M. Spencer Green, Associated Press
CHAMPAIGN, Ill. — Illinois lawmakers have found a way to whittle $1.3 billion from state government's massive backlog of unpaid bills, but it comes too late for The Counseling Center of Lake View.
The Chicago nonprofit, a mental health services provider, shut down at the end of April, waiting on about $200,000 in state money.
Anticipating an annual summer stall in the already-slow payments and eroded by years of cuts in state funding, Executive Director Sharon Kayser said the agency opted to close and find new places for 400 clients rather than continue to slowly fade away.
"It's really hard to put together a budget and run a business with that level of uncertainty. Payments, they typically stop around May and don't pick up again until September," she said Thursday as she tied up the center's loose ends. "It was only going to get worse."
Across Illinois, the now $8.5 billion backlog has become a fact of life for people doing business with the state. As The Associated Press reported in a series last fall, the state has turned to a deliberate policy of not paying billions of dollars in bills for months at a time, creating a cycle of hardship and sacrifice for residents and businesses helping the state carry out some of its most crucial tasks.
Public schools, as of late May, are waiting on $562 million, social services $329 million and Medicaid $944 million, according to the state Comptroller's Office. While the damage has been extreme for Illinoisans like Kayser, others have found ways to deal with what they call the new normal, such as service cuts and funding from other sources, including the federal government, private grants and donations.
Lawmakers' plan to trim the backlog this year reduced it by a relatively small slice — 15 percent. But shaving away even that small piece, if Gov. Pat Quinn signs off on the budget, would carry a cost. Some of the money comes from cuts in other areas, education among them.
"It's the first time that I can remember where education — elementary and secondary — took a hit," said Rep. Frank Mautino, a Democrat from Spring Valley. "Nothing in this budget is easy."
Any progress is good, said Kelly Kraft, a spokeswoman for Gov. Pat Quinn. "We feel that's a good start, yes," she said.
Kraft said Quinn's staff is now comparing the General Assembly's budget with the one the governor proposed months ago. She said he usually signs a new budget July 1.
Among the legislature's steps to address overdue bills before they adjourned their spring session on June 1:
— Cut spending on K-12 education by $210 million. The human services portion of the budget would lose $200 million and higher education spending would be cut by $113 million.
— As part of a $2.7 billion plan to prop up Medicaid, the state's health care system for the poor and disabled, a limit how many bills the state can put off to future years. The money that bill would provide if signed by Quinn, as expected, would hold the backlog where it is.
— Refinance some state bond debt. Mautino estimates the savings at about $50 million.
Kraft said Quinn hasn't made any decisions about whether he'll adjust the cuts in the proposed budget, but that virtually any cut will hurt someone.
"When you do put aside $1.3 billion for bills, there are going to be certain things, certain services, that people have relied on, that aren't going to be there," she said.
For service providers and vendors, the unpaid bills have meant not relying on the state for some time.
The umbrella group Illinois Partners for Human Service periodically surveys its 700 member agencies about the impact of late state payments. In the most recent survey, late last year, just under a third of the 169 agencies that responded had fired staff, 8 percent had skipped paying staff for some period and almost half had to borrow money.
The borrowing had kept many agencies operating at relatively healthy levels. But banks are now less willing to make loans, conscious that state money to pay them back doesn't arrive on time, Illinois Partners Executive Director Judith Gethner said.
Those that stay open struggle to pay their own vendors and suppliers — janitors, food-service companies and the like. And Gethner suspects her surveys don't tell the whole story. Many of the agencies in her organization likely keep their struggles secret.
"You've got to show solvency in order for (private) foundations to continue to fund you," she said.
Monroe County Human Support Services is waiting on about $800,000 in overdue state payments, but put away money when it could over the past few years for the periods when the state isn't paying at all. At the moment, Executive Director Robert Cole says the agency has a fairly healthy bank account, but credits local charities and other sources closer to home.
Services haven't been cut at Family Service of Champaign County, which has about 70 employees working with 12,000 people a year. But adapting to the backlog — $250,000 to $300,000 at any given time — is a daily chore, Executive Director Sheryl Bautch said.
"If somebody's computer dies, OK, now we look around for somebody who can donate a computer because we can't go out and buy a new one," she said, adding that her staff hasn't had a pay raise in three years.
Kayser said the 40-year-old Counseling Center of Lake View made similar sacrifices. She still owes staff money and is working without pay.
"You say, 'I'm not going to invest in my building this year. I'm not going to replace the systems that are outdated. I'm not going to hire new staff. We're not going to give cost of living increases," she said. "You (would) do those things because you think maybe things will change. But it doesn't change. ... There is no waiting it out."
Follow David Mercer on Twitter: http://twitter.com/DavidMercerAP
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