SPRINGFIELD – If Illinois enters a second year without a budget this week, cash will stop flowing to local 911 centers, preventive health screenings and tuition grants for low-income college students – and the situation will only get direr from there.
Not approving a new spending plan by the start of the new fiscal year Friday means schools won’t know whether they’ll stay open through the academic year, the state could lose billions in federal dollars for various programs, and vendors that have provided services without payments could file more lawsuits.
Entering a second fiscal year without a budget is unprecedented, so officials will have no road map for all the harmful situations Illinois could face.
“We are so cash-strapped these days, we need every dollar we have going to pay the critical services to the state, not in legal fees,” Illinois Comptroller Leslie Munger said.
Unprecedented or not, local lawmakers such as Rep. Mike Tryon, R-Crystal Lake, said disaster awaits if the lack of a budget proceeds much longer.
“It’s a dangerous place to be when you don’t have a budget and you’re an agency depending on those appropriations,” Tryon said.
With the clock ticking, lawmakers are scheduled to be in Springfield on Wednesday to discuss a Democratic-backed plan to fund schools for another year and a partial budget that would get the state to January, but Republican Gov. Bruce Rauner already has said he disagrees with key pieces of their plan. Rauner has proposed his own plan, but it is unlikely to be considered.
State Rep. David McSweeney, R-Barrington Hills, said he opposes a stopgap spending measure, and wants a full-year budget that reforms pensions, Medicaid and does not include a tax increase.
“A stopgap plan will only make the problem worse,” McSweeney said.
A full-year state budget will remain elusive because Rauner, a businessman elected in 2014, and Democratic leaders who have long controlled the General Assembly are at odds over the governor’s demands for business-friendly, union-weakening laws as a condition for agreeing to a spending plan that would include a tax increase.
Here’s a look at what Illinois will face:
Public schools may have about a month before knowing whether they can open on time for the 2016-17 academic year. This includes Chicago Public Schools, with about 400,000 students.
Education funding is the only portion of the budget for the current year that Rauner approved, so schools have largely been spared the consequences of the impasse. But if lawmakers and the governor fail to approve a new education budget soon, schools will be at risk of closing or will have to use rainy- day funds to open.
Not every district will have enough money reserves to open, and even the ones that do may not be able to operate for a full year.
“Frankly, this may be the sort of crisis that does force the issue (to a resolution),” said David Yepsen, director of the Paul Simon Public Policy Institute at Southern Illinois University – Carbondale.
Illinois typically sends the first payment to schools Aug. 10, Munger said. But she said there must be a budget at least a few days before then to make the payments on time.
Lawmakers and the governor agreed in December to release $3.1 billion in one-time funds for local governments that rely on the state for funding services such as 911 call centers and domestic violence shelters. But come Friday, those payments will stop.
Without a budget, the state will be losing out on $5.4 billion in federal pass-through dollars for public health services, cancer screenings and home-delivered meals for seniors, according to the comptroller’s office. The state will get that money only if lawmakers authorize spending.
Much of the spending for the current year has been on autopilot because of court orders for critical services such as Medicaid payments and state workers’ salaries. While that’s expected to continue, there’s some spending lawmakers approved during the budget standoff that will have to be reauthorized.
The status of cash-strapped public colleges and universities may depend on how fast they spent last year’s emergency funds.
The schools received short-term funding when Rauner and legislators approved $600 million in April. That included nearly $170 million in tuition grants for low-income students.
But that money was only a fraction of the normal higher education budget and it was meant as a lifeline for colleges and universities to make it to the fall. Without a budget, there won’t be any additional money.
Before getting the emergency money, higher education institutions had been without funding since last July 1, prompting layoffs and, in the case of Chicago State University, the possibility of closing altogether. CSU was in such dire straits by the time the funding came through that it still laid off more than 300 employees.
MONEY OWED TO SOCIAL SERVICES
If there’s no spending authority, Munger said, the only recourse for social service agencies, utilities and other state vendors awaiting payment will be to sue the state. The state already faces one lawsuit demanding the immediate payment of $130 million to 82 service providers, including one run by Diana Rauner, the governor’s wife.
Some social service agencies have received money this year because of the court orders against the state. But many others have been barely operating without state aid.
Last week, the United Way of Illinois released a survey of 429 agencies that have contracts with the state that showed nearly two-thirds have had to cut programs because they haven’t been paid, affecting nearly 1 million people. These agencies provide a range of services, including mental health treatment, childhood education and substance abuse help.
If they go another six months without funding, more than half of the agencies said they’ll have to stop serving clients.
“This is just nonsense. We’re devastating the state for self-made reasons,” said Chicago Democratic Sen. Heather Steans, one of the lawmakers trying to negotiate a budget.
• Northwest Herald Reporter Kevin Craver contributed to this story.