* From an op-ed by David M.A. Jensen, president and chief operations officer of Lutheran Social Services of Illinois…
Lutheran Social Services of Illinois is the largest statewide provider of social services, and last year we served more than 96,000 residents. Approximately 80 percent of the people we served are below the poverty level.
The demand for our services continues to grow, as poverty and its associated hardships impact almost 2 million people in our great state. Poverty exists in every corner of Illinois, leaving many communities finding it difficult to address necessary resources to the human services infrastructure. Should the personal income tax not be extended, we estimate the following impact on our citizens based on our own research and that of the Fiscal Policy Center at Voices for Illinois Children:
• 21,000 seniors would not receive the help they need from in-home caretakers
• 140,000 people with mental illness would be denied medication and/or therapy
• 35,000 people with mental illness would no longer receive any services
• 25,000 adults with developmental disabilities would lose community-based services
• 13,600 people would have supportive housing and homeless services
Behind each of these statistics are very real people, in need of hope and a future. The most vulnerable people in our society are at risk for not finding the services they need. Even with generous support from private donors, as a community-based agency we depend on government funding to help our most vulnerable citizens.
* The Voices for Children’s Fiscal Policy Center’s research paper is here. The numbers look pretty sound…
There has been some dispute among legislators about the size of the budget shortfall that would result from the loss of income tax revenue in FY 2015. The revenue-collapse budget submitted by the Governor would reduce “discretionary” spending from the General Funds by about $2 billion. Some critics claim that this figure exaggerates the problem and that the shortfall is much smaller. But independent analysis by the Fiscal Policy Center (FPC), using somewhat different assumptions than the Governor’s Office of Management and Budget (GOMB), produces a similar estimate.
To estimate the shortfall, the FPC begins with projected FY 2015 revenue and then subtracts “mandatory” spending at projected FY 2015 levels and “discretionary” spending at FY 2014 levels. The difference is the projected budget shortfall (see Appendix 2).
The FPC uses revenue estimates from the Commission on Government Forecasting and Accountability (CGFA), a legislative support agency that has statutory responsibility for preparing revenue estimates for the General Assembly. CGFA’s updated projections for FY 2015 are $272 million lower than GOMB’s estimates.
The FPC revenue estimate also includes $402 million from two new special state funds — the Fund for the Advancement of Education and the Commitment to Human Services Fund. Beginning in calendar year 2015, each of these funds will receive 1/30 of revenue from individual income taxes. While the authorizing statute (Public Act 96-1496) stipulates that resources in each fund “shall supplement and not supplant” current levels of funding, there is no way of enforcing this provision.
In regard to “mandatory” spending, the FPC estimate reduces pension contributions from the General Funds by $150 million, based on offsetting revenue generated from unclaimed property. Otherwise, the FPC uses the same estimates as GOMB. In regard to “discretionary” spending, this comparative analysis assumes that appropriations remain at the FY 2014 level.
The GOMB spending estimate subtracts $234 million for unspent appropriations, while the FPC estimate omits this item. For decades, Illinois governors and legislatures have used estimates of unspent appropriations in formulating balanced budgets. This practice is contrary to sound fiscal policy and should be discontinued. Given the state’s current financial situation, unspent appropriations should be used to pay outstanding bills. If the backlog is eliminated, any unanticipated surplus should go into a rainy day fund.
In short, the FPC analysis indicates that the shortfall in the revenue-collapse budget — and the resulting cuts in “discretionary” spending — would still total about $2 billion (see Appendix 2). Any substantially smaller figure would have to involve questionable policy choices such as underfunding “mandatory” spending or ignoring the backlog of unpaid bills.