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Illinois budget cuts: Non-profits in crisis

Thu, Jun 16, 2011

By Suzanne Hanney and Katie Hills
StreetWise Editor-in-Chief & Contributor

Facing a $1 million late payment from the State of Illinois and the potential of 50 percent budget cuts next year, Sheryl Holman ponders the fate of her not-for-profit employment agency.

“I don’t understand what the priority of our state is, if it’s not Illinoisans, then what’s the priority?” said Holman, CEO of Community Assistance Programs (CAPs).

CAPs helps private sector employers use tax credits to provide jobs for South Side and south suburban residents as security guards, custodians, food store cashiers, receptionists, home health care workers, drivers.

“We have women in shelters, parents with children who have nowhere to go,” Holman said. “If these people don’t have jobs, they don’t have a stable home, then [they] can’t get into the system and as a result people are losing benefits. This is not the time to cut these organizations. We have kids out here in the summer; without these summer jobs, crime rates will get higher and kids will die.”

Until W. Carter, for example, found a job as a security guard with Skytech Enterprises, “It was tough meeting even my basic needs, only receiving $294 a month,” Carter said on the CAPs web site.

Skytech Enterprises has been with CAPs since 2002. ”We realized the benefits of tax credits and subsidized employment that has improved our bottom line,” Tony Rakestraw of Skytech Enterprises, who is also a CAPs board member, said in a testimonial on the its web site.
Success notwithstanding, CAPs has not received a payment for state-contracted services in six months. Despite the state income tax increase in January, Holman said she never knows each month if they will be paid.

“It’s just horrifying,” she added. “People are just doing their jobs. We’re not in this to get rich but people expect to get paid for their work. “
As the Illinois General Assembly was working toward a May 31 deadline on the FY 2012 state budget, agencies that subcontract human services described similar scenarios to StreetWise. Three years of diminished revenue in the wake of state budget deficits have forced them to use their own cash reserves or lines of credit just to survive.

Next year promises more of the same. Judith Gethner, director of Illinois Partners for Human Service, discussed probable cuts to 625 agencies that provide programs in child care, aging, after-school youth services, mental health, addiction, disabilities, foster care, violence prevention (sexual or domestic).

As state revenue continues to be in short supply, it’s unlikely that education, health care and public safety will be cut further, Gethner said, because they affect the general public so broadly. Human services, on the other hand, affect more narrow interest groups, although taken together they have a large constituency.

The general public doesn’t become interested in these separate human service sectors until it affects them personally, Gethner said. A taxpayer cares once their mother needs a home care assistant to cook and do housework so she can stay in her home rather than go to a nursing home or when their disabled sister needs a place to go during the daytime so they can work.

Simultaneously, the recession means that fewer jobs are being created, so that more people need services – and more people are on waiting lists, Gethner added. Human services can fill their lives more cost effectively than alternatives such as emergency rooms or prisons.

“Sheryl Holman, for example, is in a predominantly African-American community,” she said of the CAPs program. “But she has been able through job creation to keep the neighborhood safe because she keeps people employed. Now with the budget cuts, she is predicting a significant increase in crime. She’s owed $1 million. Who’s going to take care of these folks? Jail? That’s a cost greater than it would be to support her organization, which employs people.”

Although every dollar spent on drug treatment can save $7 in reduced crime and emergency room visits, addiction treatment and community mental health centers have increasingly become Medicaid-only providers, Gethner said. This creates a “gray area” for people who don’t have insurance at all or whose insurance has run out.

A working person, for example, might need mental health therapy sessions in order to function well at his job, she said. Insurance might only cover 20 sessions, which leaves at least 32 more to pay out of pocket — if weekly sessions are sufficient.

For over 30 years, state-funded agencies like Alexian Brothers in Arlington Heights have provided a safety net for those without insurance or whose coverage has been exhausted, she said. But diminished revenue of the last 2 ½ years has increasingly led the state to pull back from these human services.

