A standing room only crowd packed the Parasol Room at the Morton Civic Center on April 26 to hear members of a panel put together by State Senator Daniel Biss speak on a topic titled, “Illinois on the Brink: A Discussion of the State’s Budget Impasse and Consequences.”
The State is still operating without a budget this year, and it has hit higher education and human services particularly hard. Last week, the Legislature and the Governor were able to come to an agreement to put about $600 million toward higher education to stave off the shut down of several colleges in the State, but they have not yet approved funding for critical human services.
Mark Weiner, president and CEO of CJE Senior Life, spoke about the impact the budget impasse is having on his organization, which serves 23,000 older adults. He said CJE assists the elderly by helping them live as independently as possible in their homes, and by providing a variety of services including personal care, transportation, home-delivered meals, counseling, and adult day programs.
Mr. Weiner said CJE depends on the State for 22% of its funding, and that by June the State will be behind in payments totaling $480,000. “Our capacity to work in this area is highly jeopardized,” he said.
By June, the State will owe 826 organizations more than $400 million. “Some of us have closed, some of us are redefining our mission. We are suffering,” Mr. Weiner said.
As examples, he said Lutheran Social Services recently laid off 750 workers, 43% of its staff. As of last month, he said, the State owed Catholic Charities more than $25 million. “They are having serious conversations if they can continue.”
“A major consequence will be the loss of culturally and faith-based organizations,” Mr. Weiner said.
Bill Stafford, Vice President of the Board of Oakton Community College and CFO of School District 202, said the State owes Oakton $12.5 million, which is 7% of its budget. Under legislation enacted last week, Oakton will receive only $1.2 million. It is making cuts and increasing tuition to address the shortfall, he said.
Another major issue, Mr. Stafford said, is the State held up this year’s funding for MAP grants, which help pay the cost of tuition; and the funding for MAP grants for next year is uncertain. He said 1,100 Oakton students entitled to MAP grants this year did not receive any funding. He added that 10,000 students who live south of I-80 had to give up on going to college because there was no funding for their MAP grants. The funding package comes too late for many students.
Mr. Stafford added that this will have a long-term effect. “The perceived availability of State aid has a direct link to the persistence of students finishing college,” he said.
In response to questions, Sen. Biss said the Senate passed a bill last week that authorized the State to spend $441 million on human services. He said the bill is pending before the House, but he did not know if the House would approve it, or if the Governor would sign it.
In answering how the budget impasse might be resolved, Sen. Biss said Governor Bruce Rauner is conditioning his approval of a budget on weakening union and worker rights. Sen. Biss framed his own dilemma. He said he thinks that collective bargaining rights, workers compensation laws, and prevailing wage laws were all critically important. “At what point should I say … I can’t take it anymore,” and that “we’ve got to cave to prevent damage to our elderly, to our mentally ill, to the environment, to our college students, to our institutions …
“What would it take to have enough urgency that I am willing to do that, I don’t know. … I look at making concessions [demanded by Gov. Rauner] as harming our basic economic system in a generational way.”
Mr. Weiner sharpened the dilemma saying, “We [CJE] have about 30 days before we start pulling the plug on programs. When we’re gone, there’s no going back. Once you close a program, you lay off staff, you lose your expertise. You can’t wake up and reopen a week later. It is gone.”
Sen Biss said he is hoping the State will approve $441 million in spending for human services within 30 days.
Therese McGuire, a professor of strategy at the Kellogg School of Management, Northwestern University, talked about tax policy and how uncertainty in a State’s policy decisions can negatively impact an economy.
She said the State’s projected revenues for this year are $6.6 billion less than the State’s spending last year. To make up that shortfall would require a tax increase of 1.5 percentage points, said Sen. Biss.
Dr. McGuire said she thought the most effective economic development play for states today is: 1) Devise a clear and credible path to pay off their debt; 2) Devise a clear and credible path for not taking on new debt unless it is associated with capital projects; and 3) Reform their tax system to raise sufficient revenues so they can adequately support the functions of government that are most important to a vibrant economy, which is first, development of human capital, education, health care, and public safety, and second, provision of infrastructure, effective transportation systems, and protection of the environment.