Doomsday timeline
Monday, Aug 3, 2015 - Posted by Rich Miller
* My Crain’s Chicago Business column…
There is doom on the way, and nobody wants to talk about it.
The deadlock over the Illinois budget isn’t hurting bondholders or state employees, but it is about to smash social services providers, which depend on about $3.1 billion a year in state funding. These nonprofits do everything from working with kids on probation and finding foster homes to sheltering the homeless, helping autistic children and running group homes for the mentally ill, troubled teens and the developmentally disabled.
“None of my members have authorized me to release any specific information,” Janet Stover, CEO of the Illinois Association of Rehabilitation Facilities, tells me.
All I was trying to find out was how the state budget impasse was impacting or about to impact thousands of social services groups and providers, but I couldn’t find a straight, simple answer.
Catholic Charities of the Archdiocese of Chicago, for instance, revealed that it had already closed two shelters and two child development centers and laid off about 40 people. But asked when, specifically, it would get really bad, a spokeswoman only would say they would re-evaluate at the end of the summer.
“There could be a time when we suspend services if the negotiations last months, but we are not at that point yet,” Des Plaines-based Lutheran Social Services of Illinois says in a statement.
All of these nonprofits rely heavily on state funding. So you’d think they would want to get the word out about the coming meltdown.
It turns out, quite a few of these providers are flat-out scared to death about their very existence.
A document issued in June by the Springfield-based rehabilitation association shows us why.
Go read the rest before commenting, please. Thanks.
- Tournaround Agenda - Monday, Aug 3, 15 @ 9:37 am:
What a competitive and compassionate state we’re becoming.
- Phil - Monday, Aug 3, 15 @ 9:43 am:
And with state workers, the school districts, and Medicaid providers all getting paid, there will be only scraps left for these folks when and if a budget agreement is ever reached.
- Paul Reverse - Monday, Aug 3, 15 @ 9:44 am:
I hate to say it, until a larger portion of the private sector middle class is impacted by the budget morass, I don’t see social service providers in chaos as the pressure point sufficient to budge Rauner or Madigan.
Can Higher Education serve as a pressure point? Maybe students dropping out of college because of a lack of MAP grants will cause a stir? The private sector middle class, because of inflation, cost shifts, wage stagnation and looming tax spikes in Illinois, don’t seem all that interested in helping others but instead seem to be focused on taking care of themselves.
How about the U of I’s football team not being able to play on opening day? That’s something that could provide a bad jolt on national news…
- Norseman - Monday, Aug 3, 15 @ 9:44 am:
This is really sad for people in need. However, Rauner circles are rejoicing at the idea of nonprofits falling by the wayside. The Gov has already questioned the number of providers out there. They’ll care more as the heat increases from the horror stories about the lack of services.
- Deep South - Monday, Aug 3, 15 @ 9:46 am:
===How about the U of I’s football team not being able to play on opening day? ===
That might be a good thing!
- Nobody important - Monday, Aug 3, 15 @ 9:49 am:
Decades of Madigan led, democrat over-spending are coming home to roost. Reality is inescapable. The State simply can not keep spending money it does not have. Cuts are necessary and enevitible. Call it whatever you want, but this is the place where decades of democrat super majorities have driven us - off the cliff.
- Paul Reverse - Monday, Aug 3, 15 @ 9:53 am:
NI - For the sake of argument, let’s assume you are correct (this is a massive assumption).
The Democrats have agreed to and proposed cutting the budget. It’s Rauner and the Republicans that refuse to agree to them AND have proposed no alternative.
- Anon221 - Monday, Aug 3, 15 @ 9:56 am:
Then, please, Nobody, take one of the budgets that has been submitted and pretend you are the Gov with a line item veto. Show us the cuts! Broad-based, repetitive language will not solve this problem.
- Mister Whipple - Monday, Aug 3, 15 @ 9:58 am:
The pressure point of social service organizations potentially failing is going to place more pressure on the Democratic House and Senate members than on Republicans. That’s not lost on the Rauner administration which figures the screaming is going to get louder and more intense, thereby upping the pressure on the Democrats and increasing the chance they’ll make some concessions. That’s part of the second floor game plan.
Rich hit the nail on the head regarding the need for providers to retain their workforces. If human service providers start talking shut down, the workers will scatter to more secure jobs. So providers are, for the most part, laying low, about layoff and shutdown plans going forward.