“There are places in your neighborhood right now for people to go for addiction and community based mental health services,” Gethner continued. “If those folks don’t have a place to go for support and help do you think these people will just get well on their own?

“They don’t get well on their own,” she said. “They still have their issues. They go to the emergency room for help. They end up drunk on the street in front of your house. Where does that person get taken? To the jail or prison. You pay now or pay later.”

Mental health cut 23%

Mental health services were cut 22 percent in Gov. Pat Quinn’s proposed budget, and 23 percent in that proposed by the Illinois House, which became the General Assembly’s baseline. During a May 12 Mental Health rally day across the state, more than 2,000 people with mental illness, as well as their families and supporters, distributed literature that protested what they called “disproportionate cuts.”

The loss of $90 million in mental health funding could force 9,500 people in supportive housing back into homelessness, according to Mental Health rally day material. In addition, 12,000 Illinoisans with serious mental illnesses reside in nursing homes; 1 in 3 of these homes is ineligible for federal Medicaid funding, which costs the state $30,000 per patient per year.

These people are also living lesser lives in nursing homes than they would be outside these institutions, the mental health advocates noted. In fact, a class action lawsuit, Williams v. Quinn, charged that the state’s reliance on nursing homes violates the Americans with Disabilities Act. This led to a federal consent decree in which the state began a five-year process of moving people with mental illness out of nursing homes.
The state of Illinois operated large mental health homes until the 1970s, when it began to move residents out into the community. Unfortunately, the state has never devoted enough dollars to providing wrap around services so people with schizophrenia, bipolar disorder, schizoaffective (schizophrenia and mood disorder), obsessive compulsiveness or major depression and personality disorders could live well independently, said Scott Burgess, executive director of Alexian Brothers Center for Mental Health in Arlington Heights.

Among five suburban community mental health centers in Elgin, Elk Grove, Arlington Heights, Park Ridge and Northfield that house roughly 100 clients with mental health issues, Alexian has 55 individuals who live in its residential homes.

The five agencies have sustained $2.5 million cuts in state aid in the last three fiscal years, Burgess said. They have disallowed 139,235 treatments in counseling, psychiatric evaluation, medication management, residential services, day programming and crisis intervention to 5,355 individuals.

This fiscal year’s 20 percent cuts to the mental health sector would mean another $2 million loss to the five agencies.

“The percentages in the past have all been three percent, six percent, five percent,” Burgess said. “Now, 20 percent in one year is exponentially worse. It’s basically a culmination of what we consider dramatic cuts in the last three years, like taking all that pain and doubling it in one year.”

Destroying the safety net

Meanwhile, 80 percent of Alexian clients do not have insurance for treatment or for prescription drugs, Burgess said.

“We are the safety net,” he added. “That’s why our referral basis goes up when people lose jobs – why community mental health centers were built – to be the wraparound support for people who don’t have any place else to go. We have a waiting list of 90 people right now just at our center and more calls coming in every day.”

Burgess is also distressed that the proposed budget eliminates the Illinois Children’s Mental Health Partnership. This early intervention program funds visits by mental health counselors at middle schools and high schools to help teachers identify students with mental/social issues and give them help ranging from group or individual counseling to crisis intervention.

In addition, students receive education about depression and positive coping skills. Alexian’s program is one of a dozen in the state and impacts 10,000 students.

“Suicide is the third leading cause of death for children under 16, so we know kids are struggling and there’s devastating potential outcomes if we don’t address this,” Burgess said.

Like Alexian, New Age Services has also seen 20 percent budget cuts since FY2009, which has meant 87 fewer people receiving addiction treatment and support, according to CEO Kathye Gorosh. The agency serves North and South Lawndale, East and West Garfield Park, Humboldt Park and Austin.

New Age is also awaiting a $50,000 payment from the state but Gorosh has had no formal notification of when it will come; the agency was also told to hold another $30,000 in billings from the last two months of the last fiscal year. Lack of payments has directly affected their income. Gorosh said they have had to close their treatment center periodically as a result and have had trouble planning staffing levels for FY 2012.

