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Thursday, Feb. 24, 2011 12:58 pm

Quinn calls for cuts to social services

‘Debt restructuring’ would still leave providers suffering

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Gov. Quinn's proposed cut to Medicaid reimbursements would hurt facilities that provide long-term care for the elderly and disabled, advocates say.

Gov. Pat Quinn wants to borrow billions of dollars to pay the state’s backlogged bills, but social service providers could still face cuts.

Illinois owes billions in overdue payments to mental health clinics, long-term care facilities and numerous other service providers statewide. In his Feb. 17 budget address, Quinn proposed borrowing $8.75 billion to pay them back, along with schools, contractors and more. Meanwhile, Republicans are saying “no way,” while possibly holding out for a smaller borrowing package.

Even with the borrowing, those providers are likely to suffer. Quinn’s budget calls for $770 million in cuts to certain programs in the Department of Human Services, which works with service providers who treat mental illness, substance abuse, sexual violence and more. Current funding of $318,000 for crisis nurseries like Springfield’s Mini O’Beirne Crisis Nursury, which provides care for children at risk of abuse or neglect, would be eliminated, as would $1.9 million for community mental health centers like Mental Health Centers of Central Illinois, operated in Springfield by Memorial Health System.

Quinn also wants to cut Medicaid reimbursements by six percent to save $500 million, though Kirk Riva, vice president of public policy with Life Services Network (LSN), says that proposal would be “devastating to seniors and the high-quality care they rely on.” LSN represents nonprofit long-term care providers statewide, many of which rely on Medicaid reimbursements for a significant portion of their budgets. Riva says a recently-passed state law is raising the number of nurses each facility would have to employ, but the rate cut would greatly reduce the number of nurses those facilities could hire or retain.

“As far as we are concerned, we think the cut is very extreme,” Riva says. “It’s particularly going to have a big effect on support services on a daily basis.”

Janet Stover, president and CEO of the Illinois Association of Rehabilitation Facilities (IARF), says once funding for social services dries up, reduced services can also follow. Those who need treatment for substance abuse but can no longer receive services become more likely to relapse. People with mental illnesses begin showing up in emergency rooms and jails instead, and people with developmental disabilities who live in treatment facilities are forced to move home with families who often must sacrifice an income to provide care.

“There’s a rolling economic and social impact here, and it gathers steam pretty fast,” Stover says, adding that social services have been targeted for cuts in each of the past three years.

“Due to consecutive years of cuts and chronic delayed payments by the state, many community-based providers of services and supports for children and adults with developmental disabilities and mental illness are already strained in continuing to provide high-quality services and supports,” she says.

Mark Schmidt, spokesman for The Hope School Learning Center in Springfield and its sister school in Chicago, says his organization is unsure how the cuts will affect them, but the six-month delay on bill payment has created difficulties. “We’re always trying to work hard to do the best with our resources,” Schmidt says. “It’s just something you have to manage, and we’re working hard to do that.”

Because the $8.75 billion is already owed to service providers and others, Gov. Quinn characterizes his borrowing plan as “restructuring our debt” rather than new borrowing.

“This isn’t just borrowing,” Quinn says in his budget book. “This is transferring debt from unwilling lenders to willing lenders.”

Under Quinn’s plan, the state would get lenders to pay Illinois’ backlogged bills, and the lenders would be repaid over a 14-year period using a half percentage point of the income tax increase passed in January.

But with Republican gains in the Illinois House during the 2010 elections upsetting the Democrats’ super-majority, the governor will have to get at least five House Republicans on board for the required three-fifths bonding approval. That may be difficult considering the political sting of the income tax increase and the fact that Quinn waited until after his speech to sign a bill that would have made his budget proposal illegal. Public Act 96-1531 requires the governor’s budget to be based on existing revenue sources only, but Quinn announced his signature on the bill just hours after proposing a budget based on the $8.75 billion borrowing plan.

Still, Quinn called on Republicans to accept the plan or offer their own.

“If you don’t agree with our debt restructuring plan, tell us which programs you would eliminate to pay $8.7 billion in overdue bills today,” Quinn said in his budget proposal speech. “Put it out there for all to see. Saying no is not enough unless you are willing to offer real alternatives.”

Contact Patrick Yeagle at pyeagle@illinoistimes.com.

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