Human Services in Hard Times: State Budget Deficits Threaten the Most Vulnerable Among Us

Government-funded human services are
defined in specific terms in relation to statelevel
administrative structures and the state’s
annual budget. These services do not technically
include significant portions of the budget
devoted to health care and education.
Human services—thus narrowly defined—
are primarily delivered by the Department of
Human Services (IDHS), Department of
Children and Family Services (IDCFS),
Department of Aging (DoA), Department of
Public Health (IDPH), and the Department of
Veterans Affairs (IDVA). When defined in this
manner, human services account for over
23% (over $6 billion) of the current fiscal
year’s (2010) State Operating Budget. Moreover,
county and municipal funding for
human services is relatively minimal.
Human service-oriented state departments
and the contracted nonprofit agencies
that most often deliver these services are particularly
financially endangered during the
current recession due to either budget cuts
or delayed payment for services. It’s important
to understand why this is the case, as
these services are delivered to many of the
most vulnerable among us: the physically
and developmentally disabled, the elderly,
poor children, at-risk youth, the mentally ill,
and those in need of addiction treatment.
Two major economic factors determine
our current predicament of enormous budget
shortfalls: the recession caused by the speculative
housing bubble and stock market crash
and consequently lowered state revenues
(income tax and sales tax); and the long-term
structural deficit of our state’s taxation system.
This structural deficit reflects the decadeslong
disappearance of at least 200,000 wellpaid
manufacturing jobs and overall stagnant
wages—as well as the dysfunctional flat, low,
and regressive state income tax.
According to the Center for Tax and Budget
Accountability, we have experienced a
decade-long real decline in almost all state
services other than health care, when adjusted
for both inflation and population growth.
For human services, this has been on the
order of 12% since 2002. In that year, for
example, Illinois already ranked 31st nationally
in per capita funding for both mental
health and developmental disabilities.
The federal American Recovery and
Reinvestment Act (ARRA), also known as
the stimulus bill, has largely neglected funding
for human services as defined above. Of
the $700+ billion national program, $140
billion over a 2-year period is specifically
devoted to addressing budget shortfalls
experienced by 48 states (all except Montana
and North Dakota). Illinois’ portion of
that total is $10.5 billion, equaling about
40% of our state’s shortfalls for combined
fiscal years 2010 and 2011. At least 80% of
that funding is specified by law for health
care, education, and employment security.
In contrast, funding specified for IDHS,
IDCFS, and DoA totals $174 million, or
1.6% of total ARRA grants devoted to closing
our state deficit. This 1.6% is in sharp
contrast to the 23% of the budget that is
devoted to human services. The human
consequences of these cold facts are clear
when one reads in the newspaper about the
struggles of local government agencies and
nonprofit organizations to not only deliver
services, but to fiscally survive.
According to the Social Impact Research
Center at the Heartland Alliance, almost
2,600 nonprofit organizations deliver at least
$5 billion of human services ranging from
emergency assistance to the homeless, to
mental health crisis intervention, to youth
development, to residential and day care for
the disabled. Of these, the majority has
annual revenues of under $500,000 and 307
have revenues of less than $50,000. According
to the same study, these organizations are
lean, efficient, effective, and accountable.
Once nonprofit organizations shut their
doors, they are not easily re-constituted at a
later date, even if funding is made available. he infrastructure is gone, and their skilled
employees have moved on. The needy and
vulnerable are left to fend for themselves,
often in hospital emergency rooms or prisons,
if not on the street. Meanwhile, the
unemployment of human service workers
contributes to decreased economic demand
and the tenuous nature of our so-called
recovery. The structurally vicious and
heartless cycle continues, in both economic
and human terms—all in the name of an
emphasis on deficit reduction that is profoundly
misguided and counterproductive
in terms of both fundamental economic
theory and humane values.
Since 2008, the federal government has
infused trillions of dollars to “save” the financial
system—Wall Street and the major
banks. The $787 billion stimulus package
was, in comparison, a drop in the bucket,
both in relation to the financial bailout and
the need for $2 trillion of heightened consumer
demand. In that context, funds directed
at human services have already divided
this drop several times over. Given these realities,
it is incumbent upon our state officials
and legislature to act decisively to address
both immediate needs and the long-term
structural deficit. It is difficult to understand
inaction in the face of both dire necessity and
clearly available solutions. Given the understanding
and political will, our state can easily
move from being the worst example to the
best. The leadership, however, will likely
have to originate at a popular level with what
is currently described by the mainstream
media as “populist anger.”