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Blood on the sidewalk

Thursday, Jul 2, 2009

* In my opinion, Gov. Quinn has crossed the line

Caught in the crossfire are social-service providers who were previously warned by Quinn that dramatic cuts of 50 percent or more would result if lawmakers didn’t come up with more money. In a statement, Quinn warned that organizations providing services not backed by a court order did so “at the risk of not being paid.” He said nine organizations have sued stemming from the impasse.

Frank Anselmo, chief executive officer of the Community Behavioral Healthcare Association of Illinois, said providers of services to the mentally ill already have laid off staff and stopped taking patients. He said Quinn has not put in place contingency contracts that guarantee eventual payment, something prior administrations have done.

Instead of contingency contracts, Quinn told vendors and providers that they were outta luck

[Quinn’s] office then released a statement that Illinois “has very limited authority to pay its vendors and grantees.” The state, however, “will continue to operate and provide essential services to protect the health, safety and welfare of Illinois citizens, such as maintaining prisons and providing emergency services and legally-required social services. Other vendors and grantees who currently perform state services do so at the risk of not being paid,” the statement concluded.

And these statements by Comptroller Hynes show a lack of understanding about how providers and state vendors operate…

Hynes says social service agencies wouldn’t miss any payments from the state until later in the summer, because - even when there is a budget - they aren’t paid immediately.

HYNES: If they provided services today, by the time they got their paperwork into the agency and it’s submitted to our office, and with the cashflow delays we’re having, we’re talking several months. So that’s why the day-to-day social services don’t have a real, hard-and-fast deadline like a payroll does.

Hynes does acknowledge that the governor’s letter is going to create some hardships. The reason is that these social service agencies are basically just small to mid-sized businesses. For-profit vendors are almost all traditional businesses. Like all businesses, they occasionally have to borrow money to level out their revenues. Quinn’s letter, however, will scare the devil out of bankers.

More posturing

Quinn suggested lawmakers shouldn’t dillydally, but they aren’t scheduled to return to the Capitol to deal with the budget situation for two weeks.

And Quinn indicated that he wouldn’t bring them back before then. Another blow to those social service groups and vendors.

* Everybody else, including state workers and Public Aid recipients, are pretty safe

…the lack of a budget for now may mean very little for most state agencies. Court orders require the state to make public aid payments regardless of the budget status. And the last time the state found itself in a similar position, a court told the state to continue sending out paychecks while the budget remained up in the air.

So you can most likely ignore most of the huffing and puffing about that issue. It’s the vendors and the providers who are in most danger now

Twelve of the 33 employees at A Woman’s Fund in Urbana already have lost their jobs, said the agency’s executive director, Tami Tunnell.

And 31 of the 210 staffers at the Mental Health Center of Champaign County were told Wednesday that they are being laid off, said Chief Executive Officer Sheila Ferguson.

Blood on the sidewalk

At the H Group in West Frankfort, administrators cut 33 jobs and 12 employees took pay cuts and demotions, said John Markley, executive director.

“If any legislator was looking for the blood on the sidewalk so to speak, it’s today (Wednesday),” Markley said. “If legislators are wondering if it’s really a crisis or not they can come and sit in our office and watch us tell our clients we can’t serve them; watch us have to tell our staff there is no need for their service because they aren’t funded by the sate anymore.”

Markley estimated the H Group, which provides mental health and addiction services in Williamson and Franklin Counties, will serve 1,000 fewer people this year than the 7,000 served last year. […]

[Fellowship House in Anna’s CEO Mickey Finch] said she has already cut seven jobs at Fellowship House and cut the number of patient beds from 40 to 20. She said the agency can make it until the end of the calendar year before shutting down.

More

Sabrina’s been laid off. And Keith is on a 14-day unpaid furlough, his job future uncertain. It’s a devastating one-two punch for the couple.

The Georges both work for Treatment Alternatives for Safe Communities (TASC), an agency that was used by the courts to divert non-violent convicts with addiction problems away from prison, to probation and treatment. But Tuesday, after Illinois failed to pass a budget, the agency laid off 50 workers and furloughed 150 more for two weeks.

