Illinois Issues: Budget Deal Will Bring Relief, But It Will Also Bring Cuts

Nov 25, 2015

When the state finally has a budget, who will be left out?

Illinois is facing the very real possibility of going for more than half of the current fiscal year without a budget.

Over that same six months, court orders, consent decrees and the one budget bill Gov. Bruce Rauner did sign — funding for K-12 education — put the state on track to spend well above the revenue it’s taking in. Illinois Comptroller Leslie Munger estimates that roughly 90 percent of state spending is still happening, even without a budget.

Once a budget deal is finally struck, even if there are some new revenues — which seems likely either in the form of a tax increase, or sweeps from other state funds — there will also be cuts. 

The shortfall is caused primarily by the fact that the temporary income tax increase started to step down during the second half of last fiscal year. Cuts had not been made in anticipation of that roll back. Instead of addressing the issue, Democratic lawmakers and then-Gov. Pat Quinn opted to pass a budget they knew would be underfunded.

Rauner and lawmakers worked out a plan to limp along through the rest of last fiscal year, and set the state on track for what seemed to be a budgetary reckoning going into the current fiscal year. “In order to get a balanced budget, we needed to either have more revenue or big spending cuts,” says Kent Redfield, professor emeritus of political science at the University of Illinois Springfield. Instead, neither happened. Rauner and legislative Democrats skipped out on presenting plans to balance the budget and are now locked in a battle over the governor’s agenda.

Meanwhile, money continues to go out the door, and any move to get more revenue, such as an income tax increase, that might be approved next calendar year would likely only be applied over the last half of the current fiscal year. “Fixing the budget was an almost impossible task last spring, and the six months of spending we’ve just been through means it’s an even more difficult task,” Redfield says.

What might be cut? The likely suspects are the areas not getting funding under the current impasse: social services that are not federally mandated or required by court agreements and higher education. The current impasse has been described as a crisis that is only affecting certain groups in the state. Just who is being left out, and might continue to be under a budget resolution?

Seniors, women and children

The Low-Income Home Energy Assistance Program (LIHEAP)  helps the poor pay their heating and cooking bills. It is funded with a mix of state and federal funds. Under the current impasse, the program is not receiving state funding. In his budget plan presented in February, Rauner proposed that the state funding, which comes from fees tacked onto utility bills, be spent elsewhere instead of on LIHEAP.

Without the state funding, organizations that administer LIHEAP have made layoffs, increasing wait times to get on the program. “We’ve seen a lot more people trying to apply for assistance, and we have fewer people who are accepting applications,” says Kelly Chapman, information and assistance coordinator for Senior Services Plus in Alton. “We’re booked right now. We can’t accommodate everybody.” If someone called now, the soonest they would be able to get an appointment would be near the end of December.

LIHEAP programs will also cut off sooner than they typically do.  AARP Illinois estimates that many providers could run through their federal funds by the end of December or early January. 

LIHEAP assistance for heating bills started late this year and will end early if the program does not get state support.
Credit Alan Levine

Seniors are not the only people who benefit from the LIHEAP program. But they typically have fixed incomes and can be more at risk for health problems associated with extreme temperatures. The program prioritizes families with children under five years old, people with disabilities and the elderly. “It’s not like they can just go out and get a job either. It’s difficult for seniors to find employment, if they’re even able to go out and work, so I think that makes them more susceptible,” Chapman says.

Home delivered meals for seniors are also funded with a mix of state and federal dollars. Without state funding, several providers have scaled back the number of days they deliver meals and have started wait lists. Some senior centers have also cut back the number of days they are open to the public.

Centers that provide help to women and children fleeing domestic violence and to victims of sexual assault are missing out on funding during the impasse. The Associated Press reported last month that a handful of emergency shelters have closed across the state. More have scaled back operations, and several executive directors and staff members are working without paycheck.

Many afterschool programs meant to deter violence, provide mentorship and help kids succeed in schools are currently not receiving funding, and the outlook for them once there is a budget seems bleak. The governor’s budget plan zeroed out  key grants for the programs. The K-12 education bill he signed did fund one after-school grant he proposed to eliminate.

Administrators of other programs have received contracts from the state to continue providing some services, but if funding and appropriations don’t come to back them up, the contracts are worthless. Once such program provides help to children from birth to age three who have witnessed violence, such as one parent killing the other parent. “We have a whole slew of human services that were issued contracts with no guarantees that if they deliver service, they’re going to get back paid to July first when they started delivering the service,” says Judith Gethner, executive director of Illinois Partners for Human Services. Her organization represents hundreds of social services providers throughout the state.

She says the administration has opted not to send contracts out for some services, especially ones the governor proposed to cut under his budget. Redfield says that even the groups with contracts cannot be sure that they will be asked to continue working for the state. “Some of those places that have been hanging on by their fingernails, once this all gets settled, they may get paid for services they’ve delivered up to this point and then handed their hat,” he says.

