Nonprofit Fallout as Illinois Budget Persists in Failure to Launch

February 15, 2017; NBC Chicago, “Ward Room”

Beginning the second year of Republican Governor Bruce Rauner’s first term, Illinois remains without a budget. The feud between Rauner and the Democratic majorities of both houses of the state legislature gives the state the unique status of attempting to govern without a state budget, to the delight of headline writers and columnists.

As NPQ has previously reported, the budget impasse pits a governor who sees the long-term financial problems of the state as the result of a weak business environment, over-regulatory government, and too-powerful labor unions against a legislative leadership that sees the issue as one of too little revenue, particularly from corporations and wealthy individuals alongside a need for modest programmatic reform. Because of court orders and agreements to fund K-12 education and some level of social services, the entire state has not shut down.

Less visible than the political infighting is the harm being done by the standoff to the lives of Illinois citizens and to the nonprofit infrastructure that was formed to provide much the State’s social service programs. As is recounted on the website of State Senator Daniel Biss (D-Evanston), the cumulative impact of the standoff has mounted, month by month:

  • Lutheran Social Services of Illinois, the state’s largest social service provider, announced mass program closures and layoffs because of the stalemate.
  • 55,000 fewer children of low-income working parents were able to take advantage of the state’s Child Care Assistance Program because Rauner slashed funding for the program.
  • More than $1.1 billion was cut from higher education funding for state universities and community colleges—a more than 70 percent reduction in state support.
  • State payments to K-12 schools for transportation, special education and free and reduced-price lunches were delayed by months, causing a ripple effect for staff and families in districts across the state.
  • Illinois’s bill backlog climbed to $11 billion.

There’s some irony in the notion that while President Trump rails against the purported carnage in Chicago’s streets, the state has not been able to fund several successful antiviolence programs, including Operation Cease Fire and Redeploy Illinois. Of Operation Cease Fire, which was “featured in a documentary that brought national attention to Chicago’s violence,” NBC Chicago recently noted that it “deployed former gang members and felons to intervene in feuds in hopes of preventing shootings and murders. Supporters of the program say cutting it contributed to an increase in violence in Chicago, which saw more than 700 murders last year.” For lack of a budget, the killings continue to grow.

If a lack of a budget makes it difficult for the state to write checks legally, not having enough money in the bank means that even when it can start to do so, it must wait for funds. The state’s accumulated deficit in its current accounts is $11 billion, while the annual state budget in FY 2017 was about $73.5 billion, including federal support. Nonprofits that have been fortunate enough to have valid agreements with the state must deliver the promised services and then wait months and months for the state’s check to arrive. This situation has become so bad that a number of organizations are now suing the state for monies owed:

Dozens of nonprofit organizations that provide Illinois social services are stepping up their legal battle over a lack of payment during the impasse. The groups, which help homeless people, victims of sexual assault, foster children and the elderly, have filed a second lawsuit over the state’s alleged failure to honor contracts, after the Illinois Supreme Court declined to intervene last year. The organizations have claimed they’re owed over $160 million and there has been “irreparable injury” from a lack of timely payments, including layoffs and program cuts.

Ironically, one of the organizations suing the state is the Ounce of Prevention Fund, which is led by Diana Rauner, the governor’s wife.

Each time we have returned to this story, we have ended with the hope that the human pain it is causing will result in politicians giving up their battles in order to stop the hurt they inflict. What will it take to unlock a government that is so solidly stuck?—Martin Levine