Asked the status of those 150 furloughed employees, TASC Executive VP Peter Palanca said, “We don’t know, given the uncertainty of the budget, given what’s going on. It’s anyone’s guess what’s going to happen.”

As a result, the office is deserted. Rows and rows of empty desks, and boxes piled high with files of clients who aren’t being helped.

* Related…

* Mutual Ground’s domestic violence shelter closes amid budget fight

* Mattoon adult education center forced to shut doors; Lake Land College still owed $5.3 million by state

* People with kids, disabilities to feel the pinch without a state budget

* Adams: Obligation to state’s kids a matter of law

* Groups sue Ill. over budget impasse: Quinn said Wednesday afternoon that nine lawsuits had been filed in the past 24 hours.

* Overtime issue raised by prison union chief

* Quinn to talk budget with women lawmakers

* Lawmakers field calls, speak minds on budget impasse

* Profiles in failure

* New fiscal year, same stalemate

* Quinn vetoes budget; workers will be paid

- Posted by Rich Miller        

41 Comments
  1. - wordslinger - Thursday, Jul 2, 09 @ 10:41 am:

    Here’s where it gets confusing:

    1. I think I saw the other day that the Comptroller is currently cutting checks to vendors for services provided in February.

    2. Even without a budget, the state is obligated under the state and federal constitutions to pay for previously contracted services.

    3. As cash comes in, isn’t the Comptroller obligated to keep paying the vendors for services already provided in FY 2009?

    4. Wouldn’t that mean that those providers have about a four-month state cash flow still, even without a budget?


  2. - Will County Woman - Thursday, Jul 2, 09 @ 10:42 am:

    Re: profiles in failure…

    i agree with the trib, but after watching cullerton on chicago tonight i think the gov is most at fault.

    he keeps saying how he is open to talking and cooperation, but then in the next breath he says he refuses to talk about or consider any budget that doesn’t include all of what he has requested.

    carol marin was doing fine until she started trying to play gotcha, by asking cullerton to speak on madigan. he can’t and shouldn’t speak for any other fellow dem party legislative leader. it’s not good business/politics and he’s gotta work with madigan. surely carol didn’t expect him to answer, so i’m not sure why she kept trying to press him.


  3. - montrose - Thursday, Jul 2, 09 @ 10:56 am:

    ++4. Wouldn’t that mean that those providers have about a four-month state cash flow still, even without a budget?++

    Yes and no. The problem is two-fold. The providers are using the credit lines/bridge loans Rich referenced to cover for this massive backlog in payment. It is not as though they are getting a check today for Febraury and will get a check next month for March. They have not been paid in months, so they are doing whatever they can to cover costs while they wait for the state to pay them. Even if an FY10 budget was passed today that provided full funding for services, providers would still be hurting with this backlog.

    Add into that the mess that is FY10, and providers are in a place where they just can’t cross their fingers and hope the money flows again soon. They have to do layoffs and program shut downs because they simply do not have the cash on hand - and, as Rich notes, won’t be able to access credit with all the uncertainty - to provide services that rely on state contracts.


  4. - For the Record - Thursday, Jul 2, 09 @ 11:01 am:

    Quinn is correct. Even service providers who have state contracts for FY ‘10 will note that all contain standard boilerplate language noting that the contracts are “subject to appropriation.”

    The state Constitution prohibits the Governor from entering into contracts without appropriations authority.

    To the extent that he has a crystal ball or other prophetic abilities, or is able doesn’t to predict the actions of the General Assembly even when Speaker Madigan says he doesn’t know how things are gonna turn out, Dan Hynes may be correct.

    The General Assembly may pass a budget that provides 50% or more funding for vital social services in a lump sum, and providers may get paid for services they delivered before appropriations were in place.

    But, the General Assembly might also pass a budget that’s less than what the Governor expects. Given that we now have to move $461 million into DCFS in response to a federal court order, the General Assembly might cut funding for other service providers more than 50% in order to fill that $461 million hole, if new revenue is not available.

    Or the General Assembly might decide to pass a line-item budget, with different priorities than the 50% across-the-board cuts that the Governor was planning. Some programs that lawmakers consider a priority - like pre-school and home care for seniors and the disabled - might get funded at 80 - 100%, while others the Gov had planned on cutting 50% get cut 100%.