Residents with disabilities and those who need behavioral therapy

Funding for mental health and addiction treatment services not covered by Medicaid has been a target for budget cuts for the past few years, and that doesn’t seem likely to change.

The governor called for some cuts to behavioral health funding in his budget proposal, and the administration has not contracted with providers for some services. For example, contracts for psychiatric services at community mental health centers were not executed this year. (Illinois Issues reported on that cut last month.) Without access to a psychiatrist, centers would not be able to give patients prescription medication.

The landscape for providers of these services is similar to those offering help to domestic violence survivors. There have been scattered closings throughout the state and many are turning away new clients. Some are nearing the end of their lines of credit, and whether or not they are going to make payroll is a month-to-month concern. There are staff members working without pay. “I would suggest that the damage that’s being done to our human service infrastructure is really unprecedented,” Gethner says.

Rural residents

Much of that fraying of the social safety net is taking place in rural parts of the state, where few providers cover large geographic areas and the need is great. In a recent poll from the Paul Simon Public Policy Institute at Southern Illinois University in Carbondale, more than a third of southern Illinois voters said they or someone in their family has been affected by the budget impasse.  

If agencies close or cut programs, there may not be alternatives for hundreds of miles. “For a lot of these organizations, they’ve already been on a downward trajectory and a lot of the doors have already closed,” Gethner says. “And so you have a single provider in an area. …What happens if that organization is in jeopardy?”

Family Counseling Center, which has multiple offices in southern Illinois, took on clients from the Delta Center, which was located in Cairo and closed in August. Family Counseling Center is one of only a few agencies offering mental health and substance abuse services in the state’s seven southern-most counties, which have few public transit options. In order to do that, employees drive all over the region to visit clients’ homes and are not receiving reimbursement for travel because of the impasse. Right now, the agency is only taking on new clients if they are in a state of crisis. 

This isn't like having a pothole in the street, which is an inconvenience, that needs to be fixed. These are real people with real lives. Thousands of people are being turned away.

Sherrie Crabb, executive director of Family Counseling Center, says the center is one of the biggest employers in the area, and the other two rely on state funding, too. “Here in Johnson County, I think the three top employers — one’s the prison, the second one’s the public school and then the third one is us.” Crabb is working without pay, as are other employees at the center.

Senior Services Plus has taken over operations for a senior center in Troy. Jonathan Becker, executive director of the agency, says that if his organization were forced to quit providing a service like Meals on Wheels, it would have serious consequences.   “In our case, I’m telling you, out of 550 people, some of those folks will not make it. They’ll starve.” Senior Services Plus has no plans to end the program, but it has laid off drivers and started a waiting list, which currently has more than 100 people on it.

Minority residents

According to U.S. Census Data, black residents make up almost 15 percent of the state’s population and have a poverty rate of 30 percent and Latino residents make up nearly 17 percent and have a poverty rate of 15 percent. The poverty rate for white residents in the state is 10 percent.  Since minority residents have a higher rate of poverty, it stands to reason that they would be disproportionately affected by cuts to social programs intended to help the poor. That’s the case members of the Illinois Black Legislative Caucus are making when advocating against such cuts. 

Many after-school programs have not had state support since grants were frozen earlier this year.
Credit Christopher Webb

Some predominately African-American neighborhoods in Chicago have been coping with tragedy after tragedy as gun violence has claimed hundreds of young victims. Violence prevention programs have not seen state money since their funding was frozen at the end of last fiscal year. The governor also called for deep cuts to such programs in his budget. “Media reports have detailed how young black men and women are killed in Chicago almost daily, and that is extremely alarming,” Maywood Democratic Sen. Kimberly Lightford, who chairs the caucus, said in a written statement. “Perhaps if we were funding violence prevention and afterschool programs at an adequate level, then our children would have an alternative to the streets.”

College students

The largest area of state funding that could be cut in a final budget deal is higher education.

Parkland College President Tom Ramage said earlier this month that he and other university administrators are preparing to go without state support for the current fiscal year.

Universities have honored Monetary Assistance Program (MAP) grants for the current semester and most have said they plan to continue to do that next semester. To fund the grants, schools are essentially borrowing from other areas of their budgets, such as capital construction spending. With much smaller budgets and fewer options to move money around, many community colleges have not been able to make the same offer to honor map grants.

University of Illinois President Timothy Killeen says the U of I system is spending down its reserves at a rate of $75 million per month. If state money for MAP does not come through, students may be on the hook for the grants, which have already been spent.

Killeen warned lawmakers earlier this month that some students might not be able to graduate in the spring if MAP isn’t funded. “It’s very unclear whether those students can actually graduate because of the loans that will be on their transcripts.”

Rauner proposed a more than 31 percent cut to higher education. Western Illinois University President Jack Thomas told House members at a recent hearing on higher education funding that such a cut would be “devastating” to his school and would result in layoffs. 

