Omaha’s safety net faces gaps as recession approaches
On December 6, 2022, Heartland Family Service announced the layoff of 30 employees. The cuts were due to a loss of nearly $3 million in philanthropic funding in the coming year. At the time, HFS President John Gianetta told KETV that he was worried about cutting housing programs when costs were rising and it was already difficult to give people a roof over their heads.
Exactly two weeks later, on December 20, the City of Omaha informed the residents of the Legacy Crossing Apartments of the decision to vacate the property, citing multiple code violations. The City has reached out to HFS staff to help tenants with their move.
It wasn’t just the residents who were taken by surprise. HFS employees, including senior management, were preparing for the holiday weekend. But Jeanette said I’m honored when you’re asked for help.
“It’s what our employees live for… we certainly don’t do it for the money,” Jeannette said. “A lot of the employees that we just told we were going to fire them were working over the holidays, working overtime… This is probably the hardest part.”
Housing programs aren’t the only ones feeling the strain. Stephanie Sullivan, communications director for the Heartland Food Bank, said they are seeing the lowest rates of food insecurity in their 40-year history.
In fiscal 2020, the food bank served just over a million people, Sullivan said. They are expected to serve about 1.8 million people in 2023. This is almost 80% more than at the height of the pandemic.
“Over the past few years, we have been working in crisis mode without interruption. Between the 2019 floods, the pandemic, then inflation, and now the threat of a recession, it’s really bad,” Sullivan said. “We’ve heard from people in southwest Iowa who have been going to the local pantry for the past four years because they lost their home in a flood and haven’t gotten it back since.”
Pandemic relief funds under the CARES Act and the American Plan of Rescue Act (ARPA) have been supporting nonprofits and social service agencies since the start of the pandemic. But that support is temporary, and advocates say the need won’t go away. In fact, things could get even worse if the country falls into recession, as many expect.
“The number of people laid off due to the pandemic has caused all this funding, but since people have returned to work, there are many people who assume that the need has disappeared when
It only got worse,” Sullivan said. “Most people are just one crisis away from food insecurity.”
Tom Hoy is Vice President of Development for Together Omaha, a non-profit organization dedicated to hunger and homelessness. He said calls to their crisis engagement program had increased from 1,500 a year to about 7,000-8,000 a year.
“[That’s] targeted people are at high risk of becoming homeless. Once you’re evicted, it’s put on your list, and once you’re in the homeless system, it’s damn hard to get out of it,” Hoy said.
Meanwhile, a report from the University of Nebraska-Lincoln Bureau of Business Research says that Nebraska’s economic activity will stagnate in the first half of 2023. November 2022, and a 0.51% reduction in working hours.
Unemployment figures signal a weakening Nebraska labor market, while the cyclical nature of the manufacturing industry is spreading to other parts of the economy. The report lists both factors as key characteristics of a recession, though it’s still unclear if there will be one.
ARPA funds will continue to support social services for now, although funding should be spent by the end of 2026. Sullivan said that while the food bank has not yet received its first payment from ARPA funds, they expect it to be until March. with more to follow.
Jeanette and Sullivan said emergency funds would be difficult to replace.
“[It’s] a huge influx of dollars at an unprecedented level for areas such as food insecurity and housing that have never been seen before,” Gianetta said. “It won’t be supported and all these systems will have to figure out how to get the size right and go back to pre-ARPA. What we’ve seen… is that things don’t get really bad until disaster strikes, and that’s what’s happening with COVID.”
Mike Hornacek, President and CEO of Together, said funding for nonprofits was at its limit before the pandemic.
“We have already approached this abyss, when philanthropists are lured out. There is no more money…we can no longer afford to rely on charity to solve the problems we face,” said Hornachek. “Philanthropists told us directly that we need to find more sustainable solutions. They have millions of dollars, but they don’t grow on trees.”
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