At the beginning of each year the legislature typically does what are known as Supplemental Appropriations. These supplementals are use to correct errors or under budgeting that occurred during the annual budget making process, approve new expenditures and/or distribute new income that has come in due to receipt of new grant funds, General Revenue Funds (GRF) or Other State Funds (OSF) that have accumulated beyond the original expectations.
This year in addition to the typical requests, there major errors and under budgeting that occurred when the State Departments submitted their budget requests. Unfortunately there are only miniscule new funds available that could be used to pay for them, and every dollar that is used for supplemental appropriations is a dollar that cannot be used to pay off our billions of dollars of unpaid bills.
These budgeting errors and under-appropriations signal potentially dire consequences ahead. Here is a summary of some of the major items:
- Department of Children and Family Services wants $38 million in GRF and $7 million in OSF to avoid hundreds of layoffs. The American Federation of State County and Municipal Employees (AFSCME), which represents DCFS workers, has reached a special agreement outside of the currently stalled general statewide collective bargaining process that would greatly allow the redeployment of workers from administrative/managerial positions to help directly serve children and families. Even with that assistance by labor, there are still pressures for supplemental funding to prevent layoffs. The Governor proposes to use funds from his budget vetoes for this purpose, however the Senate voted to override those vetoes this week. The House will act next week.
- Department of Commerce and Economic Opportunity wants $10.75 million in GRF and $3.7 million in OSF to avoid shutdown of worker assistance/job training programs, and targeted employment programs for minorities, veterans, youths aging out of foster care, ex-offenders and others.
- Department of Aging wants $1.1 million GRF to continue eligibility determinations for the seniors ride free transit program and reduced vehicle registration program. In addition, the Department underfunded the Community Care Program by $173 million in FY12, and will run an additional $140 million deficit this year due to underfunding. These huge numbers are driven by increased demand for services to allow seniors to age in place (versus vastly more expensive nursing home/institutional care) and by refusal of the Federal government to approve restrictions on services and eligibilities (changing the Determination of Need [DON] score) as proposed in the Illinois Medicaid Reform. Potentially, appropriation authority could fail in February 2013, and the Department may not be able to pay providers until July, which would obviously be devastating not only for the providers but for the tens of thousands of seniors who rely upon the program.
- Supreme Court’s Probation Program is diverting about $8.3 million from the Mandatory Arbitration Fund to maintain current funding for Probation Officers to supervise 107,000 offenders. These funds pay for the state’s share of Probation Officers throughout Illinois (local jurisdictions pay the balance). The Chief Justice says that the diversion of these funds is unsustainable and will preclude the use of the funds for their intended purpose.
- Department of Human Services will require an additional $25 million for home care workers because of the Federal disallowance of the change in the DON score.
- Collective Bargaining AFSCME, which is the major union representing state employees and the Governor are in the process of attempting to negotiate a new labor agreement which will extend until the next Governor is seated. While these talks have gone on for months, there has not been a successful result and in a recent action the Governor refused to extend the current contract. The contract issues could still be resolved at the bargaining table or could go to some type of arbitration or collapse if no agreement is reached. As is historic practice, the State Budget did not include funds for increased labor costs that would be a result of contract negotiations. Any increased costs would be in a supplemental appropriation. Due to severe financial crisis of the state and the cuts to services and programs, the House this week approved a Resolution which recommends that the labor agreement not include added costs to the state.
- Medical Disciplinary Fund is the fund from which activities of the Illinois Department of Financial and Professional Regulation are paid that license Illinois physicians to practice medicine, investigate and prosecute abuse and misconduct, etc. These costs are funded by annual licensing fees paid by doctors, which have not changed since 1987. The Department is requesting a hike in the license fees or claims that if there are not additional funds, they will cease to operate in February 2013. There is an emergency contingency plan being considered to borrow funds from the Realtors license funds to avoid a shutdown of physician licensing and investigations.
- Employee/Retiree Health Insurance has a liability that could reach $1.4 billion. $550 million was appropriated for this purpose, and it was anticipated that the collective bargaining agreement could result in changes in the contributions that employees (who currently pay premiums and out-of-pocket expenses toward their coverage) and retirees (including retired state employees, officers, judges and university employees who do not currently pay premiums) pay.
- Department of Human Services FY13 budget underfunded monies for community mental health services by $12 million as compared to FY12. In addition, due to a drafting error, funds for Supportive Housing need to be appropriated.
Unfortunately, the known revenue sources to pay for these hundreds of millions of dollars in need are skimpy at best, and it was our commitment to use new revenues to pay down our existing old bills. The single largest source of revenue would be GRF used to pay pension obligations, but there is no movement on that issue as yet. I will keep you informed, and look forward to your comments at my District Office 773 348 -3434, in Springfield at 217 782 3835 or greg@gregharris.org