Rauner Administration Stirs Up Uncertainty By Scaling Back Social Service Funding

Following two years of tumult amid Illinois’ historic budget standoff, state funding for human service programs has become so unreliable some providers are now questioning if it might be wiser to forgo it entirely.

This story was published with Crain's Chicago Business.

Following two years of tumult amid Illinois’ historic budget standoff, state funding for human service programs has become so unreliable some providers are now questioning if it might be wiser to forgo it entirely.

Programs that aim to treat addiction, prevent homelessness, provide autism care and more have spent the past two years in fiscal suspense as a political tug-of-war over state resources played out between Republican Gov. Bruce Rauner and the Democratic-controlled General Assembly.

The latest pull came as agencies that get assistance from three-dozen state human service programs learned in recent weeks that Rauner had unilaterally decided to withhold some of the money promised them in the state budget lawmakers passed this summer over the governor’s veto.

"Providers are saying, 'I don't know if I can do this,’” said Nora Collins-Mandeville, public policy director of the Illinois Collaboration on Youth, an umbrella group of agencies that help at-risk youths. “They have to decide if they can manage the risk."

Many agencies have already run up credit lines, laid off staff and dramatically reduced the number of people they serve. In some cases, faced with no way to make ends meet at multiple points over the past few years, some providers have even been forced to close their doors in clients’ faces, which, “goes against every fiber of why agencies do what they do,” Collins-Mandeville said.

Rauner’s administration has outlined to Democratic lawmakers $89 million in spending reductions spread across 36 social service programs, one key lawmaker told the Better Government Association. The Rauner administration has confirmed some, but not all, of those cuts, arguing they are needed because the budget approved in July is badly out of balance.

The administration has characterized the cuts as modest, but a BGA analysis shows they vary widely in size, with state funding for one West Side crisis intervention program slashed by 66 percent from what lawmakers budgeted. State cash has been eliminated entirely for other programs.

Rauner has previously targeted many of the same human service programs for funding reductions or elimination. Though there are exceptions, the governor is not legally required to spend as much on programs as lawmakers authorize.

Illinois Coalition for Immigrant and Refugee Rights Program Director Breandán Magee called the seven percent cut to state funding for immigrant integration services an “arbitrary decision” and said he was surprised when he learned programs that rely on it would not be receiving the full amount lawmakers promised.

“Every penny counts in this environment,” he said. “Any cuts will have a deep impact on the communities that we serve.”

Magee said providers in his network use that funding to help immigrants access government services and find a pathway to citizenship. Those funds were reduced by approximately $445,000.

Other agencies affiliated with ICIRR also make use of state dollars from one of a handful of programs the administration is zeroing out completely. Budgeted at $1.5 million by lawmakers, that program is aimed at helping recent immigrants tap into state resources through neighborhood-based centers.

Services that support teens took some of the hardest hits under Rauner’s reductions, with funding for afterschool programs, youth employment and services that divert youth from detention centers making up three of the five largest percentage reductions to programs that will continue to receive direct state funding.

Under the Democrats’ budget, these programs were set to receive more than $43 million. They are now in line to get just over $28 million, a 35 percent reduction.

While service providers do receive financial support from other sources, unpredictable state funding jeopardizes those resources as well. Some private foundations who supplement state dollars have decided to pull out amid the budget chaos, Collins-Mandeville said, because they don’t want to throw good money after bad as agencies discover mid-stream they will no longer be able to continue offering certain services.

In his two previous budget plans, the governor has proposed eliminating nearly half of the social service programs that are now the focus of the most recent cuts.

Many well-known programs were also slashed in his 2015 call for $26 million in cuts to social service and public health grants, a move that became known in government circles as the “Good Friday Massacre.” Those funds were later restored when the administration reported higher-than-expected tax revenue.

Claiming the budget lawmakers handed him is $1.7 billion out of balance, Rauner has repeatedly said he is looking for areas to cut spending without offering many details.

Illinois Rep. Greg Harris. Photo: Illinois General Assembly

Two months after lawmakers approved their budget in July over his veto, the governor’s administration announced it would begin issuing contracts to providers--but at reduced rates, in some cases. The reductions come as part of larger cuts the office is making to state agencies, according to state Rep. Greg Harris, a Chicago Democrat and one of the budget’s lead architects.

Harris said last week that in addition to the $89 million reduction for the Illinois Department of Human Services, the administration informed him it will be reducing the Department of Transportation’s budget by $86 million. The Department of Commerce and Economic Opportunity is going to lose $41 million and the Department of Agriculture is set to see its budget slashed by $21 million, he said.

Meghan Powers, a spokesperson for the state human services agency, said in an email that dedicated funding for six DHS programs was eliminated because the services they provide are either already available through other channels or will be covered by department operations and would continue without disruption.

Asked to explain why certain social service programs were selected for reductions over others and at varying rates, Powers said that reductions were part of the administration’s strategy to balance the budget. She did not offer specifics.

However, the total saved by Rauner’s social service cuts won’t result in much of an overall impact. Indeed, the reductions account for less than three percent of the department’s general  budget of $3.9 billion. In all, the administration is eliminating 16 percent of the more than $560 million lawmakers set aside for these service programs, according to documents Harris says he received from the administration.

As the state’s chief executive officer, the governor holds wide latitude over how he chooses to fund government programs.

“The Legislature sets the upper limits on what the governor can spend,” said Charles N. Wheeler III, a state government expert at the University of Illinois Springfield. “But he doesn’t have to spend all of it unless there’s something in statute that requires it to be spent.”

Despite Rauner’s reductions, some social service providers told the BGA they are glad to now at least have a sense of clarity about how much they stand to receive this year.

These organizations say they faced considerable difficulties planning for the future over the past several years as programs were halted and restarted when funding disappeared or resumed.

“We haven’t been operating at a steady level anyway, so we’re just really thankful to be getting what we’re getting at this point,” said Jodi Ogilvy, a spokesperson for The Hope Institute in Springfield, which, along with 18 partners, utilizes state funds to provide behavioral therapy and other support services to individuals with autism. The network was forced to halt some services this summer while awaiting notice that funding would resume.

In March, United Way of Illinois, a community service advocacy group, released a survey of 463 community providers offering a snapshot of the havoc inconsistent funding has wreaked.

Nearly half of responding organizations reported reducing the number of clients served along with resorting to relying on cash reserves and not filling vacant positions following the expiration of a temporary spending plan that ran through the last half of 2016. At the time the survey was conducted, the state owed human service agencies $213 million for services provided.

But providers said social services have been chronically underfunded for years, long before the state began failing to pay its bills on time.

Judith Gethner, who directs Illinois Partners for Human Service, a statewide coalition representing more than 800 social service providers, said the constant conversations about slashing salaries at organizations within her network over the last several years have dampened morale and made it difficult to retain employees.

She said the decline in support for their organizations began after the 2008 recession when social service programs and the individuals that rely on them became an easy target for cuts by lawmakers and governors alike.

“We don't have unions, we don't have PACs,” she said. “We don't have all the other things that other industries have to be able to fund elections and we don't turn out to vote in the numbers that teachers or road workers do.”

About the Author

Kiannah Sepeda-Miller

Kiannah Sepeda-Miller is a reporter with the Better Government Association's investigative team. Prior to joining the BGA, she covered state government for The Associated Press while earning her master's in public affairs reporting from the University of Illinois at Springfield in 2017. She also holds a B.A. in sociology from Knox College in Galesburg, Illinois.