Illinois Budget Delay Causes Layoffs and Lapses Even as Money Reappears

April 30, 2016; Chicago Tribune

Sometimes, the organizational damage caused by delayed payments doesn’t end when the money reappears. Even after an infusion of $20.1 million in emergency funding from the state of Illinois last week, Chicago State University laid off more than 300 non-faculty employees effective April 30^th. Other publicly-funded higher education institutions received funds as part of larger legislation that was overwhelmingly passed by the state legislature.

Chicago State went almost an entire school year without receiving the state funding it needs and relied upon to operate. In February, more than 900 employees were notified that they might soon be without jobs if the state budget did not pass. While not all 900 felt the impact, the emergency funds provided were still not enough to prevent layoffs entirely. Some employees may be called back if the operations gap is too great. The school decided to end the semester two weeks early to ensure that students slated to graduate could do so. Faculty members are now on alert until May 15^th, which is when faculty annual contracts expire.

Other higher education institutions affected by the state budget impasse are Northeastern Illinois University, which has laid off 65 non-instructional employees, and Western Illinois University, which cut 147 positions including some that were faculty positions. In addition, five hundred Western Illinois University employees are taking furloughs and pay cuts this spring as a preventive measure against further layoffs.

Those additional layoffs may be unavoidable, as Illinois has already gone ten months without a budget and there’s no end in sight.  Nonprofit Quarterly reported that, as of March, Illinois is now the only state without a budget for the 2015-2016 fiscal year. This continued budget impasse has public K–12 school administrators eagerly watching to see if they will be able to operate for the next school year. It is estimated that about 15 percent of the public school districts in Illinois have less than 90 days of operating expenses in reserves.

Illinois is also one of the worst-ranked states in regard to how much money per student is sent to school districts. This is a larger issue in the more rural areas, which have fewer economic development opportunities and less high-demand property that can command a high price (and therefore bring in larger tax revenue). School districts in more developed areas can better absorb that deficit by relying on other tax revenues.

Nonprofit Quarterly has been watching the impact of the budget impasse on not only institutions of higher education, but also nonprofit organizations that provide services to Illinois residents. In March, Catholic Charities of Chicago urged parishioners to contact their legislators to remind them that the lack of state funding was handicapping their ability to provide services to Illinois citizens in need. And in February, Nonprofit Quarterly reported the following reductions in social services because of the standoff:

• Lutheran Social Services reduced staff and closed programs.
• The closure of six drug and alcohol rehabilitation programs.
• The closure of mental health counseling programs in six different neighborhoods.
• The end of a respite program for veterans and their families.
• The closure of a statewide, state-funded program that works to break the school-to-prison “pipeline.”

It looks like providing affordable higher education, and perhaps K-12 education, may soon be added to this list of service reductions.—Kelley Malcolm