ILLINOIS HAS A NEW BUDGET, BUT SOCIAL SERVICE ORGANIZATIONS STILL LACK STATE FUNDING

ILLINOIS HAS A NEW BUDGET, BUT SOCIAL SERVICE ORGANIZATIONS STILL LACK STATE FUNDING

By Christopher Shuttlesworth

Lawmakers in Illinois may have passed a new state budget after overriding Governor Bruce Rauner’s veto, but Lutheran Social Services of Illinois (LSSI), one of the largest statewide

nonprofit social service organizations, says it’s still paying a price for Illinois’ recent budget crisis.

The crisis took a toll on social service organizations like LSSI where today it still lacks state funding.

In trying to compensate for the state’s inability to pay unpaid bills for LSSI programs, LSSI Chief Executive Officer Mark Stutrud said in a 2016 press release that the organization was relying heavily on a bank line of credit as well as on the organization’s own resources.

During the crisis and without a budget, LSSI had to make vital program cuts and stopped providing services to 4,700 people so the organization could still offer most of its other

social service programs.

Barb Kraeger Hailey, who is the Director of Communications and Advancement at LSSI said the majority of the programs and staff cuts mainly affected senior homecare programs.

Hailey added the nonprofit social service organization was employing 1,700 people back in January, 2016, but was forced to cut 750 employees and 30 homecare programs. Still outstanding is $6 million dollars in state funding that remains owed to LSSI.

“We made those program cuts,” Hailey said. “It was very difficult to do that and it was a thorough and painful process. But we really had to look for what was there for the long-term health of the organization to be able to continue to provide the majority of the services that we provide.”

Hailey said since 2016, LSSI has restructured the

organization and has managed to employ 1,000 staff members to ensure that most of the mental health, foster-care and other programs remain in place. The majority of the programs that LSSI closed were directly linked to programs that weren’t receiving any money at all from the state.

Currently, Illinois’ unpaid bills are estimated to be at $15

billion, but Abdon Pallasch, director of communications for

Illinois Comptroller Susana Mendoza said the Governor’s Office of Management and Budget is planning to see how much of the potential $6 billion from the General Assembly’s FY18 budget will be borrowed to pay off Illinois’ bill backlog and millions of dollars still owed to nonprofit organizations like LSSI.

The override vote for the state budget passed on a 71-42

vote with 61 Democrats and 10 Republicans all voting in favor of the new budget on July 6.

The budget package increases the personal income tax

rate from 3.75% to 4.95%, and the corporate income tax rate

from 5.25% to 7%. The new tax levels are estimated to increase revenues by $4.8 billion per year.

But in a released statement, Governor Bruce Rainer said,

“This budget puts Illinois on track for major future tax increases and will lead us to becoming the highest taxed state in America in the coming years.

“The package of legislation doesn’t balance out the budget

and failed to address Illinois’ fiscal and economic crisis,” Rauner added, This will, “make it worse in the long run,” he said. “It does not make nearly sufficient spending reductions, does not pay down our debt, and holds schools hostage to force a Chicago bailout.

“The state budget will never be balanced or stay balanced

unless its economy grows faster than its government spending,” he continued.

Illinois took a similar tax-hike-without-reform approach in

2011 and by 2015, state revenues were up $13 billion, according to Illinois Policy Institute’s website. But 60 percent of the state revenue was consumed by $6 billion in pension costs and $1 billion in state employee insurance cost. This ultimately forced newly appointed Governor Bruce Rauner and Illinois House Speaker Michael Madigan to approve $1.3 billion in fund sweeps and $300 million in cuts to education, social services and other programs.

Illinois Policy Institute Chief Executive Officer John

Tillman said Madigan’s current budget plan and nearly $5 billion tax hike still continues the same policies that created the present crisis.

“The budget lacks any material reforms to the state’s out-of control spending, which is the root cause of the long-simmering crisis,” Tillman said. “It has fake savings that will never materialize, while the tax hike will take $1,000 per year from the average Illinois household.”

A 2017 study conducted by Fabrizio, Lee & Associates

showed that 60 percent of Illinoisans believe that state taxes

are currently too high and 80 percent wanted Illinois state

lawmakers to pass major structural reforms before passing

any type of tax increase.

Illinois citizens are “fed up with elitists’ tax hikes, out-of control spending and poor governance,” Tillman said. “They

know that the legislators who passed this phony budget have

achieved nothing, except to make the lives and livelihoods of

ordinary Illinoisans more difficult, more expensive and more

burdensome.”

But Sam Salustro, who is the Illinois Communications

Director for the Democratic Governors Association said, “Illinois is definitely worse off under Rauner. Schools

are being short-changed, universities are on the brink of failure and social services are collapsing. Not only are people not getting services, but people are actually losing their jobs,” he said.

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