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Where the social service money goes may surprise you

Monday, May 23, 2016

* Greg Hinz

A new report (scroll down to read) I’ve obtained exclusively from the Illinois Partners for Human Services says agencies serving the disabled, elderly, poor and others collectively are responsible for $3.1 billion a year in direct spending and $1.4 billion in secondary spending. They employ 3.5 percent of the state’s workforce, roughly 169,000 people; and generate $597 million annually in state and local taxes. […]

What’s really fascinating, though, is that such spending, proportionally, tends to be concentrated not so much in Chicago and nearby suburbs, but in rural Downstate areas… Human service workers make up 2.9 percent of the workforce in Cook County but 4.3 percent in Gallatin County, 5.3 percent in Hardin County, 3.9 percent in Johnson County and 4.8 percent in Lawrence County, for instance.

And by Senate district, just five of the top 20 areas ranked by the economic impact of social service spending are located in Chicago, with six having Republicans serving as their senator. Among those is the district of Senate GOP Leader Christine Radogno of Lamont, ranked 13th, with $73 million of such spending a year and 3,311 employees.

The full report is here.

* Meanwhile, remember last week when we discussed the human service groups’ messaging campaign?

We are having far more success with our messaging about honoring contracts, and that paying people for the work they have done under legal contracts is just good business. I get media calls every single day now, from print, broadcast, radio, local, statewide, even national media.

The message that people should be paid for work done under legal contracts is a sticky message, and a non-controversial one. It is even a conservative one, if you think about it. And it resonates with people.

* Well, Crain’s ran an editorial over the weekend entitled “Can we trust a state that blows off its contracts?”

Earlier this month, 64 social service nonprofits and for-profit companies that do business with the state of Illinois filed an unprecedented lawsuit against Gov. Bruce Rauner and the chiefs of six state agencies. They’re demanding what is rightfully theirs: prompt payment of more than $100 million owed them for services rendered, under contract, to the state’s least fortunate citizens over the past 10 months. […]

It’s time for the state to pay up, either by ending the long-running stalemate or by a judge’s order. A contract is the foundation of business. If the state can’t be trusted to do what it has promised, we all will face scarier consequences down the road.

It’s working.

- Posted by Rich Miller        

39 Comments
  1. - CCP Hostage - Monday, May 23, 16 @ 2:39 pm:

    –A contract is the foundation of business. If the state can’t be trusted to do what it has promised, we all will face scarier consequences down the road.–

    If the state gets away with forcing social services to work without pay, it’ll come for others next.


  2. - Formerly Known as Frenchie M - Monday, May 23, 16 @ 2:41 pm:

    Framing: exactly.

    Let’s see any conservative on the state or federal level try and double-talk their way out of honoring contracts. As if the successful performance of a contract is predicated on the moral compass of its parties or the function of those parties to society at large.

    That’s the frame. And that will win.


  3. - Norseman - Monday, May 23, 16 @ 2:41 pm:

    Whatever works!


  4. - JackD - Monday, May 23, 16 @ 2:48 pm:

    The state has delayed payment for services rendered to outside providers for such lengthy periods over the years that this situation hardly seems new. Perhaps the delay is longer now?


  5. - Cassandra - Monday, May 23, 16 @ 2:49 pm:

    If it is necessary to raise state income and sales taxes in order to honor these contracts, are the voters in these areas willing to support these increase? Which? By how much? Do media reps ever ask their callers these questions. After all, is there anybody who doesn’t think contracts should be honored in the abstract.That’s the easy part of the question. But how much more are you willing to pay?


  6. - Formerly Known as Frenchie M - Monday, May 23, 16 @ 2:53 pm:


    But how much more are you willing to pay?

    That’s nonsense. That question — that specific question — has nothing to do with contracts. That’s why a contract is called a contract. The terms aren’t optional once it’s signed.

    Okay, I signed a mortgage for 100K. But what am I willing to pay?

    Ten, twenty bucks a month? Will that do?