U of I president Timothy Killeen warned that some students may not be able to graduate in the spring if MAP grants aren't funded.
Credit College of DuPage

Killeen says a lack of state support would also hurt Illinois’ largest university system. “You will see a very different University of Illinois. It will no longer be a top-25 university of which we can be brimful with pride. I can tell you that.” 

Redfield says it is unlikely that colleges and universities will get zero state funding for the current fiscal year. “I can’t imagine we’re going to close down all the regional universities in the middle of the spring semester. But there’s no question that in this fiscal year and then the following fiscal year, higher ed is going to take a huge hit.” 

Part of the problem is that it is a larger area of spending. Trying to find enough money to minimize the cut could prove difficult, especially if the budget relies on sweeping special funds, which have been hit with sweeps regularly since the state found itself in a budget crisis in 2009. If money can’t be found, funding higher education could mean racking up more unpaid bills. “If you only fund higher education at 50 percent, which would be horrendous, just to come up with the money to get to 50 percent would add another $1 billion to your unpaid bills,” Redfield says. “The math is just overwhelming. We’ve got ourselves into such a bad situation.”

Everyone
The Illinois Black Legislative Caucus is making the case that the budget impasse disproportionately affects minority residents. Pictured is caucus chair, Democratic Sen. Kimberly Lightford.

  This is by no means an exhaustive list of all the programs that might see cuts once a budget comes together. Also, many of them serve several of groups. For instance, a single mother working to get her degree might be a MAP grant recipient and her children might also have attended an after-school program before the impasse. A disabled senior might get in-home care from a struggling rural human services agency and assistance from the LIHEAP program. “These are people. This isn’t like having a pothole in the street, which is an inconvenience, that needs to be fixed,” says Gethner “But these are real people with real lives. Thousands of people are being turned away.”

Even if you don’t fall into one of these groups, you have probably noticed news stories over the last few months about these people and how the lack of a budget is affecting them. Maybe you aren’t directly benefiting from any of these programs, and as far as you know, neither are the people you care about.

In that case, here are a few questions for you: Would you like to avoid paying more in taxes and getting less 

 for it? Would you prefer that your property taxes did not increase? Do you live near a university or community college? If your child or a loved one swallowed something that might be poisonous, would you like to be able to call an expert to find out what to do? If there was a health epidemic in the state, would you want it to be contained? Do you work, drive on roads, take public transit, eat at restaurants and/or drink water?

If you answered yes to any of these, there is a chance your interests might be on the chopping block, too. 

County public health departments are not receiving state funding. Among other things, the departments provide vaccines, inspect restaurants and respond to threats, like the outbreak of infectious diseases.
Credit National Institute of Allergy and Infectious Diseases

The Illinois Poison Center hotline is funded through a public private partnership, but is not getting its state money. The hotline is a toll-free number residents and doctors can call to get expert advice on what to do when someone ingests something that might be poisonous. More than 67,000 people called that hotline this year. Center workers are able to help about 90 percent of callers without sending them to emergency rooms. Rauner did not include funding for the hotline in his budget proposal.

County public health departments are another group not getting funding during the impasse. The departments provide immunizations and respond to public health threats, such as the recent outbreaks of mumps and Legionnaires disease. They also inspect restaurants and provide testing to ensure drinking water is safe. 

Until the budget is balanced and the state appears to be on stable footing, it is likely   Illinois’ credit rating will likely continue to spiral downward. That means borrowing for things like capital construction will cost more for taxpayers. As community colleges and local governments feel the downward pressure of state cuts, there will be campaigns to raise local property taxes. They have already begun in some parts of the state. 

During a hearing on higher education funding, Republican Rep. Dwight Kay argued that lawmakers cannot consider raising taxes without first taking on fundamental reforms.

Colleges and universities not only drive local economies by providing jobs, they also create a skilled workforce that attracts businesses. If students don’t stay here after they graduate — or decide not to even come here to get their degrees in the first place — it hurts Illinois’ economic outlook.

While many of these potential cuts would be unpopular, Gov. Rauner and Republican lawmakers say the state cannot afford to keep raising taxes without also making sweeping reforms. They argue that to do so would be to feed a beast that will never be sated. “You know where [the income tax increase] got us? Nowhere,” Rep. Dwight Kay, a Glen Carbon Republican, said to a college student who came to the House higher education funding hearing to make the case for MAP grant funding. “When you look at the history of the state of Illinois, we don’t run a good ship. We don’t know how to balance budgets. We don’t know how to really spend money in an efficient fair manner.”

Redfield says that there are things the state can do to bring down costs — reducing its prison population, for example. But most of those things would take a few years and the current crisis, with its automatic spending and nonsurgical cuts, has caused Illinois to move away from any semblance of prudent fiscal planning.

“We need a really solid five-year plan, and governors sometimes can think in four-year terms, legislators think in less-than-two-year terms. It’s a terrible environment to try and undo all of it,” he says. “This is years in the making in terms of the damage and then some really bad mistakes for the last nine months to get us into this posture. To undo this is not an easy fix.”