HARRISBURG -- A month ago, thousands of state employees protested about being "held hostage" by the state budget crisis, which was preventing them from getting paid on time.

That problem was solved when Gov. Ed Rendell signed an $11 billion partial or "stopgap" budget for fiscal 2009-10, which gave employees their salaries.

But at the same time he vetoed $13 billion in spending, including funds for many human services agencies, covering mental health and retardation, alcohol/drug treatment, pre-school classes, day care for children of working parents, aid to senior citizens and others.

Now those groups are complaining they're the new "hostages" in the ongoing impasse over taxing and spending between the Democrat Mr. Rendell and General Assembly Republicans.

One of those who is feeling the pinch is Tony Ross, president of United Way of Pennsylvania.

"Budget negotiations have stood at an impasse since the passage of the stopgap budget" three weeks ago, he said. Social service groups that have contracted with the state to perform these human services "are entering their second month of not being paid for their services."

In many cases, he added, these nonprofit health and human service providers "maintain only a few months of financial reserves," so the lack of state payments is causing real pain.

More than 500 organizations that get a total of $100 million in state funds for human and social services were surveyed, Mr. Ross said, and 64 percent are relying on their financial reserves to continue operating. Another 28 percent have been forced to take out lines of credit to keep their doors open, and still others are being forced to rely on donations or are skipping payments to their creditors.

And things will only get worse if state officials don't soon resolve the budget dispute.

"Some 69 percent of respondents [to the survey] report that they have already or will need to reduce or eliminate services sometime before Sept. 30," Mr. Ross said.

Allegheny County's Department of Human Services is delinquent on about $20 million in bills to human service providers -- the first time in Director Marc Cherna's 35 years in government he recalls that happening.

"Now we can't pay because we don't have the money," Mr. Cherna said. "It has the potential to be a disaster."

The county contracts with about 400 human service providers, many of whom are trying to get lines of credit at banks so they can make payroll, according to Mr. Cherna.

But ultimately the providers must rely on the county to pay, and the county relies on state funding.

"If this [budget] doesn't happen by next month, we're really in deep trouble," Mr. Cherna said. "Agencies are going to say, 'We can't pay our staff. We've got to lay them off. We can't provide our services.' "

Adult literacy programs stand to suffer, according to Don Block, executive director of the Greater Pittsburgh Literacy Council.

Although his own group is managing to tread water thanks in part to an endowment, Mr. Block said other programs do not have such wherewithal and are suffering from the lack of state funding.

"It's definitely hitting our field and people are not starting certain classes that they would normally start the first of September, and they are cutting some hours or sending teachers home temporarily," Mr. Block said.

Employees of nonprofit groups like the Lutheran Service Society have been tasked by their boards to come up with contingency plans and prioritize programs if the budget impasse drags on.

"I would really worry if we didn't have anything by, I'd say, the middle of October, the beginning of November," said Patty Davidson, the society's chief development officer.

Crucial programs are funded by state dollars. The society manages about 31 senior centers. Last year, it provided more than 108,000 home-delivered meals to 665 senior citizens in Beaver, Butler and Westmoreland counties.

"We borrowed a few more months of time" with the stopgap measure, Ms. Davidson said.

At Lifespan in Homestead, the contingency plans were drastic. The group provides 400 home-delivered meals a day.

"It has been a merry-go-round for us for the last three months, trying to come up with a contingency plan to help us decide what we were going to do when we ran out of money because there were no funds coming in," said Dotti Ward, agency support director.

Before the partial budget bill passed, the agency envisioned "a very intensive cutback for the whole agency," Ms. Ward said. But with some temporary relief, Lifespan is trying to cut costs with a variety of measures, such as combining programming at senior centers.

Sharon Ward, director of Pennsylvania Budget and Policy Center, a liberal think tank in Harrisburg, said the budget impasse, now almost two months long, leaves many human services agencies "with even fewer resources and leaves more citizens without services when they most need them."

Bruce Grim, associate director of the Pennsylvania Council of Children, Youth and Family Services, said that if nonprofits have to lay off workers it will "mean lost revenue to state and local governments through income taxes ... occupational taxes and reduced sales for a variety of businesses."

Senate Bill 850, the stopgap funding measure signed by Mr. Rendell, has helped some agencies avoid disaster while hurting others.

"There's winners and losers in that stopgap, but in the end we all lose," said David Ross, public policy officer of the Pennsylvania Association of Non-Profit Organizations. "They're desperate right now."

Mr. Rendell said yesterday he knows the budget standoff is causing problems for many agencies, admitting that "the pain is real." But, he added, "It's more important to do the budget right than to do it fast."

He noted that several dozen day care agencies and other social service groups came to the Capitol last week to press for adequate funding for 2009-10, and they agreed that if getting sufficient funds takes longer than desired, then so be it.

"They also said 'do it right, not quickly,' even if that means short-term harm," Mr. Rendell said. He added that the groups oppose cuts of 50 percent or more in their funding, as is proposed in the Republican budget proposal that he partly signed and partly vetoed.

Also, Mr. Rendell said he and the Republicans are making some progress on a "spend number," meaning the bottom line of the new budget. He said it could be in the range of $28 billion for the fiscal year that began July 1. That's less than the $28.9 billion Mr. Rendell originally proposed in February and more than the $27.3 billion bottom line of Senate Bill 850.

But once a bottom line is agreed upon, Democrats and Republicans still have to agree on how to raise the necessary revenue. Mr. Rendell wants "recurring revenue" from some source, such as removing some sales tax exemptions, but Republicans so far are willing to use just one-time revenues, such as the $750 million Rainy Day Fund, for emergencies.