And the financial pressure will be growing. Most providers are being paid in July and August for the services they did in the last quarter of FY15. But, by September, the state flow of FY15 dollars will end and the providers that don’t have reserves, significant sources of revenue other than the State of Illinois or available lines of credit will be at death’s door.
- Precinct Captain - Monday, Aug 3, 15 @ 9:58 am:
==- Nobody important - Monday, Aug 3, 15 @ 9:49 am:==
The state doesn’t have the money because Rauner didn’t want the revenue. Say what you want about Pat Quinn as governor, but the fact is that the outstanding bills were being paid down, the budgets were balanced, the pension payments were made, and millions of dollars were cut from workers compensation costs and Medicaid.
- Mason born - Monday, Aug 3, 15 @ 9:58 am:
While we can’t do much about the two titanic egos may I suggest we give what we can to help. I know it won’t be enough but every little bit counts. Now if you’ll excuse me I have a check to write.
- VanillaMan - Monday, Aug 3, 15 @ 10:00 am:
This is the kind of shaking up of government that few would have voted for if Bruce Rauner had been honest during the 2014 campaign.
It is market-based and believes in competition. It believes in seeing people as customers and consumers, not as citizens. If someone cannot pay for what they get - they get cut. If someone cannot justify what they are paid - they get cut. It doesn’t matter if as a citizen, you have any rights, beyond what your wallet can buy.
I find it striking that of all states, Illinois has a governor who thinks that our state should be operated like a discount department store that refuses Link Cards and refuses to pay the help. To think that Illinois has a Wal-Mart government would be as odd as discovering that Mercedes-Benz has decided to cash out and begin hawking Thigh-Masters to raise money for coffee.
Rauner got rich doing this, but it is no way to run a government - let alone a state as important, wealthy and vital as ours.
Market-based ethics is an oxymoron, not a governing strategy.
- VanillaMan - Monday, Aug 3, 15 @ 10:08 am:
Call it whatever you want, but this is the place where decades of democrat super majorities have driven us - off the cliff.
Governors are not supposed to play chicken, raising a competitor towards a cliff. Governors are supposed to remember that they do not ride alone - they ride with the state’s future riding with them. Believing that going off a cliff is a strategy, or even threatening to do so, is chaos, not governing.
No governor should feel it necessary to turn constituents into hostages, budgets into death threats, or have aides turning General Assembly hearings into a Marx Brothers routine.
This isn’t governing. Rauner is damaging Illinois, but seems only focused on politics.
- Rich Miller - Monday, Aug 3, 15 @ 10:09 am:
===Decades of Madigan led, democrat over-spending===
And that rhetoric gets us to a solution… how?
- Ben Franklin - Monday, Aug 3, 15 @ 10:09 am:
Funny thing is, it was the wealthiest Americans who asked FDR to step in to help the poor, because they got tired of being asked for help. Now it’s the wealthiest that are tired of paying a pittance in taxes that’s used to help the poor. What’s going to Happen?
- Anonymous - Monday, Aug 3, 15 @ 10:09 am:
When the agencies that serve people with mental illnesses, developmental disabilities, or other disabilities have to discontinue services, there is a domino effect.
First, people who are living in residential programs have to live somewhere. If they were capable of doing for themselves, they wouldn’t be in that program. Telling them that their families must take them back isn’t going to work. Many have no families. Many families will simply say “no”. So, where do they go?
In 1979, a large residential program for individual with developmental disabilities called North Aurora Center shut down with virtually no notice. I don’t recall what the state agency was called at that time, but the equivalent of DHS had to scare up enough staff from state facilities to manpower the center during the couple of months that it took to move all of those individuals into other residential programs and state facilities. That was for two to three hundred people.
Imagine a couple of thousand.
The state no longer has the manpower to take over a North Aurora Center. It certainly can’t take on thousands of individuals. Unless the governor is planning on scraping together the emergency funds to keep the agencies in crisis going for another month or two, Illinois will have the kind of human services crisis that will not only harm those receiving services and the staff who work with them, but the community and families that surround them.
You want to be on the evening news? This is one way to do and not in a good way.