  7. - Pawn - Monday, May 23, 16 @ 3:02 pm:

    JackD. The question is not WHEN we will be paid. It is IF.


  8. - Earnest - Monday, May 23, 16 @ 3:12 pm:

    The numbers aren’t surprising. Smaller agencies, in smaller areas, have a huge economic impact. They are usually among the larger employers in their towns. They spend a lot in their community, which in turn, tends to support their services.

    Oh, and they help people who are in great need of it.

    Senator Radogno’s vision of a large-corporation social service system is ending some of these amazing places.


  9. - Cassandra - Monday, May 23, 16 @ 3:21 pm:

    Really? The terms aren’t optional? We aren’t paying now-you could say the terms have already been broken.

    Ever heard of a workout? What if some of the agencies were willing to take less now rather than wait. It might not be optional but it could be where we’re headed.


  10. - Huh? - Monday, May 23, 16 @ 3:22 pm:

    “After all, is there anybody who doesn’t think contracts should be honored in the abstract.”

    Um, the Illinois Supreme Court just ruled against AFSCME raises that Quinn gave them in a contract negotiation then reneged on because the GA didn’t provide an appropriation.


  11. - illinois manufacturer - Monday, May 23, 16 @ 3:22 pm:

    I tbink the Illinois Supreme court said it on pensiobs though i fear these contracts might have a subject to appropriation line …though we should have our credit rating dropped to default.


  12. - Anonymous - Monday, May 23, 16 @ 3:28 pm:

    Why should anyone with a contract with the State have to take a hair cut for services rendered?

    1.4% in his infinite what ever has decided to withhold approval of a budget because Madigan isn’t rolling over and gwnuflecting to 1.4% less than awesome political mandate.


  13. - Huh? - Monday, May 23, 16 @ 3:31 pm:

    3:28 was me.


  14. - Cassandra - Monday, May 23, 16 @ 3:36 pm:

    Sorry, I meant “it might not be optimal” not optional.

    Huh-still, I bet the Supremes,too, would say they believe contracts should be honored in the abstract. We all do. But real life is messy.


  15. - DuPage - Monday, May 23, 16 @ 4:02 pm:

    I can think of a lot of nursing home creditors who did not get paid.


  16. - Annonin' - Monday, May 23, 16 @ 4:03 pm:

    Hmmm
    So if Capt Fax has finally concluded the BigBrains cannot be trusted then it can only be a matter of moments before the epiphany on givin’ more tax dollars…let’s start the count down clock ….1000….999…998….997 (we said moments we did not say how many


  17. - Huh? - Monday, May 23, 16 @ 4:04 pm:

    Cassandra - The fact of the matter is the there was a contract that ILSC said didn’t have to be honored. Abstract be damned. If the State won’t honor the contract, what good is it to have a contract?

    What is to stop the ILSC from ruling in a similar manner with the human services lawsuit? There is no appropriation from the GA. Services have been provided and little payment for services rendered has been received.


  18. - Pawn - Monday, May 23, 16 @ 4:06 pm:

    Cassandra, your flip remark about real life being messy so trivializes this issue. We may have widespread destruction of social services in Illinois — social services that we all depend on to keep our workforce and communities safe, healthy, and educated. But the contracts issue is bigger than just human services — if our contracts aren’t valid, then no ones are valid. Nothing. is that the kind of place you want to live and do business?


  19. - CCP Hostage - Monday, May 23, 16 @ 4:09 pm:

    I’ll say it again–this is important to everyone in the state. Because if Illinois doesn’t have to honor its contracts with human services providers, they won’t have to honor any of their contracts. Contracts become meaningless, and the government has the power to do whatever it wants to do. Is this wise, especially in Illinois?


  20. - some doofus - Monday, May 23, 16 @ 4:10 pm:

    Did some mention contractual pension obligations?


  21. - illini97 - Monday, May 23, 16 @ 4:11 pm:

    Is invalidating contracts one of the proposed business reforms? Because I don’t see how that makes the State a better place for businesses to operate.


