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Thursday, June 28, 2012 09:24 pm

Illinois falls apart

State agencies scramble to avert crises as funding vanishes

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PHOTOSHOP ILLUSTRATION BY JOSEPH COPLEY

Marc Miller has been an outdoorsman for as long as he can remember.

Miller says he grew up in a family of hunters, anglers and camping enthusiasts, but also learned the value of protecting the land. He’s a combination of conservationist and environmental advocate, which is fitting for his position as director of the Illinois Department of Natural Resources. But Miller’s breadth of interest and experience also makes DNR’s current financial situation doubly painful for him.

DNR has long dipped into special funds to supplement its budget and pay for operating expenses as allowed by law, Miller says, but the practice has intensified greatly in recent years because the department’s annual budget has been cut by $58 million over the past decade, a 55 percent reduction.

Miller likens it to burning the furniture to heat the house.

Now, those special funds upon which DNR has relied are becoming depleted, leaving Miller’s department without enough staff, adequate equipment or money for even basic maintenance. DNR lost 43 employees from 2011 to 2012, and the department is expected to lose another 34 employees in 2013, leaving the total headcount at 1,150 statewide. In the past two fiscal years, DNR’s budget from the state’s General Revenue Fund has decreased from about $61 million in FY11to $50 million in FY12. For FY13, which starts on July 1, that number is expected to drop to about $45 million.

“It’s very difficult to do all the work mandated for our agency,” Miller says. “We can’t go any lower. We need to be thinking about what kind of work we need to be doing to fulfill our core mission.”

DNR does more than just mowing state parks and selling fishing licenses. The department oversees oil and coal permits, inspects coal mines to ensure their safety, manages stormwater and flood control efforts, holds boating, snowmobile and hunting safety courses, protects endangered animals, and a variety of other tasks mandated by state law.

Already, DNR has started dialing back services and reorganizing priorities. In March, DNR issued its last edition of Outdoor Illinois, the monthly nature magazine the department has published since the 1970s, when it was an informal newsletter. Cutting the magazine wasn’t easy, Miller says, but it had to be done for the good of the department. In the final edition, Miller wrote an article describing DNR’s woes and issuing a grim forecast for DNR’s future.

“Unless there is relief or a change in the agency’s business model, the deferred maintenance at parks will continue, staff will not be replaced when they retire or otherwise leave the agency, and there will be limited or no replacement of old vehicles and equipment,” Miller wrote. “Important programs that protect resources and natural areas will diminish, and wildlife, fisheries, forestry and law enforcement programs will decline. Our ability to monitor and regulate floodplains and industry, as well as protect public health and safety, will be reduced.”

DNR director Marc Miller says the choice to stop printing the department's Outdoor Illinois magazine is part of a larger reorganization meant to save money.
DNR is one of several state agencies in Illinois already suffering from past budget cuts – a condition likely to worsen as the state further reduces spending for the next fiscal year. While Gov. Pat Quinn and state lawmakers say reductions are necessary to bring spending in line with current revenues, the consequences are likely to be cuts or delays in public services, along with increased long-term costs due to deferred maintenance and inefficiencies created by staff shortages.

That’s on top of the social toll of cutting programs that provide care and support for the elderly, the mentally ill, the disabled and the poor. The price they’ll likely pay can scarcely be measured in dollars.


Smaller staffs, fewer dollars

For many state agencies, a reduction in funding can translate into fewer workers, which means larger workloads for the remaining staff. State employee headcount in Illinois has dropped over the past five fiscal years, following a large decrease from the 1990s. Numbers from Quinn’s office show the total statewide headcount at 54,267 in 2008. That number increased slightly because of extra staff hired to implement programs under the federal American Recovery and Reinvestment Act, but the headcount has since continued to decline. Currently, Quinn’s office estimates the state has 51,563 employees, which represents a decline of 2,000 employees since the start of 2009. Illinois now has the lowest state employee headcount per capita of any state, Quinn’s office claims.

Recent audits from the office of Illinois Auditor General Bill Holland provide several examples of understaffed agencies struggling to do all of the work mandated by law.