- Anon221 - Monday, Aug 3, 15 @ 10:11 am:
In regards to the U of I football team threads: http://iamtheifund.com/about.html
If the IFund is providing $10.7 million to 500 student athletes, that figures to only $21400/student. That does not even cover the cost of in-state tuition (http://www.collegedata.com/cs/data/college/college_pg03_tmpl.jhtml?schoolId=982). So… cuts to MAP and other student services will probably cut into certain student athlete supports- maybe not football…
- Oswego Willy - Monday, Aug 3, 15 @ 10:14 am:
===Call it whatever you want, but this is the place where decades of democrat super majorities have driven us - off the cliff.===
Then Rauner will one that he feels the poor should be thrown off the cliff first to save you.
- Oswego Willy - Monday, Aug 3, 15 @ 10:15 am:
“Then Rauner will own that he feels the poor should be thrown off the cliff first to save you.”
- UIC Guy - Monday, Aug 3, 15 @ 10:15 am:
@PC, 9:58
Yes! Quinn, for all his faults, is looking better and better.
- Rod - Monday, Aug 3, 15 @ 10:20 am:
I work for a not for profit, I advocated for an immediate layoff ( including for myself ) once the state stopped making payments. Like most of the other not for profits we elected to use up our reserves to keep people working. Even if the state does compensate us for these services once this is over I believe the choice made by most not for profits wth reserves was the wrong one.
I believe the not for profits were afraid of bad PR if they immediately laid of staff and held on to reserves. It’s an unfortunate situation we all find ourselves in now and we may very well still have to layoff people.
- Wordslinger - Monday, Aug 3, 15 @ 10:20 am:
Perhaps the governor can explain to Archbishop Cupich and other providers why 80% of the budget rates but their work does not?
Why they have to shut down shelters and lay off workers while the governor holds tneir funding hostage to a union-busting agenda that he’s too scared of to even talk about in public?
Perhaps the governor owes everyone an explanation as to how his silent agenda to reduce wages for anyone he can swing a stick at is an “economic-growth” strategy?
Since corporate profits are at record highs, while wages have been stagnant or in decline for years, that strategy seems rather counter-intuitive, considering that consumer spending is the main driver of economic growth.
Rauner doesn’t have an economic-growth agenda, he has a partisan political agenda to kill unions.
If he had an economic growth agenda, he’d be pushing a capital bill — a proven way for the the state to boost employment and build infrastructure for growth — rather than hiding his political agenda behind an obtuse dorm-room economic ideology.
- Anonymous - Monday, Aug 3, 15 @ 10:21 am:
Rauner is a great example of why money should be barred in politics. We’re dealing with another Nixon- one that financially extorts people if he doesn’t get his way. Bankrupt providers who provide for those who need it the most.
- Juvenal - Monday, Aug 3, 15 @ 10:40 am:
While Rich mentions some big names, it is the smaller, community-based nonprofits that are largely non-unionized and more likely to be minority led that will be forced to close their doors first.
For them, I think it is probably already too late.
What will be interesting is when the organizations like Mrs. Rauners and their peers, particularly organizations whose facilities are graced with names like Rauner, Pritzker, Crown…start to realize that the edifices to their philanthropic generosity are about to sit vacant.
Because here’s the thing: once these programs close, they aren’t reopening. Once these organizations become financially destabilized, they cannot merge.
And if I were them, i would not wait to send the lay-off notices.
Your staff reads the papers: they are already job-hunting, and as soon as they find something, they are leaving anyway.
- Nickname#2 - Monday, Aug 3, 15 @ 10:40 am:
Overspending has been possible because of the pension underfunding. Both parties “borrowed” funds that should have been saved to pay for pensions that had been guaranteed, but instead they chose to spend that money to benefit Illinois taxpayers. Now, the taxpayers are being asked by both parties to blame the state employees they borrowed from, and cut the payments they agreed to make.
If you spend your kids’ college education fund on a trip to Hawaii, one of three things has to happen. Either you get another job and increase revenue; you cut way back on your other spending; or your kids don’t get an education. I suppose a reasonable family would discuss ways to increase revenue, cut costs, and perhaps even save on education expenses, but this clearly isn’t Leave it to Beaver.
