06/09/2010 05:12 am ET Updated May 25, 2011

Albany's Budget "Cuts" Will Cost New Yorkers Serious Money

New York State is staring down the barrel of a $9 billion deficit. This deficit comes at the worst possible time: New Yorkers slogging through the Great Recession need services now more than ever. But whenever a budget battle happens, safety net services come under the gun.

Albany should take a close look at innovative programs that provide needed services while offsetting spiraling public expenditures in other areas. Supportive housing is just such a program. A growing body of new research shows that programs seeking to end homelessness are worth their weight in budget gold.

Currently, large amounts of public funds get spent on a relatively few individuals: people who repeatedly cycle between homelessness, incarceration and crisis services and long-term users of shelters and publicly-funded institutions. Providing stable, supportive housing breaks these patterns. It drastically decreases hospitalization, recidivism, and addiction and health problems. Studies show that participants in supportive housing programs around the country are admitted to the hospital 45% less frequently, and visit the emergency room 56% less.

That saves money.

Here in New York, a supportive housing evaluation found overall savings of over $18,288 per unit of housing -- virtually covering the entire cost of providing both the housing and services within supportive housing. The biggest savings were due to reductions in inpatient psychiatric hospitalizations and other health related areas, costs either partially or fully borne by the State. In addition, data shows that supportive housing reduced prison stays among those with mental illnesses in New York by over 70%. With every inmate in state prison costing over $32,000 a year (and that's not counting mental health services, policing and court costs), a program that provides real reductions in public spending should get New York's attention.

More importantly, cuts to supportive housing programs could actually increase budget deficits next year! A case in point is the Single Room Occupancy (SRO) Support Subsidy. Without funding of least $22.2 million for the SRO Support Subsidy in FY 10/11:

--Up to 800 low-wage workers will lose their jobs, many of whom are formerly homeless and disabled;
--As many as 91 existing and new buildings housing more than 15,000 people could close, destabilize without services, or be unable to house chronically homeless individuals; and
--Hundreds of people will lose support and return to homelessness. If just 255 tenants return to homelessness, any savings from this cut would be spent instead on shelter and other expensive emergency services.

Another program on the chopping block is the Supported Housing for Families and Young Adults Program (SHFYA), the only statewide funding offering homeless families and young adults the proven benefits of affordable housing with services. Yet the Governor's preliminary budget zeroes out the entire $5 million allocation for this vital program. If it is not restored:

--79 housing programs could be shuttered, resulting in the loss of 170 jobs;
--Nearly $6 million in federal matching funds will be jeopardized; and
--Approximately 760 of the 1400 households funded through SHFYA will lose all support services and are likely to be made homeless, with many more at-risk. If just 163 of these families become homeless, any savings from the cut would be lost in increased shelter costs alone.

The DOH/AIDS Institute proposed a $2.7 million cut to NY/NY III funding for supportive housing for persons living with AIDS. Without full funding restoration to $6.6 million in FY 10/11:

--DOH/AIDS Institute will become the only City or State agency in the history of NY/NY and related high service needs agreements to renege on its promise; and
--Approximately 250 homeless people with AIDS will continue to languish in homelessness or return to streets and shelters. Any savings achieved will be far outweighed by increased expenditures on Medicaid and other crises services caused by prolonging the homelessness of gravely ill people.

So when Albany gets down to addressing a scandalous $9 billion deficit, the Governor, the Senate and the Assembly need to agree on at least one thing -- these challenging times demand fiscal prudence. This means it's actually the best possible time to sustain investment in innovative, cost-effective solutions to homelessness--like supportive housing.