  22. - BobO - Monday, May 23, 16 @ 4:18 pm:

    Unemployment here is now at 6.3%. In June, 2015 it was at 5.8%. National comparisons: June 2015 5.3%, today-4.9%.

    LSSI laid off 700 and who knows how many other human services workers have been laid off statewide.

    You can deduce that the state budget impasse alone can account for the unemployment increase in Illinois during the current fiscal year.


  23. - stateandlake - Monday, May 23, 16 @ 4:31 pm:

    Earnest @312p — spot on! Loss of local institutions is having a cascading effect - and the most fragile of our older adults are the most affected by disrupted relationships. Not to mention that they are often the least equipped to advocate for themselves as the model shifts to one where to get needed services persistent, relentless self-advocacy is needed. If you lack the energy or skill set to speak up and frame your need properly, you will go without.


  24. - Pelonski - Monday, May 23, 16 @ 4:42 pm:

    “subject to appropriations” - Most state contracts contain this language, and according to the ILSC, that invalidates the terms of the contract when there is no appropriation.

    Since there is no contract until there is an appropriation, the real question isn’t whether we should be honoring the terms of the contract, but whether we should be allowing these vendors to perform services for the state when we know they may never get paid. In my view, these social service agencies have been seriously mislead by the governor and his agencies. They’ve been promising that these groups will get paid with no legal authority to back up that promise. I’m sure the audit finding at the Lottery is just one among hundreds of examples of how the governor is ignoring the laws.


  25. - Mister Whipple - Monday, May 23, 16 @ 4:51 pm:

    Pelonski is right. My agency provides services because the state chooses not to do it. We have a dozen or more contracts worth well into seven figures. We’ve done the work but the state can hide behind the “subject to appropriation” language.

    But the state has a “moral obligation” to pay these providers.

    Or at least that’s the publicly-stated position of none other than the Governor’s appointed Secretary of the Department of Human Services.


  26. - Honeybear - Monday, May 23, 16 @ 4:58 pm:

    WOW!!!!!!! I just got a minute to look at this report! Now that is great economic impact analysis! IDOR get your crap together and quit imputing trash numbers to get your desired outcome! You shot your credibility with that graduated income tax report! Learn from these guys!


  27. - Pelonski - Monday, May 23, 16 @ 4:59 pm:

    I agree the state has a moral obligation to pay its providers, and I would be willing to pay more in taxes for that to happen. My concern, however, is that the legislator and governor have a limited understanding of what qualifies as a “moral obligation”. I can easily see them shorting the providers with each blaming the other side.


  28. - Cassandra - Monday, May 23, 16 @ 5:38 pm:

    Don’t the vendors have some obligation to understand the contracts they are signing..or not, if the case may be.

    Is it clear that the governor and his staff misled the vendors, and, if so, what did they tell them that was misleading. Certainly the administration knew that there was a problem
    of insufficient funds in the state budget. So did the vendors, for that matter.

    Or was this simply a case of, on both sides, we’ve always done it this way and everybody always gets paid in the end. Of course, maybe they will.


  29. - VanillaMan - Monday, May 23, 16 @ 6:34 pm:

    Conservatives honor contract law. Rauner isn’t a conservative. Conservatives don’t act like he has.


  30. - RNUG - Monday, May 23, 16 @ 7:15 pm:

    Let’s be clear. The IL SC did not invalidate the contract re back pay. They said the back pay was owed … just not right now because there is no appropriation from which to pay it. All payroll right now is the result of court orders, not appropriations. The State is still on the hook to pay it once there are payroll appropriations.


  31. - Pelonski - Monday, May 23, 16 @ 7:25 pm:

    RNUG,

    I’m not sure that is correct. That was Justice Kilbride’s dissenting view, not the view of the total court:

    “I concur in parts I and II of the majority opinion. I disagree, however, with part
    III of the majority opinion. I would reverse the judgment of the appellate court and
    affirm the judgment of the circuit court. I would hold that the state employees’
    contractual rights to raises continues under the contract clause of the Illinois
    Constitution (Ill. Const. 1970, art. I, § 16), even if that obligation cannot
    immediately be enforced because of lack of appropriations, and that public policy
    strongly favors holding the State to its contractual obligations.”


