Thursday, December 17, 2009

Human services providers seek cash flow

By Jamey Dunn

With five months in unpaid bills and some agencies predicting they will be unable to make payroll January 1, social service providers are asking the state to take out another loan.

Earlier this month, Gov. Pat Quinn proposed borrowing $500 million to help catch up on the state’s back bills and keep human service organizations afloat. $250 million would go toward Medicaid payments, which Quinn claims will result in $600 million in matching federal funds.

Organization directors say they have exhausted the money Illinois pays them to administer programs under contract, such as caring for the elderly, homeless and developmentally disabled. Many are now running on credit and paying interest that they say is actually the state’s responsibility.

“Just from a strictly business perspective, it is a cash flow issue. We have bills. We have people on payroll, we have light bills, we have insurance payments, we have pension payments, we have every sort of expenditure anybody in the business world would understand,” said Steve Roach, executive director for Catholic Charities in Springfield. “If you don’t have revenue coming in, sooner of later you’re not going to be able to pay those bills.”

As the debate over borrowing unfolded, Moody’s Investors Services downgraded Illinois’ bond rating to the second lowest in the country, just above California. That means that interest rates on potential loans would probably not be ideal. Illinois already borrowed $2.25 billion, due at the end of the fiscal year in June, to keep the budget limping along in lieu of finding a new revenue source.. If the state borrowed the $500 million, it would be tacked onto that bill.

The fate of Quinn’s proposal cannot be removed from the context of an election year. For the plan to go ahead, the governor, comptroller and treasurer, all of whom are currently running for office, have to sign off.

Comptroller Dan Hynes, Quinn’s opponent in the Democratic primary, has refused to approve the plan. Hynes spokeswoman Carol Knowles said the comptroller is opposed to the idea because the state is already so deep in debt. She said Quinn has been vague and noncommittal on the details of the plan since he announced it and has not provided any details on how to distribute the remaining $250 million that would not go to Medicaid.

Knowles denied that politics played a part in Hynes’ decision. “The comptroller has been made out to be the bad guy … but he honestly thinks this is a bad idea,” she said.

Human service providers accused the comptroller’s office of bending to media and political influences when doling out checks. “There are priorities for picking and choosing for paying, and those priorities are … based on media attention or legislative muscle,” said Don Moss, coordinator of the Illinois Human Services Coalition. “This is not a way to run the system. We need everybody to get paid on time.”

The comptroller’s office denies any special favors are being given. “I’d like to see them provide an example of that. The fact of the matter is that we reach out and work with providers all across the state everyday — all day long,” Knowles said.

Knowles added that many of the groups crying foul are getting some of their money, just not all of it. “Entities such as these receive more $50 million every month and have been consistently since the beginning of the fiscal year through an expedited payment program,” she said. “Their claims about special treatment are not valid, but their concerns about not being paid are valid.”

The comptroller’s office gets several thousand calls a week about unpaid bills to providers, but Knowles said they only deal directly with the organizations or the agencies that contracted them. “Do legislators call us and ask for payments to be expedited? Yes, they do. Do we expedite them? No, we don’t.”

Treasurer Alexi Giannoulias, Democratic candidate for U.S. Senate, has refused to take a side in the issue. Spokesman Scott Burnham said that the treasurer is open to discussing a short-term borrowing plan, but since Hynes is opposed, it is a “moot point.”

Meanwhile, social service providers are hoping to find some sort of relief and fast. They are worried they will not be able to offer shelter to those in need as the weather outside turns colder. They also are concerned for their employees who, according to Moss, “face hard work every day knowing that their payroll might not be there in two weeks.”


Patrick Yeagle said...

Great story!

Maybe if we're lucky, we'll be annexed by another state that knows how to craft a budget.

James said...

Nice Post !

Thanks for sharing all these useful information with us !


school of social work is my education place.