“With people in addiction, if you just cut off their treatment, they revert. [They’re] not getting treated in withdrawal. Unless you’ve had adequate time for their behaviors to change, they go back to the streets, show up in emergency rooms-which costs more in the long run, jeopardizes their health and lives,” Gorosh said.

Similarly, Community Counseling Centers of Chicago (C4) has lost hundreds of clients over the past three years because of repeated state budget cuts and it expects to lose more as a result of the FY 2012 budget. C4 is a not-for-profit counseling center in Uptown that provides behavioral health services (from overcoming substance abuse disorders to intense psychiatric problems) to over 5,000 people a year.

C4 Clinical Director Bruce Seitzer is also concerned over talk of a six percent cut in Medicaid reimbursement rates, which are C4’s biggest source of funding.

Medicaid cuts would add to pain

“That is one worst case scenario, because the current rate already doesn’t cover most costs,” Seitzer said. What’s worse, it is almost certain that services for those who are unfunded, or don’t qualify for Medicaid, will be cut drastically as well. In both cases, individuals will have to pay for more or all of their treatment themselves, and C4’s low-income clientele does not have the means. Without access to a program like C4, these patients could more likely end up in emergency rooms and entering the criminal justice system, which Seitzer believes will only cost the state more money.

“We’re already at the breaking point with the cuts we’ve had the last few years, so I hope we can at least maintain our current levels,” Seitzer said.

Despite budget cuts amounting to 20 percent in the last three years, Connections for Abused Women and their Children (CWAC) has been able to maintain its services even while cutting staff. CWAC is one of the few domestic violence programs that allows the children of battered women to stay in their shelters.

“A woman is often not able to leave an abusive relationship if they can’t provide for their family, so we have to think of the whole family,” said Cory Ryan, executive director. CWAC currently serves 3,500 individuals with its hotline, shelters, and outreach programs.

While CWAC currently avoids wait-listing women by referring them elsewhere, additional cuts could make this difficult. “The tragedy is that it’s not just our individual program, it’s all programs, which results in less referrals,” Ryan said.

In addition to referrals, the number of beds available in their shelters, crucial for women to escape abusive relationships, could be affected by the cuts. “The most extreme at the shelter would be to shut down beds, which we’re reluctant to do, but we’d have to,” Ryan exclaimed. If this happens, many women and their children could end up in homeless shelters, which Ryan said do not provide the necessary services for battered women.

Esperanza Community Services Executive Director Diana Farina White considers herself relatively lucky. This is because her organization has a line of credit from the bank that is essentially her lifeline, a safeguard that many not-for-profits don’t have. Even still, the state is six months behind in payments for the organization’s contracted services and owes them over $500,000.

Esperanza serves 250 individuals with developmental disabilities all over Chicago each year. It offers a variety of programs including its own school and training programs. Its main program is day treatment that allows families who have an adult child with disabilities to continue to work so that their child can live at home.

If the FY 2012 budget cuts are over the predicted six percent, Farina White says this program, along with others, will no longer be profitable and Esperanza would be forced to stop their services. “I have individuals who come to our day program five days a week. If I have to close and they don’t have anywhere else to go, a family member will have to quit their job to stay home. Will they be able to keep their child living with them?” Farina White asked.

Many families cannot afford to stay home, which could force more people to place their child in an institution, she said. Farina White called institutionalization “antiquated, more expensive, and inhumane.”

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One Response to “Illinois budget cuts: Non-profits in crisis”

  1. Ben says:

    I am a “domestic violence” survivor. Mutually combative episode with not even a scratch on either party. However, the state fund domestic interventionist became involved and turned what could have been an mutually agreeable divorce into a life-destroying event especially for the “victim” who ended with $20K in attorney’s fees that are not dischargeable in bankruptcy.

    Maybe cutting taxpayer funding for socio-political crusades is not all bad.

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