- Allen D - Monday, Aug 3, 15 @ 10:44 am:
== Decades of Madigan led, democrat over-spending are coming home to roost. Reality is inescapable. The State simply can not keep spending money it does not have. Cuts are necessary and enevitible. Call it whatever you want, but this is the place where decades of democrat super majorities have driven us - off the cliff. ==
You got that right Nobody important
- Anonymous - Monday, Aug 3, 15 @ 10:46 am:
unfortunately the social service agencies are political pawn for democrats, they use them for tax increase, in reality these agencies are fully paid they are in delays. where are all the past tax increase funds?. Unless there is a fundamental change in the state, there is no point of increasing tax, these agencies are not going to paid fully.
- Oswego Willy - Monday, Aug 3, 15 @ 10:46 am:
- Allen D -
Explain away Edgar and Geo. Ryan with Madigan…
- Anonymous - Monday, Aug 3, 15 @ 10:47 am:
sorry the agencies are not fully paid
- Oswego Willy - Monday, Aug 3, 15 @ 10:49 am:
” - Anonymous - ”
Have you seen the “books” of every single social service agency? How do you know?
===… Unless there is a fundamental change…===
That’s an old Raunbot Talking Point. Are you on the new mailing list?
- ZC - Monday, Aug 3, 15 @ 10:51 am:
Nobody Important 9:49 am actually has it half right (or 40% right, whatever). Maybe that’s part of the huge standoff in this state right now. The Republicans deeply feel, in their gut, that Madigan is primarily responsible for this fiscal mess, and thus that they ought to get the first right to try something new.
That’s the sort-of-correct part. I’ve long thought if you had to pin the tail on the fault-donkey somewhere, it had to go on Madigan. I suspect this will become common wisdom when he finally steps down and thus is no longer in a position of power
(see: Daley, Chicago’s current mess).
Unfortunately where NI goes off the rails is then a partisan-colored glass interpretation: it’s Madigan’s fault, Madigan’s a Democrat, therefore the problem must be overspending.
Madigan’s great failure is that to preserve and protect his majorities, he took advantage of IL being a fundamentally rich state to keep the taxation way lower than its retirement needs and predictable pension problems now demand. Basically the secret the Tribune and Rauner don’t want you to know is that IL for decades has been a good state to be rich in, taxation-wise. Still basically is. Yes, we’re not TX nor FL, but we don’t have a lake of oil nor a sea of retirees pulling in billions in federal Medicare / SS dollars. IL has been even better to be rich and retired in. The sales tax is riddled with exemptions that benefit the uber-wealthy and the property tax is the best alternative because at least it keeps the money in the local communities.
In other words the 3% flat income tax should have phased up years ago, or (better yet) been made progressive. But that would have threatened Madigan’s majorities in the suburbs, so he hemmed and hawed and blamed the governors for inaction and foisted off the inertia on them. A bunch of service providers getting hit (to return to the original thread) is going to cause a lot of pain out there, but it’s not going to lose Madigan his statehouse majorities. Tax hikes to help those not-for-profits, might.
Maybe he couldn’t have succeeded, but his primary fault is he never really tried. I’m not a statehouse historian so if someone wants to challenge this last point, I’m open to it, but I don’t see it.
So part of the critique is fundamentally fair. Unfortunately the righteous solution now proposed by Rauner and his ilk is in the exact wrong direction.
- nldev - Monday, Aug 3, 15 @ 10:52 am:
willy
I have one agency
- Bushwacker - Monday, Aug 3, 15 @ 10:53 am:
The State Fair starts in about a week. How will it be paid for without a budget? How will all the high $ entertainment be paid…….with a IOU? They get paid in full before the show or they never take the stage! Will a adult in the room please stand up? We are the laughing stock of the nation! One more thing……please include a ERI so I can retire, move and never tell anyone I am from Illiinois!
- ZC - Monday, Aug 3, 15 @ 10:54 am:
>> Overspending has been possible because of the pension underfunding. Both parties “borrowed” funds that should have been saved to pay for pensions that had been guaranteed, but instead they chose to spend that money to benefit Illinois taxpayers.
Sorry for all the long posts, I promise this is the last one for a while, but it’s also got to be said: the alternative to “borrowing” of course would have included lower pay raises, lower promised benefits and possibly less hiring for state union employees back when.
So they raise holy hell now, but if the state of IL had done the responsible thing and not borrowed back when, I -strongly- suspect a lot of the unions would have screaming murder then: “Give us our raises!”