  32. - 100 miles west - Monday, May 23, 16 @ 7:25 pm:

    Cassandra -in most cases human services vendors are required to sign contracts months before a new fiscal year. This current situation is so odd that no nfp board could have imagined it. Most every mission driven board would have taken a well reasoned position to keep providing services. It is going to get uglier too. Our local mental health agency just lost a psychiatrist and now 500 people have to find a place to get their medications. But hey, they can still get a fishing license or go see a band at the state fair.


  33. - fly on the wall - Monday, May 23, 16 @ 7:45 pm:

    Why no outcry from the same folks when under Quinn the State did not pay income tax refunds to Business Taxpayers for almost 2 years. Really no difference.


  34. - Pawn - Monday, May 23, 16 @ 8:24 pm:

    fly on the wall, clearly you have no understanding of what a contract is or does. It is not the same at all.


  35. - wordslinger - Monday, May 23, 16 @ 8:39 pm:

    –Conservatives honor contract law. Rauner isn’t a conservative. Conservatives don’t act like he has.–

    Indeed. Seems simple enough to me. The spin trying to disguise that obvious fact is pathetic.

    I’d add, the Crain’s edit board saw and commented early and often on the snake-oil the governor has been selling.

    They ain’t a bunch of Bolsheviks over there.

    They’re about real business people, you know, people who actually take risks, form capital to build things, create jobs, enrich the community.

    That ain’t Rauner.

    Remember during a campaign debate when Charles Thomas asked Rauner, directly, to name one company where he created jobs?

    He couldn’t do it. After a lifetime of work, he couldn’t name one.

    Rauner ain’t a businessman, he’s a bust-out artist, a bankruptcy scammer.

    And he’s brought that outlook and those skills to the governorship.

    And the Illinois Republican Party sheep follow him, without question.

    Trump and Rauner — ain’t it great to be in the party of Lincoln and Reagan?


  36. - @MisterJayEm - Tuesday, May 24, 16 @ 7:33 am:

    Cassandra,

    I don’t think that your argument — “you should have known that liars sometimes take things without paying for them” — will be a successful in court or with the public.

    – MrJM


  37. - Dr. X - Tuesday, May 24, 16 @ 8:23 am:

    Reframin’ will be easy for Bruce: “Taxpayers have a contract with the state to get cheaper services for less money….”

    Now followin’ a Constitution and presentin’ a balanced budget, that’s negotiable.

    Get Kent Gray on it.


  38. - Cassandra - Tuesday, May 24, 16 @ 8:24 am:

    Mr. JM

    I’m trying to understand the system here, since, as a member of the state’s shrinking middle class, I’ll no doubt end up paying disproportionately for the fix when it comes.

    What did the guv’s staff actually say to the vendors that was misleading. Did they outright lie or were they simply clueless.

    If vendors are required to sign-what-blank contracts? without knowing how much money they are going to get, is that standard best practice. Illinois has a history of such terrible governance, you have to wonder if state government is following best practices in contracting.


  39. - Fly On the Wall - Tuesday, May 24, 16 @ 5:38 pm:

    PAWN, clearly you have no faint of an idea of the tax laws in the state and the complete illegal practice this was. Why don’t we just seize your Bank Account and when the Government wants to return your money to you that is up to them. No difference. Spend some time in the back rooms in the Statehouse and this has been the common practices to hide the Budget problems for the last decade. And I know more about contract law than you do since EVERY contract written in the state has a clause that says “upon appropriation and budgeted funds available to pay for the services.” Thus no appropriated funds means the contract can’t be enforced. One on One contract law in Illinois State Contracts.


Sorry, comments for this post are now closed.


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