    Also, while the DH is correct that the last time the state went without a budget, Hynes was given authority to keep issuing payments, I believe if you go back and check the record, the judge made it clear that was a one-time deal.


  5. - Ghost - Thursday, Jul 2, 09 @ 11:01 am:

    This is going to further damage the economy, Increased unemployement and lak of funding for several small business is going to ripple through our economy and cause greater hardship then a small term limited income tax.


  6. - Rob_N - Thursday, Jul 2, 09 @ 11:05 am:

    In a roundabout way, the GOP is getting its wish: Illinois “government” is being drastically cut.


  7. - will county wiseguy - Thursday, Jul 2, 09 @ 11:09 am:

    I also watched Cullerton last night. There is plenty of blame to go around, maybe not equally, but they all deserve their fair share. Let’s be frank about the situation: (1) the State needs more revenue to fund vital services and everyone knows it; (2) the Speaker is playing political “chicken”, refusing to put votes on a tax bill until Tom Cross commits 10-12 votes so the Dems don’t get the blame for raising taxes; (3) While this game of “chicken” is going on, programs are being shut down, staff are being laid off and people are losing services they desperately need. The Governor is partially to blame because he could have asked the Senate to pass the bonding bill and then used the anticipated revenues to temporarily continue funding at 100%, even though it would not have given him enough to fund programs through the entire fiscal year. He would have had to take the chance that the leaders will eventually agree on revenues and other reforms and fund a full budget with reliable revenue sources. Cullerton suggested in the interview that this is likely to happen. But if you were the Governor, would you spend as if you had a full appropriation even if you know there is a good chance you will run out of money in November or December? Maybe he should do that and call their bluff by forcing a scenario where the money actually does run out in a few months.

    Bottom line: Stop playing political chicken with people’s lives. Get to work on a full, fair humane budget now and pass the revenues needed to fund it now. The costs of not providing these services are much higher than the cost of restoring them at last year’s levels.


  8. - Niles Township - Thursday, Jul 2, 09 @ 11:13 am:

    I agree with For The Record, that from a legal standpoint, Quinn cannot just continue things as normal while there is no appropriation approved. This is a bad result, but one that could have been avoided had Madigan & the legislature put together a budget that made sense. You may (and I do) disagree with Quinn’s proposals, including the tax increase, but at least he proposed a balanced budget. Madigan let a budget that was so out of whack be the only budget his house approved. So while there is plenty of blame to go around (Quinn, Cullerton and GOP among them), I lay most of this at Madigan’s feet.


  9. - Crazy - Thursday, Jul 2, 09 @ 11:16 am:

    Other than sound bites on the local news, I am new to the political process in Illinois. In the past few weeks, while confronting the realities of the doomsday budget in my own life (I was laid off), I have become more involved and interested. I have a question, what was the thought process behind reducing the social service budget by 50% across the board? Whose idea was it and why did they think this was a sound idea to fiscally save Illinois?


  10. - Eileen Durkin - Thursday, Jul 2, 09 @ 11:25 am:

    At Neumann Association we support adults with both a developmental disability and mental illness. We turned away 40 clients yesterday, July 1, who came for services even though we had told them and their families that the programs supporting them were cut by DHS effective July 1. It was heartbreaking. These clients have nowhere else to go. Three clients have been hospitalized already with extreme anxiety because of their upset about the termination of services. We laid off 42 staff today. Several of our clients are at imminent risk of homelessness, insitutionalization and hospitalization. On top of these cuts, the state owes us over $3million for services provided as far back as February. It’s hard to understand why social service agencies weren’t given continuation contracts while the budget for the fiscal year is being resolved.


  11. - George - Thursday, Jul 2, 09 @ 11:25 am:

    “I have a question, what was the thought process behind reducing the social service budget by 50% across the board? Whose idea was it and why did they think this was a sound idea to fiscally save Illinois?”

    Madigan’s idea. It was approved because that is all the money the state had for all of next year, and the House wouldn’t pass a tax increase.

    It seems some legislators thought it was a “6-month budget”, to put the pain off for 6 months. But it was actually all the money for the year.


