State of the State: Even Small Budget Cuts Hit Home in a Big Way
Centers for people with disabilities and many other community-based services have known for months that they were unlikely to receive as much state funding as they have in previous years.
But even a 10 percent to 20 percent reduction in funding can significantly alter their clients’ daily lives.
The need to curb spending became obvious in March, when Gov. Pat Quinn laid out a sobering view of Illinois’ fiscal constraints:?a national economic recession deepening a state budget deficit that he projected to reach $11.6 billion by next summer, not to mention a chronic backlog of unpaid bills. Since then, taxpayers, public employees and state contractors repeatedly have heard Quinn urge the need for “shared sacrifices” during these unprecedented times.
It became even clearer in July, when the governor’s proposed income tax hike failed in the General Assembly. The final budget deal now requires Quinn to cut an additional $1 billion from spending. He said then that he would spread the cuts to maximize the receipt of federal matching and stimulus funds, meaning he couldn’t cut from education or Medicaid because that would risk violating economic stimulus rules.
Quinn also said he would fund health-related initiatives that focused on disease prevention, as well as services that reduced demand for more expensive services later. His chief of staff, Jerry Stermer, adds that state and federal laws and court mandates further shape funding priorities.
This year, in particular, the federal stimulus rules limit the budgeteers’ options when deciding where to trim. But cuts from dinky parts of the budget aren’t enough to compensate for the nosedive in revenues. Scott Pattison, executive director of the National Association of State Budget Officers, says budgeteers are left with targeting the biggest pieces of the pie: health and human services, higher education or corrections.
“When you’re talking about the huge amounts — hundreds of millions of dollars, in some states billions of dollars — that you need to cut, you’ve got to go where the money is.”
In other words, when a budget crunch collides with an economic crisis, grant-funded programs for everyone from people with disabilities to needy college students tend to get squeezed.
Stermer takes issue with the argument that grant-funded services fall outside the state’s core function.
“It’s a false dichotomy to say those things managed directly by state and state employees are not in the same value range or in the same priority concept as those that are provided by community contracts or grants,” Stermer says. “A better approach is to focus on what are the outcomes that we want from our state investments.”
A good example is the state’s network of 23 centers for independent living, which provide personal assistants for people with severe disabilities so they can live in their homes rather than in nursing homes.
State grants started the program in the 1980s. The network also receives a grant through the Illinois Department of Human Services that pays for training and recruiting personal assistants, as well as legal support and training for the clients so they know how to manage their aides and protect their civil rights.
Quinn’s administration initially planned to “zero out” the training portion but continue to fund the personal assistants program. His office changed course after rallies throughout the state and several meetings with center leaders.
“These choices are throughout the state budget, but in this particular case, when we had an opportunity to listen more carefully to the representatives of these groups, many of them the actual consumers, the case was extremely persuasive,” Stermer says.
But the centers still will have to adjust because the administration is considering capping the amount of time personal assistants can work outside clients’ homes.
Mike Ervin, who is wheelchair-bound, is one consumer preparing for the worst.
“I’m capable of making my own decisions, and I can use my computer, but really, anything major I need help with.”
He typically has the aides come to his Chicago condominium nine hours a day. Because of the service, he is able to work as a freelance writer, a playwright and a community activist. He doesn’t get Medicaid or Social Security. He earns an income, pays state taxes and employs five people.
Reducing the amount of time his personal assistants could help him get around the community would drastically alter his daily routine.
He says lawmakers need to understand that “just because something is a state program doesn’t mean it’s bad or wasteful.”
But a reduction in hours is a lot better than where the budget cuts started in the spring. The centers had been told their general funding would be reduced by 50 percent, which later was changed to 10 percent. The elimination or reduction of the personal assistants training grant would be on top of that. Not knowing has been the most trying for the centers, says Ann Ford, executive director of the Illinois Network of Centers for Independent Living, based in Springfield. “It’s changed so many times, and there’s just a real kind of demoralized feeling right now because what they want to do is their jobs.”
Even with the grant funded at 80 percent of last year’s levels, Ford says centers, particularly in rural areas that don’t have private funding sources, will still have to reduce the hours that staff can work to the point where they no longer qualify for health benefits. They also might have to roll back their service areas to save money on transportation costs.
College students who rely on state assistance to pay tuition are also in limbo and serve as another example of a grant-funded service that significantly affects their lot in life.
The Illinois Student Assistance Commission, an independent state agency, administers the grants. This year’s budget reduced a portion of that funding from $440 million to about $200 million, mostly affecting the Monetary Award Program that offers need-based grants.
More than 138,000 low-income college students received the so-called MAP?grant this fall. But there’s no money left for the spring, says Andrew Davis, commission executive director.
He says, “Come January, the state’s need-based grant program will have run dry.”
At the same time, demand for the state assistance has increased as the recession drives up unemployment rates. Davis says the nearly 30 percent increase in demand is met by a 50 percent decrease in funding. “It obviously makes a train wreck.”
There is a chance during this month’s legislative veto session that the governor and legislative leaders could agree to find new revenue — possibly from a $1 increase on the sales tax on cigarettes — to fund the second semester of the grant.
One version of a cigarette tax increase advanced through the Senate last spring but stalled in the House. Stermer says if the cigarette tax doesn’t happen, the governor wants to pursue a revenue source that could quickly garner support from a majority of legislators. The goal is to get a vote this month so students know whether they’ll get assistance to enroll in classes come January.
“If we don’t make a decision this fall and we put it off until some time in 2010, then this whole thing becomes disrupted,”?Stermer says. “Kids and returning students are dropping out, our public and private universities having to cut back themselves, further unemployment, not a good thing in this time of economic crisis.”
Davis says he’s an optimist, but being confident would “certify me as a lunatic.”
“The tough part isn’t convincing it’s a good program. The tough part for them is in finding new money.”
He projects a larger deficit in the long run if the MAP?grant disappears in the short run.
“The state, ultimately, is in effect eating its seed corn because people who don’t graduate from college will not accept the jobs and take the jobs and qualify for the jobs that pay higher incomes, which earn the higher income tax” for state coffers.
The commission estimates that absent the second semester of MAP?grants, 45,000 students would take on extra debt to continue to attend college, another 45,000 would temporarily leave school with the intent to come back — while only some of them would — and the last third would drop out for good.
“You could be talking about derailing 75,000 students, permanently taking them out of the educational pipeline,” he says.
In addition to costing the state in future workforce and tax revenues, it also would cost colleges and universities tuition for each student not returning.
Lawmakers could restore the funding, and the recession could officially be over. But that doesn’t mean state and local revenue outlooks will catch up any time soon. Pattison of the National Association of State Budget Officers estimates that the lag time between when the economy recovers and when states recover could be at least another year or two.
Lawmakers might want to keep that in mind when drafting next year’s budget.
Regardless of how noble the intent to help people with disabilities protect their civil rights or help low-income students pursue college degrees, law- makers should avoid passing budgets that they know the state can’t afford. And if they can’t resist approving such budgets, they should remember the consequences of 2009-2010, when they couldn’t agree to generate enough revenue and, instead, forced the governor to make cuts so they wouldn’t have to. As a result, seemingly small reductions in funding will disrupt the daily lives of some of the most vulnerable citizens in this state.
When a budget crunch collides with an economic crisis, grant-funded programs for everyone from people with disabilities to needy college students tend to get squeezed.
More than 138,000 low-income college students received the so-called MAP?grant this fall. But there’s no money left for the spring.
Bethany Jaeger can be reached at email@example.com.
Illinois Issues, October 2009