Part of the problem in other words is the older union members threw their younger up-and-comers under the fiscal bus. Not consciously mind, but it came to the same thing.
- Precinct Captain - Monday, Aug 3, 15 @ 10:55 am:
==- Anonymous - Monday, Aug 3, 15 @ 10:46 am:==
==where are all the past tax increase funds?==
They didn’t go in a savings account. They went to outstanding bills and to making the pension payments. The tax increase is over. Try to keep up.
- Cassandra - Monday, Aug 3, 15 @ 10:55 am:
Given the folks they serve, is there some way that social service providers could become less dependent on state funding. If you are a disabled child, why should the help you receive in Ohio be different from in Illinois or in California and so forth. If I were a social services think tank, I think that’s the area I’d be researching and advocating in. Stable funding unconnected to the vagaries of state politics, and the vagaries of (bad) state fiscal management, of course.
- Rod - Monday, Aug 3, 15 @ 10:57 am:
I think what Anonymous as attempting to say was that the not for profits are fully paid eventually even with delays. Agreeing to a contract with the State is an incredibly complex issue because a not for profit which provides mental health services or day programs for seniors with Alzheimer’s can not exactly diversify.
So the State really is the sole contractual entity for many not for profits. This gives DHS for example huge leverage in contractual negotiations and leads to these not for profits effectively taking bad deals to stay in the game and hope to make up the loss with private fund raising.
- Langhorne - Monday, Aug 3, 15 @ 11:02 am:
The response from ms stover surprises me. If you dont want to be provider specific, for fear of panicking staff, fine. But she could have given a broad comment to reinforce the scope and urgency of the situation. She was specific earlier.
Did the rauner folks tell nfps to zip it? Crisis=leverage. But the admin has been doing everything it can to feign normalcy–school funds, pay employees, ongoing negotiations w afscme,
fund big chunks of the budget, etc. it baffles me. The train wreck is coming.
- nldev - Monday, Aug 3, 15 @ 11:02 am:
Cassandra
YOU ARE RIGHT, TAKE FUNDING AWAY FROM THE POLITICIANS, State should use Federal Funds marked for social services only use for social programs, State of Illinois use them as general Fund, They should STOP that and fund the programs
- Robert the Bruce - Monday, Aug 3, 15 @ 11:02 am:
Excellent column!
And both sides still may not be talking. Sad.
- dzipio - Monday, Aug 3, 15 @ 11:09 am:
I have been out of town for a while. Forgive my ignorance, but what is the status of the temporary budget extension? Will Rauner veto it as he has threatened? Will the GA override?
- Paul Reverse - Monday, Aug 3, 15 @ 11:29 am:
Anon221: Are University employees State Employees for purposes of pay in this period without a budget?
i.e. are University employees gonna get paid when classes start?
- Logic not emotion - Monday, Aug 3, 15 @ 11:34 am:
Social service / human service agencies have already been laying off staff, reducing service hours and dropping programs due to the state fiscal situation (not just the current; but years of chronic underfunding / reductions). As a previous poster noted, many have decided to use whatever reserves they have in hopes of mitigating the impact; but doing so will likely result in some agency closures if a budget isn’t arrived at soon.
- Wordslinger - Monday, Aug 3, 15 @ 11:36 am:
– The state simply can not keep spending money it does not have.–
What a brilliant insight, but, sadly, it does not apply here. You obviously havent been paying attention, for months.
This is a hostage situation, not a policy decision.
The governor has made very clear, for months, that if he gets his political agenda he will raise taxes and restore much spending.
But he’s in a box now, where 80% of the budget is funded and there are very few hostages left.
- PolPal56 - Monday, Aug 3, 15 @ 11:45 am:
Universities are okay for a while. Tuition influx in August.
- Anon221 - Monday, Aug 3, 15 @ 11:49 am:
Paul-
These articles refer only to pay raises/merit and staffing for 2015/16:
http://www.chicagobusiness.com/article/20150729/NEWS13/150729795/university-of-illinois-pay-raises-on-hold-pending-state-budget
http://www.news-gazette.com/news/local/2015-07-28/killeen-defers-salary-program-until-state-budget-settled.html
I would imagine that there will be employees who are working off of grants/soft monies that will probably be laid off or let go. If you get paid probably depends on where your money originates.
