An Update On Budget Cut Impacts

This week it will be 3 months since the state of Illinois passed its budget. As the economy worsens, money dwindles and need for social services increases, the impacts of this budget has become more pronounced. Our office, working collaboratively with the Responsible Budget Coalition has been contacting human service agencies to try and accurately gauge the depths of these cuts across the state. The findings have been clear: the enactment of budget cuts have compounded an already dire situation. Budget cuts, combined with delays in payment and increased demand for services have kept human service organizations scrambling just to keep their doors open. Below we provide a small sample of how these three factors plays out at actual agencies and what they implications they may have.

Budget Cuts

Ranges in the size of cuts to each agencies have varied across the state. These cuts have ranged anywhere from $15,000 to over $1.7 million for any given individual agency. For example, The Anna Bixby Women's Center saw a $150,000 reduction in their budget, which constituted approximately 15% of their overall budget. In response to this cut, the Center, which provides social services to survivors of domestic violence, had to lay-off 50% of their entire staff.

Impact INC, which is an independent living center providing services to the disabled lost 15% of their general revenue which amounted to $132,110. As a result of this cut the center had to layoff two specialists and one program coordinator, causing over 200 disabled citizens to lose services - services that were key in helping them live self-sustaining, dignified lives. Sadly this scenario has played out at Independent Living Centers across the state, as 1.6 million dollars were cut from 22 centers.

County Health Departments, which provide low-cost vaccinations, administers WIC program for women and children and conduct health inspections of restaurants also saw significant state funding shortfalls. For example, The Vermillion County Health Department, facing an $81,000 budget reduction was forced to eliminate its Teen Parenting Program and lay off five of its workers.

Delayed Payments

Equally as damaging to organizations as the aforementioned budget cuts has been the state government's inability to make timely payment for rendered services. The Shawnee Alliance for Seniors, which provides Adult Day Care for the elderly were waiting on $500,000 worth of bills, which the state was 97 days late in paying. The Fellowship House Rehab Center in Anna, which specializes in substance abuse, waited over 6 months for the state to pay $1.5 million from services rendered last fiscal year.

Given the already precarious nature of human service fiscal health, many organizations are struggling to keep their doors open waiting for the governments tardy payments. In fact, to make up for these missing funds, some organizations have sought out additional loans or lines of credits. These additional loans and lines of credit come with hefty interest rates and administrative costs. While waiting for the state's payment The Fellowship House Rehab Center in Anna was forced to take out a loan which had a six percent interest rate. In an ironic twist, when the Rehab Center is forced to make interest payments, they will be unable to use money from their state budget but rather will have to find those funds elsewhere.

Increased Demand For Services

Unemployment and poverty rates are on the rise throughout Illinois hitting low-income populations the hardest. With the recession exposing more and more families to the ills of poverty, these families are turning to human service organizations in droves. Bethany Village, which runs a food pantry in Anna, Illinois, saw a 20 percent increased demand for their services. So, while Bethany Village didn't see a reduction in their budget from last fiscal year, retaining current budget levels is in essence a 20% reduction.

The picture gets even bleaker for other agencies. Embarras River Basin Agency which administers homeless prevention programs for the low-income and the elderly, saw their budget get slashed by $67,000 despite the demand for these reduced services increasing 30% from last year alone.

Still, it is hard to grasp the full impact of how this year's state budget is affecting service rates because of the nature of these programs. Agencies have responded to this budget crisis by reducing services, increasing furlough days and reducing hours of operations. Hence, it is impossible to fully gauge how many clients are seeking services because these agencies may never even see these people.

Where Do We Go From Here?

The agencies and organizations mentioned here are only a fraction what is happening all over Illinois. The combination of budget cuts, delayed payments and increased demand for services has created an economic climate that human service organizations in Illinois cannot expect to sustain. Social service agencies may be able to survive day-to-day for the remainder of this fiscal year, but what will happen come next fiscal year? With the absence of American Recovery and Reinvestment funds to fill budget holes this problem could prove to be fatal to organizations that dedicate themselves to helping the the vulnerable in the state of Illinois. How will this impact our communities, our families? Is this really our vision for what our state should look like?

If it is not, than do your part to support the effort of the Responsible Budget Coalition in insuring that the Illinois General Assembly does what it is morally obligated to do: pass a responsible budget that increases revenue sources so as to offset these budget cuts. A rally is being held at the State Capital in Springfield this Thursday at 12:00 pm to stop these cuts that hurt Illinois families.

Dean Baker nicely sums up the important role that rallies, such as the one this Thursday, can play in affecting public policy:

The elites hate to acknowledge it, but when large numbers of ordinary people are moved to action, it changes the narrow political world where the elites call the shots. Inside accounts reveal the extent to which Johnson and Nixon's conduct of the Vietnam War was constrained by the huge anti-war movement. It was the civil rights movement, not compelling arguments, that convinced members of Congress to end legal racial discrimination. More recently, the townhall meetings, dominated by people opposed to health care reform, have been a serious roadblock for those pushing reform.

Now is the time to come together and stand in solidarity for a budget that does not cut services to men, women, and children precisely at the time they are needed most. Much damage has already been done as a result of these budget cuts, but together, with your help, we can avert further damage by passing a responsible budget that allows us all to do better.