  12. - Bill - Thursday, Jul 2, 09 @ 11:25 am:

    Memo to Gov. Quinn:
    Pat, no disrespect intended, but you are in way over your head, my friend. Give me a call and I’ll come down there and help you bail yourself out. I’ll show you how we do things on the South Side and I won’t hold you up for Filan money to do it, either. Don’t wait too long though or even the master will no longer be able to help you. I eagerly await your call.


  13. - Louis Howe - Thursday, Jul 2, 09 @ 11:26 am:

    Job losses accelerated to 467,000 in June, substantially higher than the 350,000 economists expected and reversing a 4 month decline in the rate of decline. Bottom-line–This recession is going deeper and longer than the happy talk we’ve rec’d from Gov’t forecasters. Quinn has not only been behind the curve but risks falling off the charts unless he changes his tin cup Human Services strategy.


  14. - OneMan - Thursday, Jul 2, 09 @ 11:28 am:

    Gov Quinn listen to those who offer to help from the Univ of Route 6


  15. - dupage dan - Thursday, Jul 2, 09 @ 11:32 am:

    Crazy,

    Stick around - you’ll learn alot. I certainly have.

    Re: the 50% funding. It was not someones idea to fund at that level. It has been argued that without additional tax revenue the state can’t fund programs beyond 50% of the last fiscal year. The truth of that can be (and is) debated by many.


  16. - Crazy - Thursday, Jul 2, 09 @ 11:40 am:

    “Madigan’s idea. It was approved because that is all the money the state had for all of next year, and the House wouldn’t pass a tax increase.

    It seems some legislators thought it was a “6-month budget”, to put the pain off for 6 months. But it was actually all the money for the year.”

    George - that seems way too easy and simple for such savvy, seasoned politicians.

    I cannot imagine that no one in Springfield understands how much fear and suffering they are causing.


  17. - VanillaMan - Thursday, Jul 2, 09 @ 11:49 am:

    In a roundabout way, the GOP is getting its wish: Illinois “government” is being drastically cut.

    Hey fingerpointer - name the GOP leader in Illinois that is quoted in favor of drastically cutting government?

    They don’t exist.

    This disaster is just another in a long line of multi-year intraparty warfare within the Party in Power. Madigan, the head honcho of the Illinois Democratic party is quoted as saying that the Governor has enough money. So, if you have a problem with the budget - you need to deal with the battles going on within the Party in Power.

    Fingerpointing at a minority party that is nearly extinct would be similar to blaming the Whigs for the Civil War. Crazy fingerpointing.


  18. - George - Thursday, Jul 2, 09 @ 11:50 am:

    “I cannot imagine that no one in Springfield understands how much fear and suffering they are causing.”

    Madigan doesn’t want to vote for a tax increase unless there are republicans on the vote. To him, keeping his members away from a politically unpopular tax increase is more important.


  19. - Irish - Thursday, Jul 2, 09 @ 11:51 am:

    It is ironic that we are approaching the day we celebrate our Independence from Great Britain and Illinois again does not have a budget. We would still be a colony if our current state politicians were to trade places with our founding fathers and have to draft a Declaration of Independence and a Constitution and stand up to a powerful force such as Great Britain was at that time. They would not be capable. This unto itself is a very sad commentary on where we are today. To know full well that the quality, character, and abilities, of our leaders have regressed to the point that not one of our current state politicians would have been able to stand with that group in 1775. If they had, the statements we have carried with us from that era might be different. We might have been taught ” Give me a comittee or give me death.” or “I only regret that I have but one vote to offer in exchange for a favor.” or “The battle sir is not to the strong alone, it is to the one who controls the campaign funds for the most of the other members.”


  20. - George - Thursday, Jul 2, 09 @ 11:53 am:

    “Hey fingerpointer - name the GOP leader in Illinois that is quoted in favor of drastically cutting government?

    VanillaMan


  21. - dupage dan - Thursday, Jul 2, 09 @ 11:55 am:

    =Madigan doesn’t want to vote for a tax increase unless there are republicans on the vote. To him, keeping his members away from a politically unpopular tax increase is more important. =

    bingo


  22. - springpatch - Thursday, Jul 2, 09 @ 12:07 pm:

    could someone please explain why Quinn isn’t calling them back into session sooner than July 14th?????


