State Government

McHenry County agencies could feel pain in protracted Illinois budget fight

Pioneer Center for Human Services, like most Illinois social-service agencies, has become used to late or shorted state reimbursement payments.

But with Illinois officially operating without a complete budget as of midnight Wednesday, McHenry County’s largest social service agency, like other entities reliant on state funding, are in something of an uncharted territory.

Almost three-fourths of McHenry-based Pioneer Center’s $20 million annual budget to serve those with mental and developmental disabilities comes from the state, Chief Financial Officer Jeff Kurth said. If the budget battle gets drawn out into weeks or longer, the agency and others like it will start to feel it.

“This is a really weird situation … I’ve been here 16 years and this is the least information we’ve ever had going into a fiscal year,” Kurth said.

Republican Gov. Bruce Rauner last month vetoed all but the education portion of the $36 billion 2016 budget passed by the Democratic-dominated General Assembly – the spending plan is unbalanced by between $3 billion and $4 billion. Rauner, who points out that the Illinois Constitution has a balanced-budget mandate, wants to link Democratic wants and needs to reforms he ran on last year to help fix a state in economic crisis. Illinois’ $110-billion unfunded public pension liability is the worst in the nation, Illinois has the lowest credit rating of all 50 states, and the state is habitually behind in paying its bills.

Democratic lawmakers were working Wednesday to pass a $2.3-billion, one month temporary budget to keep certain “essential” services funded, but Rauner said he will veto any stopgap budget.

He used his veto pen early Wednesday morning to nix state lawmakers’ 2-percent raises included in the budget – Illinois lawmakers’ salaries vary between $68,000 and $95,000, depending on responsibilities, not counting per diem and mileage expenses.

Without either a temporary or permanent budget in place, Comptroller Leslie Geissler Munger has said that most payments handled by the office will cease, from paychecks for state workers to reimbursement for hospitals, vendors and other groups. About 65,000 state employees may not collect their paychecks in mid-July should the impasse continue, which has raised fears of a partial government shutdown if unpaid workers choose not to come to work.

But not all entities that receive money from the state will feel a pinch. Local governments, for example, will still get their shares of state income, sales, motor fuel, and other taxes, which are not tied to the state budget or appropriations. On the other hand, governments that receive funding for social service programs will see that money stop without a spending plan in place.

“The state may shut down, but city hall is not going to be affected,” Crystal Lake Finance Director George Koczwara said.

As for Pioneer Center, it has not felt immediate pain because it is still receiving payments from the state for the 2015 state fiscal year that ended June 30 – the state still owes Pioneer about $3 million, Kurth said. While he said he is hopeful that the state’s 2016 contracts that Pioneer signed will be retroactively paid once a budget is approved, it would be a more serious matter if the state did not pay its obligations in full.

Pioneer center employs about 400 and serves at least 4,000 clients a year.

“The contracts could be completely changed and we would have no say in it. We could be getting paid for the services we are providing, or we may not. We’re assuming we will,” Kurth said.

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