Costs & Consequences Of Illinois' Budget Crisis

by Tyler Durden

Jun 7, 2017 7:45 PM

 Authored by Kevin Hoffman via RebootIllinois.com,

Illinois has been operating without a state budget for two years.

In that time, the state’s credit rating has been downgraded eight times, the backlog of unpaid bills has surpassed $14.5 billion, more than 1,500 employees at public universities and community colleges have been laid off, and countless social service providers are struggling to keep their doors open as they wait up to seven months to receive payment from the state.

And now that Gov. Bruce Rauner and the Democratic-controlled Legislature have failed to reach a budget agreement for the third consecutive fiscal year, the costs and consequences of this unprecedented partisan gridlock are going to get significantly worse.


Statewide problems:

• Illinois owes school districts more than $1.1 billion in categorical payments for special education, transportation, bilingual and early childhood services.
• Illinois’ backlog of unpaid bills stood at record $14.5 billion as of May 31, according to Comptroller Susana Mendoza.
• The state’s Medicaid managed care organizations are owed $2 billion.
• An estimated $31 million in investment income has been lost due to the budget battle, according to state Treasurer Michael Frerichs.
• Centerstone, a non-profit behavioral health organization that helps 16,000 clients in southern Illinois and the metro-east region, has shuttered offices and cut services amid the budget impasse, affecting 700 clients and 39 staff members throughout the state.
• The Wells Center, a drug treatment facility in downstate Jacksonville that has been operating for 50 years, was forced to shut down operations because of the budget impasse.
• Illinois’ unpaid bill backlog could hit $25 billion by FY 2019 if the state continues without a budget.
• Students and parents are looking to out-of-state colleges due to the unstable climate within Illinois’ higher education system.
• More than 1,500 employees have been laid off at public universities and community colleges throughout the state.
• A United Way survey of 75 southern Illinois human services agencies that receive state funding reported 88 percent cut the number of clients they serve, and nearly half were forced to make cuts to programs, services and/or operations due to the Illinois budget deadlock.
• Redeploy Illinois — a statewide program focused on decreasing the number of juveniles in prison — has seen 24 counties drop out of the program entirely. Additionally, 15,000 at-risk youth could lose access to Teen REACH after-school programs without a full-year budget.
• Small businesses in Illinois are owed millions from the state in unpaid contract work and many have had to cut staff and reduce hiring.
• Lutheran Social Services of Illinois (LSSI) stopped 30 services and eliminated 750 jobs throughout the state. Approximately 4,700 people no longer will be receiving services from LSSI.
• Without a budget for the FY 2018, nearly 100,000 people who receive community and home-based services through the state’s 13 area agencies on aging will be affected and 846 full-time jobs will be lost, according to Joy Paeth, CEO of AgeSmart Community Resources and president of the Illinois Association of Area Agencies on Aging.
• Twelve different organization have dropped out of Community Care Program contracts with the state since July 1, 2016, according to the Illinois Department of Aging. Another 19 providers are facing “financial distress” because the state has not paid them what they’re owed.
• Police chiefs across the state warn that the Illinois budget impasse is putting more kids at risk for prison by eliminating key programs.
• Illinois paid a $53 million “penalty” when the state sold $480 million in general obligation bonds, according to an analysis from January 2016.
• As of May 2017, Illinois has paid more than $800 million in penalties for paying bills late.
• More than 1,000 Illinois college students did not return to school for their second semester during FY 2016 due to frozen grant funds.
• The state owes $174 million to more than 9,000 dentists across Illinois.
• Illinois owes $370 million in interest alone for state employee health care.
• Nearly 70 percent of social service agencies have received no payments or partial payments from the state in FY 2017, according to a March 2017 United Way survey.
• Illinois is on the hook for $18.6 million in reimbursements to Cook County for child support enforcement.
• Police training classes for more than 57,000 officers across the state have been canceled.
• While the state authorized the release of funds for domestic violence shelters at the end of 2015, the lack of funds to other social service providers continues to affect victims of domestic abuse.
• All 29 sexual assault survivor and prevention services, including rape crisis centers across Illinois, have instituted furloughs, facing layoffs, cutting services and closure due to insufficient funds from the state.
• The Illinois child care assistance program — which provides child care subsidies to low-income, working parents —  raised income eligibility requirements in July amid the budget impasse, threatening current low-income, working parents from being able to send their children to daycare. In November, lawmakers and Gov. Rauner eased income eligibility requirements, but the program is serving 47,000 fewer children and working families lost state financial assistance for childcare.
• Ninety percent of Illinois homeless social services have been forced to cut clients, staff and services.
• The methamphetamine treatment program for the Franklin County Juvenile Detention Center ended July 15, 2015. The program helped treat children in roughly 40 Illinois counties over the last nine years.
• In the last two years, Illinois has been downgraded by all three major credit rating agencies a total of eight times. Moody’s Investors Service and S&P Global Ratings lowered the state’s bond rating to one notch above “junk” status on June 1. All three rating agencies have a negative outlook for Illinois, which already had the nation’s worst credit rating, and has warned the state could face further downgrades in the coming months amid the ongoing budget impasse and mounting unpaid bill backlog.
• Five Illinois universities now have junk bonds.
• School superintendents across the state continue to warn that they could be forced to close their doors in the fall or not open at all without a full-year budget.
• There is a growing shortage of caregivers for Illinoisans with disabilities. Advocates warn the problem will continue to intensify if the state doesn’t appropriate enough funds to group home businesses so they can pay their  direct support professionals $15 an hour. The turnover rate is about 56 percent, up from 40 percent in FY 2016, according to the Chicago Tribune.
• Illinois experienced a net loss of 37,508 people between July 2015 and 2016 — the most of any state and the third straight year Illinois’ population has declined.