When the economy hit the skids, Doreen Foxwell, founder of the Children’s School of Yoga in Monroe, N.Y., reconsidered the wisdom of hosting private yoga classes.
“Many parents have lost their jobs,” she said.
Foxwell began to focus almost exclusively on working with the public, state-supported school system, which seemed like a safer bet. For a while, it was.
Since launching in 2004, the children’s yoga training studio widened its territory to school-sponsored programs in nine counties in Westchester and the Hudson Valley. This fall, it will extend into New Jersey.
Although the expansion has boosted business, Foxwell, 42, is still feeling the financial pangs of the recession: Chiefly, she’s having trouble getting paid.
Just about every month, the schools where Foxwell and three other instructors offer lessons aren’t paying on time. Waiting 30 or even 60 days to get paid hurts cash flow, said Foxwell, adding that now more than ever she needs the money.
“I make it a priority to pay my teachers. It’s really the business owner, me, who gets hurt the most,” said Foxwell, who’s resorted to paying her yoga studio’s rent late in order to pay her employees. She’s also behind on advertising costs - resulting in a small fee each month.
“It’s a big strain,” she said.
Foxwell’s story is hardly uncommon among small, New York-area government contractors, said Maggie Moree, director of federal affairs at the Business Council of New York State, a trade organization in Albany. Not only were state legislators four months late in hammering out a budget, New Yorkers also face a $9.2 billion deficit that’s forcing various state agencies to cut projects and other special programs that small firms rely upon.
To be sure, small business contractors working with the state are no strangers to late budgets. The Legislature has met its budget deadline just six times since 1975, according to the state controller’s office. However, this time was different.
While the Legislature debated over a 2010-11 budget for four months - well beyond many previous budget delays - small shops across the state complained of late payments or even no payments, Moree said.
“Many of our members haven’t seen a dime since April 1, when the state fiscal year started,” she said. “The authorization to spend by any agency isn’t there in spite of the emergency extender bill, which merely kept the lights on and made sure employees got paid.”
What’s more, she said some contracts - particularly in the information technology and construction fields - were canceled outright. “It’s a problem,” Moree said. “It’s a real problem.”
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