Over the last two years, the state of Illinois in order to pay its basic bills has seized more than $1.6 million from at least 15 different “charity” funds, to which Illinoisans voluntarily donate for causes like feeding the hungry and helping the homeless.
Each year, the Illinois Department of Revenue invites taxpayers to donate their tax refunds or other money to a handful of funds described as “charities” and avenues to “make a difference” and “make giving easy.” The “voluntary charitable donation funds,” of which there have been more than 50 different varieties over the years, are commonly called “check-off” funds and range in purpose from preserving wildlife and researching diseases to supporting military families and promoting healthy smiles.
For the 2008 tax year, Illinois workers donated a total of $1.4 million to 10 different funds. But, with the approval of the General Assembly, Gov. Pat Quinn authorized $434,300 in sweeps from seven of the funds in Fiscal Year 2010, when the 2008 tax year donations were first available for spending. Sweeps are transfers from special funds with specific purposes to the general revenue fund, the state’s largest pool of money, which pays for basic government operations.
For the 2009 tax year, Illinois taxpayers donated $1.37 million to 10 different funds, but during the current fiscal year, FY2011, Quinn has borrowed $1,176,100 from seven of those funds as well as five other check-off funds that are no longer listed on tax forms but were holding donated money from previous years.
While the state is required by law to repay the borrowed sums within 18 months, the state will not return any swept funds.
“Those are donations made by the taxpayers of Illinois,” says Patty Schuh, spokesperson for Senate Republican Leader Christine Radogno, who voted against the sweeps in 2009. “They have the expectation that their donations will go toward the services they’ve donated to.” She says once contributors realize the funds can and have been “swept,” they might think twice about donating their money in the future. “People are starting to figure out that the alarm bells are being sounded.” Schuh blames the Democratic control over both chambers of the General Assembly and the governor’s office for looking for more money instead of cutting spending.
“Soon after Governor Quinn took office after former Governor Rod Blagojevich was impeached, the state needed to exercise ways to manage cash flow due to decades of fiscal mismanagement,” Kelly Kraft, spokesperson for the governor’s office of management and budget, said in an emailed response to Illinois Times’ questions about the sweeps. She says the state has not swept any funds since the FY2010 sweeps and that the governor’s office “has no intention of sweeping funds going forward.” As to the borrowed funds, Kraft says the state only tapped “excess” funds.
Though the state had not entered into grant agreements for most of the borrowed funds, at least four fund beneficiaries were told to put their projects on hold until the money was repaid.
On March 21 Gov. Pat Quinn took $134,900 from the Alzheimer’s disease research fund, leaving less than $1,300 behind. During the previous fiscal year, the state swept $112,500 from the fund. In response to the borrowing, the Illinois Department of Public Health this spring had to renege on approved grants for researchers at Eastern Illinois University, the University of Chicago and Northwestern University, which was supposed to receive two grants.
“While promises have been made that the funds will be returned, this money was already committed to Illinois researchers for their projects. Those projects now need to be put on hold and the possibility exists that the funding will not be repaid,” the Illinois chapter of the Alzheimer’s Association told Illinois Times in a written statement.
Kraft says the funds will be repaid, with interest, and IDPH spokesperson Melaney Arnold says the state will continue handing out grants starting in FY2012, which starts July 1. By FY2013, the state should have returned the borrowed sums, allowing the department to hand out more grants than usual, Arnold says.
Pam Molitoris runs the Central Illinois Food Bank, which expected to receive about $5,000 from the hunger relief check-off fund to help support its $1.5 million budget. Appearing on tax forms for the first time following Tax Year 2009, the hunger relief fund brought in more than $100,200 that would have been available during the current fiscal year, had the state not borrowed from it in the amount of $98,400.
Though the temporary transfer to the state’s general revenue fund means the food bank won’t receive any grants this year as originally expected, Molitoris says she’s just glad the state will repay the money. “I’m sure five or six thousand dollars would help, but what I’m concerned about at this point is that we get those funds at some point in time. I do believe they will pay that back and ultimately the funds are going to be used to feed hungry people and that’s what we care about,” Molitoris says.
Dr. Morris Cooper, chairman of Southern Illinois University School of Medicine’s department of medical microbiology and immunology, says Penny Severns grants have helped several of his faculty members establish their careers, become nationally competitive and bring in additional grants. “The return on investment for the state’s contribution has been significant,” he says.
Dr. Sophia Ran, an SIU associate professor of medical microbiology, says she earned a $70,000 Penny Severns grant in 2005 to research chemotherapy treatments. With the grant, Dr. Ran was able to develop data that allowed her to obtain $150,000 in federal grants and publish a paper that she says details a possible breakthrough in treating advanced cancer. Crediting the research made possible through the Penny Severns grant as the foundation of her work, Dr. Ran says she’s now applying for a $500,000 federal grant to continue her research.
“It [the Penny Severns grant] absolutely helped. No question about it,” she says about the development of both her research and her career. She says the check-off grants are vital for bringing the best scientists to Illinois. “These [local] cancer patients don’t want to go to Missouri or New York State. They should have here the best clinicians and the best methodology and the best researchers,” Dr. Ran says.
Other charity funds that experienced borrowing during the current fiscal year don’t have any past grant recipients to speak for them, as they have never been used for their intended purposes.
The epilepsy disease assistance fund only appeared on tax forms for 2005, when Illinoisans donated about $26,300. In order to remain an option on Illinois income tax forms, a charity fund must bring in at least $100,000 each year it appears. About four years after the money would have been available to spend, the state had yet to issue any grants, allowing the state to borrow $26,000 from the epilepsy fund in FY2011.
IDPH’s Arnold says the epilepsy fund requires a highly qualified advisory board to determine who should get funding. Those qualifications are too high, Arnold says, and IDPH has yet to identify anyone who meets the criteria and is willing to serve.
The autoimmune disease fund, which only appeared on tax forms for 2007, brought in a total of $42,792, available for spending starting in FY2009. Two years later, the money was still there until the governor borrowed all of it to float the general revenue fund. IDPH also oversees that fund, and Arnold says no one has applied for the grant money.
In other cases, agencies – including the Illinois Department of Human Services, which oversees the autism research fund – attribute delays in spending charity funds to the lengthy administrative rules process that determines how each agency can distribute the money.
The autism research fund only appeared on 2005 tax forms and taxpayers donated about $56,000. The donations then earned $7,000 in investment income before the state borrowed $63,000 from it this fiscal year, four years after the money first became available.
Contact Rachel Wells at firstname.lastname@example.org.