The first installment of my three-part Stateline series “Behind on Bills” focuses on how after-school programs, domestic violence shelters and other social service providers are coping with Illinois’ inability to pay its bills on time. In some cases, they must wait half a year or more to get paid for work they have already done.
Service providers, vendors, universities and others who do business with the state are struggling to stay open, let alone plan for the future, in an environment where they never know when their next check will arrive from Springfield. Many have resorted to layoffs or letting their own bills go unpaid, trickling the economic impact down to businesses that have no direct connection to the state.
During the recession and its aftermath, of course, almost every state has had to make deep budget cuts, and those cuts have taken a toll on services. What Illinois is experiencing is different. The turmoil at the Youth Service Project is not a result of policy choices made by political leaders to cut back on youth violence prevention. Rather, it’s a result of choices they haven’t made. By failing to balance revenues with expenditures, lawmakers have turned their budget problem into a cash-flow problem, pushing decisions of how to spread the state’s fiscal pain to the governor’s budget office, which prioritizes payments, and to state Comptroller Dan Hynes, who writes the checks.
The state’s huge pile of unpaid bills doesn’t show up as borrowing on its balance sheet, but that’s essentially what it is. Illinois pays only minimal interest for late payments, and that money comes well after it cuts checks to its vendors, service providers, universities and school districts. So the state is essentially taking out low-interest loans from groups like the Youth Service Project. Martin-Ocasio says the arrangement with the state basically makes contractors “involuntary lenders.”
This goes far beyond an accounting problem. It means cuts in services to Illinoisans who rely on them.
In the suburb of Elgin, the Community Crisis Center reduced its staff from 72 people to 62. The group relies on volunteer work from former staffers to help victims of domestic violence and sexual assault, along with homeless people. Stress is high for the remaining staff, because of lengthy furloughs and increased workloads, says executive director Gretchen Vapnar. “Some of my staff are making $26,000 a year, and they have to give up a month of salary,” she says.
Long delays in state payments create a snowball effect that makes the job of Family Rescue, the Community Crisis Center and other related organizations even harder. The nature of the safety net is that many programs are tied together and only work if all the pieces are in place. When Family Rescue (which runs a domestic violence shelter) tries to move a woman and her children out of a shelter to a more stable setting, the agency relies on other nonprofits to provide medical services or job training to help the family along. But the other agencies are strapped for cash too, laying off staff and reducing services while they wait for their own payments from Springfield to come through.
Lawmakers passed a major tax increase in early 2011, but that money hardly put a dent in the stack of unpaid bills, because it was needed elsewhere. The Associated Press and other news organizations ran a series called “Deadbeat Illinois” in the fall of 2011 confirming that many of the same problems Stateline documented a year earlier remain very real.