
sharp increase, callers are waiting for four weeks for a counseling session.
The average household debt is $13,000.

In another financial area, LSS is the largest provider of foreclosure prevention
counseling in the state of Minnesota, serving 60 of 87 counties statewide.
The program helps families avoid foreclosure with no-interest loans for those
who qualify or plan for a “soft landing.” The growth in demand has gone from
3,000 families served in 2005 to 18,000 families served in 2008. Peterson
says the number of families to be served in 2009 is “only limited by our
struggle to expand capacity.”

He observed that more assistance is needed for families experiencing layoffs
and reduced incomes that make paying bills difficult. He said, “The risk to
these families is that good solutions, such as housing or financial counseling,
may not be readily available. Many have situations that are ‘fixable’ with
timely, effective financial counseling. Without readily available assistance,
debt settlement scams, credit repair clinics, and bankruptcy ads can sound
appealing when families are facing desperate financial situations, but they
often bring even more financial harm.”

Affordable housing is another area in which LSS works, and the economic
downturn has placed added stress on families. Evidence of the need is seen in
LSS’s new Center for Changing Lives in south Minneapolis. More than 1,000
families applied for 48 units of affordable housing included in the center.
Homeless youth services are another area of particular concern. Six
emergency shelter beds at the LSS Safe House in St. Paul are full every night,
with two to 11 youths turned away. There are up to 25 applications for every
opening at LSS’s Renaissance, a six-bed transitional housing service for
youth in Duluth. Besides shelter, what youth need most is jobs, and the
majority are unable to find them.

There are also sharp increases in the need for mental health counseling
related to job loss. This affects individuals as well as entire families, as
worries and anxiety increase.

Energy Assistance

In Crow Wing County in central Minnesota, where LSS provides energy
assistance, more than 60 percent of 3,000 households served annually had
applied for aid in November before fuel assistance grant funds were even
available. The pace of incoming applications is the greatest in the 13 years
LSS has provided the service.

Senior Nutrition

Senior Nutrition Services statewide were recently running a $105,000 deficit
due to increased costs for food, transportation, and packaging. One
homebound elderly woman recently wrote a note apologizing for decreasing
her freewill contribution for home-delivered meals due to her increased
heating bills.

General Budget

LSS began serious service reductions a year ago related to the loss of revenue
from local government sources. Included were:

* closing group homes for youth in three communities,
* closing two small residences for persons with developmental disabilities
because the state has drastically limited access to care for this population,
* downsizing refugee services as the numbers sent to Minnesota are sharply
reduced, and
* laying off 75 employees, three percent of the total LSS workforce.

Additional steps being taken in anticipation of further cuts in state funding
for its programs include a wage-and-salary freeze for 2009 and advance
planning for further expense reductions, if necessary, when the state’s
budget is finalized.

In addition to challenging people of faith to step forward in this nearly
unprecedented need for services in the face of funding cutbacks, Peterson
observed that the state’s budget is a moral document as well as a financial

Additional information about LSS and opportunities for giving in these
challenging times are available at the LSS Web site: