© center for tax and budget accountability 2011 1 center for tax and budget accountability 70 e....

© Center for Tax and Budget Accountability 2011

1

CENTER FOR TAX AND BUDGET ACCOUNTABILITY70 E. Lake Street Suite 1700 Chicago, Illinois 60601 direct: 312.332.1480 Email: [email protected]

Illinois State Funding for Human Services in Context

For: Wednesday June 14, 2011; 7:30 PM

Advocates United Wingate Inn

I8421 N. Creek Dr.Tinley Park, IL

Presented by:Ron Baiman

Director of Budget and Policy Analysis


2

FY 2012 Proposed Cuts in Human Services:

TH

E S

TA

RT

ING

PO

INT

TH

E S

TA

RT

ING

PO

INT GOMB FY2012 Proposed General Funds Operations Budget1

Nominal Dollar Change From FY2011 ($ in Millions) Category FY2012

Proposed FY2011 Revised

(Feb 2011)4 Diff FY2012 Proposed –

FY2011 Revised

% Change FY2011 Enacted Approp

(July 2010) General Fund Excluding Pension $25,931 $24,313 $1,618 6.7% $24,940 PreK-12 Education $7,245 $7,020 $225 3.2% $6,997 Higher Education $2,149 $2,124 $25 1.2% $2,116 Health Care1 $7,749 $7,134 $615 8.6% $7,777 Human Services2 $4,917 $5,128 ($211) -4.1% $4,929 Public Safety3 $1,553 $1,391 $162 11.6% $1,403 Notes: 1) DPH and DHFS

2) Aging, DCFS and DHS 3) Corrections and State Police 4) FY2011 Revised Budget assumes that the Fiscal Stabilization Fund will be replenished and $505 M of interfund borrowing repaid in FY2011.

Source: FY2012 GOMB Proposed Budget Book (2/17/2011)

1 GOMB FY2012 Budget Book, February 2011, Chap. 2-13, Chap. 2-14 Footnote 2, Chap. 2 Table 1-A.


3

PR

OP

ER

TY

TA

X R

EL

IAN

CE

PR

OP

ER

TY

TA

X R

EL

IAN

CE

Proposed FY 2012 Cuts Are in the Department ofHuman Services:

Lar

gest

Per

cen

tage

Cu

t of

An

y H

um

an

Lar

gest

Per

cen

tage

Cu

t of

An

y H

um

an

Ser

vice

Age

nci

y in

Las

t Dec

ade

Ser

vice

Age

nci

y in

Las

t Dec

ade

Change in General Revenue Fund Appropriations to Human Service Agencies, FY2011-FY2012

($ in Millions)

Category FY2011 Enacted

FY2012 Proposed $ Change

% Change

Department of Aging $628 $798 $170 27.1%

Department of Child and Family Services $836 $843 $7 0.8%

Department of Human Services $3,663 $3,274 (-$389) (-10.6%)

Total Across Agencies $5,128 $4,917 (-$211) (-4.1%)

Data from GOMB FY2012 Operating Budget


4

The Department of Human Services is cut by $ 457 M (12.5%) from FY 2011 in Enacted FY 2012 Budget

Hu

man

Ser

vice

s F

un

din

g in

En

acte

d H

um

an S

ervi

ces

Fu

ndi

ng

in E

nac

ted

FY

201

2 B

udg

et is

cu

t by

$ 68

M

FY

201

2 B

udg

et is

cu

t by

$ 68

M

rela

tive

to G

over

nor

’s P

ropo

sed

FY

re

lati

ve to

Gov

ern

or’s

Pro

pose

d F

Y

2012

Bu

dget

20

12 B

udg

et

CategoryFY 2012

ProposedFY 2012 Enacted

FY 2011 Enacted

% Change FY11 - FY12P

$ Change FY11 - FY 12P

% Change FY11 - FY12E

$ Change FY11 - FY 12E

Department of Aging $798.9 $820.3 $628.8 27.0% $170.1 30.4% $191.5Department of Child and Family Services $843.6 $835.5 $836.3 0.9% $7.3 -0.1% ($0.8)Department of Human Services $3,274.1 $3,205.5 $3,662.5 -10.6% ($388.5) -12.5% ($457.0)

Total Across Agencies $4,916.54 $5,127.64 -4.1% ($211.1) -5.2% ($266.3)

*Data taken from GOMB FY2012 Operating Budget and HB 3717


5

History of Illinois General Fund Appropriations adjusted for Inflation and Population Growth

Illi

noi

s h

as c

ut r

eal s

pen

din

g on

pu

blic

Il

lin

ois

has

cu

t rea

l spe

ndi

ng

on p

ubl

ic

serv

ices

by

16%

sin

ce F

Y 2

000

serv

ices

by

16%

sin

ce F

Y 2

000

Category FY2012 Proposed

FY2000 Adj (ECI and Pop

Growth) 4

Diff FY2012-FY2000 Adj

(ECI and Pop Growth) 4

% Change

General Fund Excluding Pensions

$25,931 $30,829 ($4,898) -15.9%

PreK-12 Education $7,245 $7,443 ($198) -2.7%

Higher Education $2,149 $3,306 ($1,157) -35.0%

Health Care1 $7,749 $8,952 ($1,203) -13.4%

Human Services2 $4,917 $7,066 ($2,150) -30.4%

Public Safety3 $1,553 $2,075 ($522) -25.2%

Notes: 1) Department of Public Health and Healthcare and Family Services(Public Aid in 2000 and 2012)

2) Aging, Department of Children and Family Services and Department of Human Services

3) Corrections and State Police

4) Index value for FY2000 has been approximated by using 2001 and 2001 ECI. For Health Care Medical Care Midwest CPI (MCMWCPI) has been used.

Sources: COGFA Illinois State Budget FY2000, and GOMB Illinois State Budget FY2012.


6

Illinois Human Service Funding Relative to Other States

• Illinois is currently ranked 11th in per-capita income

• A ranking of human services funding as a share of income of11th would therefore be a median (or “average”) ranking relative to capacity for Illinois.

• According to a 2007 IGPA study, in FY 2002 (before the cuts described above) Illinois' ranked 40th in per-income funding for developmental disabilities and 35th in per-income funding for Mental Health.

Bef

ore

the

deca

de o

f cu

ts f

un

din

g fo

r B

efor

e th

e de

cade

of

cuts

fu

ndi

ng

for

hu

man

ser

vice

s in

Ill

inoi

s w

as a

lrea

dy

hu

man

ser

vice

s in

Ill

inoi

s w

as a

lrea

dy

very

low

rel

ativ

e to

cap

acit

y ve

ry lo

w r

elat

ive

to c

apac

ity


7

And even if “capacity” is ignored, in 2002 Illinois was

a low funder relative to other states

• The best measures of funding relative to need are per population, or “per-capita” measures

• According to the same 2007 IGPA study, in FY 2002 (before the cuts described above) Illinois' ranked 31th in per-capita funding for developmental disabilities and Mental Health. E

ven

acc

ordi

ng

to e

xclu

sive

ly n

eed

Eve

n a

ccor

din

g to

exc

lusi

vely

nee

d ba

sed

“per

cap

ita”

term

s Il

lin

ois

hu

man

ba

sed

“per

cap

ita”

term

s Il

lin

ois

hu

man

se

rvic

es f

un

din

g in

200

2 w

as lo

w.

serv

ices

fu

ndi

ng

in 2

002

was

low

.


8

Illinois Human Service Funding Increase Necessary to

Achieve Median in Per Income Spending in FY 2002

$0

$500

$1,000

$1,500

$2,000

$2,500

Mental Health Services Developmental DisabilityServices

Sp

en

din

g (

$ M

illi

on

s)

Increase forRank 10*

ActualExpenditures

Source: IGPA Study Tables 1-2 p. 32 and Tables 6-7 p. 34-5 * Data for Rank 13 not available


9

Illinois Human Service Approximate Funding Increase Necessary to Achieve Median* in Per Capita

Spending in FY 2002(*Relative to Per Capita Income)

$0$200$400$600$800

$1,000$1,200$1,400$1,600$1,800$2,000

Mental HealthServices

DevelopmentalDisability Services

Sp

en

din

g (

$ M

illi

on

s)

Increase forRank 25

ActualExpenditures

Source: IGPA Study Tables 1-2 p. 32 and Tables 6-7 p. 34-5


10

Human Services Appropriations Since 1992

Rec

ent N

omin

al C

uts

are

the

Wor

st

Rec

ent N

omin

al C

uts

are

the

Wor

st

Sin

ce F

Y 2

003

Sin

ce F

Y 2

003 FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY 2010 FY 2011

FY 2012 Proposed

Aging $243.2 $254.3 $263.0 $341.0 $365.5 $426.5 $459.7 $539 $656 $628 $798

4.6% 3.4% 29.7% 7.2% 16.7% 7.8% 17.1% 21.8% -4.2% 27.1%

Children and Family Services $925.5 $838.0 $819.4 $781.2 $810.1 $775.9 $896.8 $908 $857 $836 $843

-9.5% -2.2% -4.7% 3.7% -4.2% 15.6% 1.2% -5.6% -2.4% 0.8%

Human Services $3,802.5 $3,574.0 $3,703.0 $3,819.8 $3,871.5 $3,994.2 $4,135.1 $4,209 $3,934 $3,663 $3,274

-6.0% 3.6% 3.2% 1.4% 3.2% 3.5% 1.8% -6.5% -6.9% -10.6%Total Human Services $4,971.2 $4,666.3 $4,785.4 $4,942.2 $5,047.2 $5,196.7 $5,491.8 $5,655 $5,446 $5,128 $4,917

Source: Commission on Government Forcasting and Accountability, Budget Summary for FY2002 to FY2008, and Illinois OMB data for FY2009 to FY 2012.

Figure 1: Annual General Fund Appropriations for Human Services in Illinois (in millions of current $)


11

For

an

$ 8

00.4

M (

15.7

%)

Yea

rly

Def

icit

F

or a

n $

800

.4 M

(15

.7%

) Y

earl

y D

efic

it

and

$ 8.

0 B

Cu

mu

lati

ve D

efic

itan

d $

8.0

B C

um

ula

tive

Def

icit

Human Services Appropriations have fallen short of inflation since 1992

FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY 2010 FY 2011FY 2012 Proposed Average Total

Total Human Services Appropriations in Current $ $4,971.2 $4,666.3 $4,785.4 4942 $5,047.1 $5,196.6 5491.6 $5,655.1 $5,446.0 $5,128 $4,917

ECI 1.036 1.038 1.036 1.030 1.034 1.033 1.024 1.016 1.019 1.019Real Value of 2002 Appropriation in Current $ based on ECI $4,971.2 $5,148.6 $5,344.4 $5,536.0 $5,700.6 $5,892.2 $6,083.8 $6,227.1 $6,327.9 $6,448.1 $6,570.7

Inflation Shortfall -$482.3 -$559.0 -$594.0 -$653.5 -$695.6 -$592.2 -$572.0 -$881.9 -$1,320.1 -$1,653.7 -$800.4 -$8,004.4

%Inflation Shortfall -10.3% -11.7% -12.0% -12.9% -13.4% -10.8% -10.1% -16.2% -25.7% -33.6% -15.7%

Source: CTBA calculations based on Commission on Government Forcasting and Accountability, Budget Summary for FY2002 to FY2008, and Illinois OMB data for FY2009 and FY2012. Midwest ECI as reported by BLS adjusted to FY basis.

Figure 2: Human Services General Fund Appropriation Cuts Relative to FY2002 Based on ECI (in millions of current $)


12

For

an

$ 2

9.0

M (

0.6%

) Y

earl

y D

efic

it

For

an

$ 2

9.0

M (

0.6%

) Y

earl

y D

efic

it

and

$ 29

0.2

M C

um

ula

tive

Def

icit

and

$ 29

0.2

M C

um

ula

tive

Def

icit

And short of population growth

FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY 2010 FY 2011FY 2012

Proposed Average TotalReal Value of 2002 Appropriation in Current $ based on ECI $4,971.2 $5,148.6 $5,344.4 $5,536.0 $5,700.6 $5,892.2 $6,083.8 $6,227.1 $6,327.9 $6,448.1 $6,570.7Population Growth 1.003 1.004 1.002 1.003 1.005 1.005 1.005 1.006 1.007 1.007

Real Value of 2002 Appropriation Adjusted for Annual Population Growth $4,971.2 $5,164.9 $5,364.5 $5,548.8 $5,720.2 $5,920.7 $6,114.0 $6,259.8 $6,367.1 $6,493.1 $6,616.5

Population Growth Shortfall $0.0 -$16.3 -$20.1 -$12.8 -$19.6 -$28.4 -$30.2 -$32.7 -$39.2 -$45.0 -$45.8 -$29.0 -$290.2

%Population Growth Shortfall 0.0% -0.3% -0.4% -0.3% -0.4% -0.5% -0.6% -0.6% -0.7% -0.9% -0.9% -0.6%

Source: CTBA calculations based on Commission on Government Forcasting and Accountability, Budget Summary for FY2002 to FY2008, and Illinois OMB data for FY2009 and FY2012. FY 2002 to 2009 Cenus population. FY 2010 to 2012 DCEO population projections.

Figure 3: Human Services General Fund Appropriation Cuts Relative to FY2002 Based on Population Growth (in millions of current $)


13

For

an

$ 8

29.5

M (

16.2

%)

Yea

rly

Def

icit

F

or a

n $

829

.5 M

(16

.2%

) Y

earl

y D

efic

it

and

$ 8.

3 B

Cu

mu

lati

ve D

efic

itan

d $

8.3

B C

um

ula

tive

Def

icit

Accounting for inflation and population growth

FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY 2010 FY 2011FY 2012

Proposed Average Total

Total Human Services Appropriations in Current $ $4,971.2 $4,666.3 $4,785.4 4942 $5,047.1 $5,196.6 5491.6 $5,655.1 $5,446.0 $5,128.0 $4,917.0

-6.13% 2.55% 3.27% 2.13% 2.96% 5.68% 2.98% -3.70% -5.84% -4.11%Real Value of 2002 Appropriation Adjusted for Inflation and Population Growth $4,971.2 $5,164.9 $5,364.5 $5,548.8 $5,720.2 $5,920.7 $6,114.0 $6,259.8 $6,367.1 $6,493.1 $6,616.5

Total Shortfall $0.0 -$498.6 -$579.1 -$606.8 -$673.1 -$724.1 -$622.4 -$604.7 -$921.1 -$1,365.1 -$1,699.5 -$829.5 -$8,294.5%Total Shortfall 0.0% -10.7% -12.1% -12.3% -13.3% -13.9% -11.3% -10.7% -16.9% -26.6% -34.6% -16.2%

Source: Figures 1-3.

Figure 4: Total Human Services General Fund Appropriation Cuts Relative to Real Per-Capita FY2002 Levels (in millions of current $)


14

A D

ecad

e of

Hu

man

A

Dec

ade

of H

um

an

Ser

vice

s E

visc

erat

ion

S

ervi

ces

Evi

scer

atio

n

($482)($559) ($594)

($654) ($696)($592) ($572)

($882)

($1,320)

($1,654)

($16)

($20)($13)

($20)($28)

($30) ($33)

($39)

($45)

($46)

($1,800)

($1,600)

($1,400)

($1,200)

($1,000)

($800)

($600)

($400)

($200)

$0

FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY2010 FY2011 FY2012

(mill

ions

)

Figure 5: Amount by Which State Spending on Human Service Programs Falls Short of Annual Inflationary Costs and

Population Growth From FY2002 to FY2012

By failing to take into account the annual inflationary cost of doing business, Illinois has shorted annual human service funding by a cummulative $ 8.0 B from FY03 to FY12. By failing to take into account population growth Illnois has shorted annual human service funding by approximately $ 290M from FY03 to FY12. In total Illinois human services have been shorted approximately $ 8.3 B over this period.

Note: Commission on Government Forecasting and Accountabiity, Budget Summaries for FY2002 to FY2009 , GOMB data for FY 2010 to FY 2012. Final General Revenue appropriations for the Illinois Departments of Aging, Children & Family Services, and Human Services. Appropriations shortfalls necessary to maintain real value of FY2002 appropriation based on National Employment Cost Index (ECI). Population growth estimates f rom Census and Illinois Department of Commerce and


15

Hu

man

Ser

vice

Cu

ts H

ave

Hu

man

Ser

vice

Cu

ts H

ave

an I

mm

edia

te N

egat

ive

an I

mm

edia

te N

egat

ive

Eco

nom

ic I

mpa

ctE

con

omic

Im

pact

Continued Human Service Funding cuts have cost Illinois thousands of Mostly private

sector jobs• An estimated 75% of DHS expenditures

go to private non-profit businesses• Using Mark Zandi (chief economist at

Moody’s.com) multipliers, the cumulative $ 8.3 B human services underfunding has cost the state over 118,000 jobs.

• Public spending on human services helps the economy more than equivalent tax reductions.


16

Effort by Senate to add back $108.7 M to Human Service Agencies in Capital Bill 2189

Senate Amendment 1

• These will be added only if capital bill is passed.

• This will require 3/5 supper majorities and republican votes in both chambers

• And the governor must sign off on any deal

Pos

sibl

e R

esto

rati

on o

f S

ome

Cu

ts?

P

ossi

ble

Res

tora

tion

of

Som

e C

uts

?


17

For More Information:

Center for Tax and Budget Accountabilitywww.ctbaonline.org

Ron Baiman, Ph.D.Director of Budget and Policy Analysis(312) [email protected]

Yerik KaslowResearch Associate(312) [email protected]

Ralph M. MartireExecutive Director(312) [email protected]

Fu

rth

er I

nfo

rmat

ion

Fu

rth

er I

nfo

rmat

ion

© center for tax and budget accountability 2011 1 center for tax and budget accountability 70 e....

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