  23. - George - Thursday, Jul 2, 09 @ 12:08 pm:

    “could someone please explain why Quinn isn’t calling them back into session sooner than July 14th?????”

    That would be a Rod-like move.

    Besides, its not like anything will get done on the 14th anyway.


  24. - Secret Square - Thursday, Jul 2, 09 @ 12:21 pm:

    I hope other journalists keep calling attention to the possibility that Madigan is simply trying to put off a tax hike vote until after the primary ballots are set in November. I want enough voters to know that this is going on to make this strategy backfire completely and prompt LOTS of potential candidates to come out of the woodwork and oppose these people.

    I would think that both pro- and anti-tax hike voters would agree that for legislators to refuse to take a stand on this issue purely in a craven attempt to escape the political consequences of a tax hike vote is in itself egregious enough behavior to warrant voting these people out of office.


  25. - Levois - Thursday, Jul 2, 09 @ 12:29 pm:

    We all had high hopes for Quinn’s governorship haven’t we?


  26. - Ghost - Thursday, Jul 2, 09 @ 12:33 pm:

    === name the GOP leader in Illinois that is quoted in favor of drastically cutting government?===

    Tom Cross “We are going to insist on finding ways to structurally change the way we run Illinois government…”

    Structuraly change = drastic cuts. otherwise it would just be Cross saying he wants to trim government spending by 3-5%


  27. - Rich Miller - Thursday, Jul 2, 09 @ 12:36 pm:

    Ghost, he can say that, but has he made any real proposals yet?


  28. - Bill - Thursday, Jul 2, 09 @ 12:41 pm:

    George,
    Rod-like would be to call them on July 4.


  29. - Budget Watcher - Thursday, Jul 2, 09 @ 12:45 pm:

    Q: Wouldn’t that mean that those providers have about a four-month state cash flow still, even without a budget?

    A: The state has a two month lapse period in order to pay outstanding liabilities. That current cashflow lag of 4 months for non-Medicaid bills would have to be halved by Aug 31. The Pension note legislation would have probably provided sufficient relief to get there. Who knows now…


  30. - For the Record - Thursday, Jul 2, 09 @ 12:52 pm:

    Miller hits the nail on the head.

    This press release from House Republicans and the Illinois Policy Institute hypes what they call “critical budget reforms to ensure accountability and performance from state programs, responsible state spending and holding the line on taxes.”

    But read closer, and you’ll see that NONE actually propose cutting state spending for the current fiscal year.


  31. - For the Record - Thursday, Jul 2, 09 @ 1:07 pm:

    Q: Wouldn’t that mean that those providers have about a four-month state cash flow still, even without a budget?

    A: Any member of the Board of Directors of ANY non-profit agency who approved a plan to expend funds to provide services without a plan in place that ASSURED that they could pay those operating expenses would be violating their fiduciary responsibility as a Board member. You’re better off using your funds to purchase a lottery ticket than you are betting on the General Assembly to live up to its shared responsibility to fully fund vital human services.

    The BEST thing they can do is close all programs being defunded, fire all of their staff, eliminate fixed expenses, go dormant, and hope - HOPE - that by next January the General Assembly comes to their senses and they can begin the three to five year process of rebuilding everything that’s been destroyed.

    Furthermore, keep in mind that those organizations were BARELY scraping by when they were funded at 100%. The GA hasn’t yet demonstrated a willingness to provide more than 50% of the funding for programs…and while they can cut their staff by 50%, they CAN’T pay only half their mortgage or rent for programming space.

    In other words, a “four month state cash flow” is like giving a pint of blood to someone with a slashed throat.

    That’s why, as of RIGHT NOW, providers of mental health and counseling services for victims of abuse and neglect are doing the clinically responsible thing, and providing transitional counseling to their patients, delivering as gently as possible the news that they’re no longer going to be able to help them.


  32. - VanillaMan - Thursday, Jul 2, 09 @ 1:15 pm:

    “Hey fingerpointer - name the GOP leader in Illinois that is quoted in favor of drastically cutting government?“

    Since when is 3% drastic? No one is proposing drastically cutting government in Illinois.