• The Illinois Department of Revenue blames understaffing for a backlog of unprocessed tax returns. The department has lost 194 people since June 2011 and has only hired 53 workers to replace them – an eight percent total reduction in headcount.

• The Illinois State Fair lacks enough staff to ensure all vendor contracts are signed before the contract period starts, exposing the state to “unnecessary legal risks” and expenses.

• The Illinois Department of Public Health partly blamed staff shortages for its inability to adequately monitor whether grant recipients used state funds appropriately.

• The Illinois Department of Healthcare and Family Services said it doesn’t have staff available to create a procedures manual explaining how to set premium rates for the Teacher’s Retirement Insurance Program (TRIP). That knowledge rests with only one person in the department, the audit notes.

Those who work in agencies that are struggling to completely fulfill their mission describe low morale and apprehension among employees.

Terry Meacham is a mental health technician at the state-run H. Douglas Singer Mental Health Center in Rockford and secretary of his local branch of the American Federation of State County and Municipal Employees (AFSCME), the largest union representing state employees. Meacham says Singer, which is overseen by the Department of Human Services, is understaffed by 10 to 12 people, and patients sometimes wait several days for treatment, with some even spending nights in the waiting room. The facility has been targeted for closure, though the legislature has appropriated money to keep it open for the coming fiscal year.

“People are terrified,” Meacham says regarding the uncertainty. “Some of them have dedicated 20 or 30 years. This is their life. Most of us really enjoy the work we do.”

Singer provides mental health treatment for people in 23 counties, says Meacham. If the facility is closed in the name of saving the state money, Meacham predicts larger social costs in the long run.

“The people we serve are going to suffer greatly,” he says. “Jobs will be lost. There will be an economic loss. Crime rates will go up. Suicides will go up. It’s a hard battle.”

Bruce Dubre has worked for the Department of Children and Family Services in Springfield for 22 years, much of that on the child abuse hotline, though he now works in the agency’s policy department. He’s also chief union steward for his local branch of AFSCME. He says his coworkers at DCFS “are in absolute panic.”

Despite a slight increase in hiring due to the federal stimulus package, state employee headcount has decreased steadily over the past few years, leaving state agencies to do the same amount of work with fewer employees. Numbers come from the state’s FY


“People don’t understand how we got to this point, and they’re terrified of what’s going to happen,” Dubre says, adding that his department could lose as many as 375 workers. The state budget passed by lawmakers in May contains about $1.17 billion for DCFS, a reduction of about $83 million from the previous fiscal year.

A reduction in headcount for DCFS would jeopardize the department’s ability to comply with a federal consent decree requiring caseloads to remain below a certain threshold, says DCFS spokesman Kendall Marlowe.

He says the department will likely have to cut the Intact Family Services program, which seeks to avoid removing children from their homes by providing families with education, services and support to eliminate the root causes of abuse and neglect. That’s one of the only areas DCFS can cut without neglecting legally mandated duties, but even that cut won’t be enough, Marlowe says. DCFS has about 250 workers in the Intact Family Services program, so the agency will have to cut even more workers from other programs to stay within budget, Marlowe says.

He and Dubre lament the cuts as negatively affecting the children DCFS serves.

 “There are going to be kids out there who get hurt because of these cuts,” Dubre says. “It’s not unlikely for some child to die because they’re not going to get the services they need, and without services, there’s a strong possibility the family is going to continue to neglect or abuse the child. Some kid is going to get hurt or killed, and that’s what it’s all about: protecting children.”


Decades in the making

Illinois is currently – some would say finally – attempting to address underfunding of its long-term state employee pension liability, but that reckoning is now putting stress on the rest of the state’s budget. While the State Employees Retirement System has enough cash to pay current retirees, state law requires that pensions be funded enough to cover 90 percent of all existing and future pension liability by 2045. That means by 2045, the state must have enough money to pay 90 percent of all employees if they all retired at once. Currently, the pension system is funded at about 45 percent, which is about $83 billion shy of the target.

After several years of skipping payments to the pension system, the state must now pay ever-increasing amounts to catch up, explains Kelly Kraft, Quinn’s spokeswoman.

