Illinois News

Some agencies still recovering from Illinois budget crisis a year after it ended

Illinois state Rep. Steve Andersson, R-Geneva, center, shakes hands with Illinois Speaker of the House Michael Madigan, D-Chicago, right, after the Illinois House voted to override Gov. Rauner's veto and pass a budget for the first time in two years during an overtime session at the Illinois State Capitol on Thursday, July 6, 2017, in Springfield. | The State Journal-Register via AP
By Herald-Whig
Posted: Jul. 13, 2018 10:00 pm Updated: Jul. 13, 2018 11:09 pm

QUINCY -- One year after Illinois ended the longest state budget impasse in modern history, most agencies and grant recipients are doing better.

But some problems remain. Many service providers are just starting on the road to recovery. A few won't recover.

"Illinois is on a long road to recovery, but it is making significant strides to repay its debts to state agencies and other service providers," said state Sen. Jil Tracy, R-Quincy.

FISCAL SNAPSHOTS

JULY 2017
Backlog of unpaid bills – $15 billion.
Credit rating – BBB-, one notch above “junk” status.

JULY 2018
Backlog of unpaid bills – $6.4 billion.
Credit rating – BBB-.

Josh Welker, dean of business services at John Wood Community College, said the state owed the school $919,000 when the budget became law in July 2017, breaking the multiyear stalemate. Those overdue funds have been received, along with $1.1 million for the fiscal 2018 allocation.

JWCC President Mike Elbe said that while he appreciates the state and local legislators' support for the budget deal, he's concerned that college allocations are "substantially below" what had been allocated before the budget impasse.

"The college was allocated $2,087,079 in fiscal year 2015 and has been allocated $1,124,820 for fiscal year 2019," Elbe said.

When Illinois first set up the community college system, the state was expected to cover 33 percent of the costs. Now the state is covering just 7.5 percent, Elbe said.

 

Big improvement

For Blessing Hospital, the budget crisis caused long delays in being repaid for medical services.

Tim Moore, vice president of finance and chief accounting officer at Blessing Corporate Services, said that in June 2016, the state owed Blessing Hospital nearly $13 million for Medicaid clients and $27 million for payment on state employees who had received medical treatment.

Now the state's Medicaid bills are down to about $6.5 million and state employee insurance bills total about $18 million.

"A year ago they were 215 days out on (Medicaid) payments. Right now they're only a little more than 107 days out. It's a big improvement," Moore said.

Other hospitals faced similar delays in payments before the budget deal was approved with a veto override.

State lawmakers point out that the state has come a long way in the last year. Illinois owed $15 billion in overdue bills a year ago. That backlog is now down to $6.4 billion, according to the comptroller's office. But the state's unfunded pension liability still hovers around $130 billion, and the budget is not truly balanced.

There also was a cost to the budget resolution. The state's personal income tax rate rose to 4.95 percent from 3.75 percent. Corporate income tax was increased to 7 percent from 5.25 percent. The tax hikes generate about $5 billion more a year.

State Rep. Randy Frese, R-Paloma, was among the lawmakers who urged his peers to reduce the income tax rate this year. When it became apparent there were not enough votes to reset the income tax to its previous level, Frese said a compromise bill called for a rollback to 4.75 percent with the hope for future rollbacks.

Over the past year, he said "social service agencies that have been burdened needed solid ground upon which to rebuild their organizations."

 

Degraded safety net

Transitions of Western Illinois was among the agencies that had to close down some programs during the budget impasse.

Executive Director Mark Schmitz said the homeless youth program was among many for which the state had no authority to contract for services.

"With the passage of a state budget and knowledge we will be paid if we provide services, we have now reinstated that program," Schmitz said.

But restarting a program is much harder than shutting one down. Many of the people who had worked with the program moved on to other jobs by the time it was revived. Transitions lost institutional knowledge and expertise that was not easy to replace.

"I think the biggest long-term impact of the budget impasse may be on the way it has degraded the social services safety net" in the state, Schmitz said

He saw substance abuse services and other programs across the state close down after decades of service.

"Doing business with the state has never been exactly easy, but the last few years has been much more of a challenge," Schmitz said. "Whatever your political stripe, our government needs to provide predictability in order to have the type of locally driven services there when people want and need them."

One example given by Schmitz was the Wells Center in Jacksonville. The drug and alcohol treatment program closed after 50 years in April 2017. Executive Director Bruce Carter said the lack of state funding forced the closure.

"The General Assembly recognizes the pain agencies have felt, and their ability to operate and serve Illinois' residents are an utmost priority," Tracy said.

She believes that the approval of a bipartisan budget this year will cut down on overspending and help the state pay down its backlog of debt more quickly.

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