    According to the best sources, we don’t even have 5% waste in our budget. No one is suggesting drastically cutting government. The problem seems to be that Democrats so favor expanding government, they believe that reforming it so that we can get a 3% reduction in cost is dramatic.

    It isn’t. Dramatic government cuts would be at least 10%. No one is saying that. You folks need to stop your crying and whining. It is time for change we can afford.


  33. - Ghost - Thursday, Jul 2, 09 @ 1:22 pm:

    === but has he made any real proposals yet? ====

    Nope. But to me it appears he is trying to imply to the electorate that he has called for cuts as the way to fill the 9 billion dollar hole.


  34. - Will County Woman - Thursday, Jul 2, 09 @ 1:28 pm:

    @- will county wiseguy - Thursday, Jul 2, 09 @ 11:09 am:

    and, as cullerton pointed out there is a lot of REAL opposition from the public to a tax increase. government represents many, not just the poor. this is textbook competing interests. politics are very much part of the legislative process, i’m not sure why people are having such a hard time grasping with this.

    i do not support the tax increase for increased social welfare.

    in order for me to feel comfortable with the tax increase, as a taxpayer i do want to see give, in the form of cuts and reforms, before there is just take. do i and others deserve nothing for our “sacrifice”?

    i understand why many legislators first need a little political cover inorder to get behind the increase. had somoeone bothered to provided this crucial political cover in the first place the situation wouldn’t be what it is now.

    cullerton’s comments lastnight only reiterated and confirmed everything that rodogno has suggested for the past 4 weeks about her caucus. she has been reasonable and honest when she says that the gov’s actions post may 31st have been so unnecessary.


  35. - Legaleagle - Thursday, Jul 2, 09 @ 2:04 pm:

    I hear that The Governor is presently meeting with a large group of women legislators at the JRT Building in Chicago , and the meeting is not going well.


  36. - Rich Miller - Thursday, Jul 2, 09 @ 2:12 pm:

    Legaleagle, I just heard the opposite from one participant via text message.


  37. - Give A Break - Thursday, Jul 2, 09 @ 2:36 pm:

    What seems to be lost in some discussions about a tax increase is the fact that yes, these are state funds used by the providers. But, all the people who work at these providers are in fact taxpayers. They all pay sales, income and property taxes.

    They do contribute to the economy. And before anyone starts in on salaries, have you seen what a Human Service provider pays their staff? Those people are not in it for the money.

    And now, many of those same people will be filling out unemployment forms. So instead of paying taxes and spending money, they can’t help but pull money out of the system. The tax payers get to pay for umemployment. That should sure help out the state’s bottom line.


  38. - Will County Woman - Thursday, Jul 2, 09 @ 2:41 pm:

    And now, many of those same people will be filling out unemployment forms. So instead of paying taxes and spending money, they can’t help but pull money out of the system. The tax payers get to pay for umemployment. That should sure help out the state’s bottom line.

    tell that to the governor.


  39. - huh? - Thursday, Jul 2, 09 @ 3:27 pm:

    Secret Square — You forget that Madigan does not think one step ahead, he thinks 20. Those who claim the vote is stalled because he wants petitions filed first forget that the primary is right around the corner. Why do you think he would be ok with a November vote?


  40. - Secret Square - Thursday, Jul 2, 09 @ 3:41 pm:

    I suppose Madigan could even wait until February, at which point he would need only a simple majority instead of 3/5 to approve a tax hike.

    My main point, however, is that IF he really is NOT opposed to a tax hike but is only trying to delay such a vote for as long as possible (thereby prolonging the agony for service providers and clients as well as taxpayers) for political reasons, I personally hope that strategy backfires on him and he ends up having to fight to keep every seat he thought he would “save” by doing this.


  41. - putnam county dem - Friday, Jul 3, 09 @ 7:01 am:

    Get the GA back to do their job ( part time with full time pay and full time pension and benefits )
    and have them stay there until they get a budget and don’t pay then or give them any per diem until they do. That should speed up the process.


Sorry, comments for this post are now closed.


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