“What happened here is past lawmakers backloaded the payment schedule so the large payments would come due now, and as the years go on, the payments keep increasing,” Kraft says. “Increased benefits were also promised without the revenues to back up these promises, and pension holidays were also taken. That is why we need to enact additional pension reforms immediately.”

For Fiscal Year 2013, which starts on July 1, Illinois must put more than $5 billion of its $30 billion general revenue budget toward pensions. The state’s full FY13 budget is about $61 billion, but most of that money comes from funds already earmarked for other purposes. Kraft says the current $5 billion pension payment is three times what the state had to pay in 2008, illustrating the rapidly rising cost of adequately funding the pension system.

Quinn and legislative leaders are currently negotiating pension reforms, though any changes could come under judicial scrutiny because of the state constitution’s prohibition against reducing state employee pension benefits.

DNR director Marc Miller says the choice to stop printing the department's Outdoor Illinois magazine is part of a larger reorganization meant to save money.
The Center for Tax and Budget Accountability (CTBA), a nonpartisan group offering budget and policy analysis, says Illinois’ problems will continue to worsen because of a “structural deficit” built into the state’s tax system. The growth in tax revenue has not kept pace with the increasing costs of providing public services at the same time that demand for those services is growing due to stagnant private sector wages, a faltering job market and other social problems.

Human services like health care, nursing care and child protection services alone cost Illinois almost $13 billion in the current fiscal year. Education costs the state about $9 billion a year. Those two areas of service together consume nearly 84 percent of the $26.9 billion that the state spent from its General Revenue Fund for the current fiscal year, which ends June 30.

Even the temporary income tax increase enacted in 2011 wasn’t enough to offset the rising cost of providing public services, CTBA says. The group says the solution is to enact a graduated income tax to replace the flat income tax specified in the state’s constitution. A proposal to create a graduated tax met with little support in the most recent legislative session, failing to even be called for a committee hearing.

Quinn spokeswoman Kelly Kraft is careful to avoid the thorny subject of what will happen when the temporary tax increase expires in 2014, though she says it has helped address the state’s backlog of bills by reducing the delayed payment cycle by about two months. Lawmakers could decide to extend or make permanent the tax increase, but it’s likely to be an extremely contentious issue because 2014 is the next election year for the office of governor and several legislative seats.

“The temporary tax increase was needed to address the decades of poor financial decisions that have been made in the state of Illinois,” Kraft says. “These bad financial decisions created the structural deficit in Illinois – the hangover, if you will – and these past bad decisions have come home to roost. … Most areas of state government have been working at lean levels for quite some time due to decades of fiscal mismanagement in our state.”


Triage

For now, Marc Miller has hope for the future of the Department of Natural Resources, despite the tough financial situation. Like many other state agencies, Miller’s department is working through a difficult process of spending cuts and reorganization, while also searching for new sources of revenue. For these agencies, constant cuts and uncertainty are likely to be the new normal.

In the meantime, DNR awaits legislative approval for fees on activities like horseback riding and all-terrain vehicle riding in state parks, which Miller said have already been agreed upon by groups representing those interests. Hunting and fishing fees will not increase, Miller says, because hunters and anglers have already paid fees for years.

Additionally, Miller says his staff reviewed more than 800 mandated duties assigned to DNR to determine priorities and even have some of them removed from his department through legislation. Reducing DNR’s mandates is expected to save the department $1 million annually, while the process of reviewing the department’s duties revealed about $10.7 million in additional savings through more efficient management. DNR spokesman Chris McCloud says that extra effort showed the agency is “not just advocating for more dollars without trimming inefficiencies.”

Miller says he hopes the public lobbies lawmakers on behalf of DNR, especially after he says the department made strides toward more responsible management.

“The people who work here on front lines care deeply about the mission and trying to succeed,” Miller says. “If you’re somebody who works in the natural world, you can see the resilience of nature and take heart in that and know that you can see things turn around. We’re not going to dwell on the past. We’re going to go to work every day, trying to make a difference and make things better.”

Contact Patrick Yeagle at pyeagle@illinoistimes.com.

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