- PolPal56 - Monday, Aug 3, 15 @ 11:50 am:
I guess that’s the upside of the GA’s defunding of public higher education in IL
- PolPal56 - Monday, Aug 3, 15 @ 11:53 am:
Now, that is entirely separate from financial aid - I have no idea if MAP or the Illinois Veterans Grant is funded. Those are out of state funds, not university funds.
- Cassandra - Monday, Aug 3, 15 @ 11:59 am:
Is partial funding available without a budget to get agencies through the end of the year.Sure, it might not be “legal,” but who’s gonna sue?
Maybe this is our future. The concept of an “annual budget” changes radically. It’s not written in the sky, after all.
- Montrose - Monday, Aug 3, 15 @ 12:03 pm:
“It’s a hostage situation.” Wordslinger nailed it.
- Formerly Known As... - Monday, Aug 3, 15 @ 12:03 pm:
==Broad-based, repetitive language will not solve this problem==
Bingo.
Neither have done their jobs here. The Gov is supposed to introduce a balanced budget and the GA
- Formerly Known As... - Monday, Aug 3, 15 @ 12:05 pm:
==Broad-based, repetitive language will not solve this problem==
Bingo.
Neither have done their jobs here. The Gov is supposed to introduce a balanced budget and the GA is supposed to pass a balanced budget. Both have failed.
- Formerly Known As... - Monday, Aug 3, 15 @ 12:05 pm:
With the GA doing so for the second consecutive year.
- Robert the Bruce - Monday, Aug 3, 15 @ 12:07 pm:
How’d the U of I end up in this comment thread? $1.5B endowment; they’ll find a way to keep the lights on for a bit.
Social service providers, not so much.
- PolPal56 - Monday, Aug 3, 15 @ 12:20 pm:
Robert the Bruce, because of state level financial aid to students.
- Anon221 - Monday, Aug 3, 15 @ 12:22 pm:
I was just responding to Paul Revere’s question, but there are grants that NGOs have staffers working on in cooperation with universities such as the U of I. Rauner has potentially been incredibly careless ( to put it nicely) in screwing up funding programs that have federal matching dollars and/or are multi-year in nature by freezing programs and cutting funds. This is just a for instance of some of the work done at the U of I:
http://socialwork.illinois.edu/research/research-center/
- Anon221 - Monday, Aug 3, 15 @ 12:26 pm:
Actually, it started with the football season snark from Deep South at the top of this thread:)
- PolPal56 - Monday, Aug 3, 15 @ 12:33 pm:
Well, MAP was mentioned first and is of course a state wide issue. Certainly neither EIU nor WIU has a 1.5B endowment to help keep either afloat. The UofI snark was just a specific little illustration/jab. It would be interesting to see occur, though.
- PolPal56 - Monday, Aug 3, 15 @ 12:45 pm:
The university I checked with has heard nothing about IVG and is working from the assumption that those grants are funded.
- Facts are Stubborn Things - Monday, Aug 3, 15 @ 1:31 pm:
In a budget crisis, it is really difficult to leverage non budget items. MJM, has for weeks said the same thing over and over — the problem will be solved in moderation and not the extreme. The number one problem facing Illinois is the budget deficit. Non budget items have been acted on and we have met the Gov. half way on many issues that he has advocated for. Some of the Gov. issues go to the core of the legislature’s beliefs and will not be agreed to. We need cuts and revenue and I stand ready to work cooperatively and professionally. Name calling and non budget items do not help us solve problems in moderation, but rather move us to the extreme. When the heat really starts to get turned up, it will be the budget and not the non budget items that must be addressed. He who stands in the way of the budget because of non budget items will loose.
- Mama - Monday, Aug 3, 15 @ 4:55 pm:
- Bushwacker - Monday, Aug 3, 15 @ 10:53 am:
“One more thing……please include a ERI”
Bushwacker, there will never be another ERI because it is to expensive.
- Not quite a majority - Monday, Aug 3, 15 @ 6:58 pm:
PolPal56 @ 12:45
Illinois Veteran Grant is an entitlement program according to the AG’s office (this goes back about 3 decades). That means the college (or community college) has to provide the amount that isn’t funded by the state.