It’s my least favorite kind of story, one I’ve done far too many times over the years: Nonprofit human service agencies respond to state budget cuts.
You might think that this year, the story would be different. Didn’t the legislature pass a budget with no cuts in most areas?
It turns out to be just a slight twist on the same old story.
Unable or unwilling to take a vote extending the current income tax rate, and unable to pass a budget with deep cuts reflecting the resulting loss of $2 billion next fiscal year, House Speaker Michael Madigan shepherded through a budget with “flat funding.”
The budget uses “one-time stop-gap measures to avoid the immediate pain associated with the tax rate coming down,” said Martin Torres, policy director of the Latino Policy Forum. It moves money from dedicated funds to the operating funds, defers required payments like insurance premiums, and simply raises revenue projections — technical fixes that just create new problems down the road. And of course, if something isn’t done about the revenue gap, it grows to nearly $5 billion in the following fiscal year.
But for this year at least, they passed a budget without cuts, didn’t they?
“They say, ‘Oh, we’re not making cuts; we’re keep it at flat funding,'” said Maria Pesquiera, executive director of Mujeres Latinas en Accion, which runs domestic violence shelters and youth and family engagement programs. “But all of our costs are going up — utilities, insurance, everything.” Flat funding with rising costs means fewer resources for services.
On top of that, like many nonprofits with state contracts, Mujeres has repeatedly had to borrow from its line of credit in order to pay its bills when state payments were late. “Then we have to pay interest, and that’s an additional cost,” said Pesquiera.
And while the temporary tax increase was used to pay down the state’s backlog of bills to service providers — it’s now under $5 billion, about half what it was four years ago — with revenues dropping, payment delays are going to begin increasing again, said Larry Joseph, research director of Voices For Illinois Children. So borrowing costs will go up again for nonprofits.
Then consider flat funding for programs that have seen deep budget cuts over recent years. Like other service providers, “we’re still getting less than we were in 2008,” said Pasquieira. “Every year we’ve had additional cuts. Now we’re bare bones and we’re chipping at the bones.”
While the state’s hard costs including debt service and pension payments have risen, Illinois has sharply reduced spending on public services since the recession hit five years ago. According to the Center for Tax and Budget Accountability, since 2009 the state has reduced spending — mainly on education and human services — by $4.7 billion.
For agencies in the Latino community, these cuts have been even more challenging because they’ve come while the population they serve has increased. While the state’s Latino population has grown by 33 percent over the past decade, “the state budget has continually fallen short in funding programs and services at a rate necessary to keep pace with our burgeoning population,” according to a statement calling for extending the current income tax rate, issued last month by the Illinois Latino Agenda and signed by the leaders of 27 Latino organizations.
“We know that as far as state investment in the Latino community — grants to Latino-led and Latino-serving organizations — there’s been a decrease in homelessness prevention, immigration integration, domestic violence and youth services,” said Torres. “These are all critical needs for Latino communities.”
Flat funding in this year’s budget just compounds the problem. “With the Latino community growing so quickly in Illinois, flat funding is really a decrease,” said Michael Rodriguez, executive director of Enlace Chicago, a community development group in Little Village.
I didn’t discuss politics with these sources, all of whom focus on policy and programs, but let me close with an observation and a question of my own.
Speaker Madigan’s district is 60 percent Latino. How well is he representing the interests of his constituents?