Last Friday, Gov. Pat Quinn laid out in broad terms his plan to divvy up $3.4 billion (PDF) in state appropriations to cover state services over the next year.  While the picture he painted wasn't as severe as the 50 percent budget scenario floated earlier this summer, the spending reductions are sure to cause a good deal of pain among non-profit providers, particularly those who are still owed payments for last year's budget.  Yet the uncertainty isn't quite over for the individual agencies that have been waiting for this process to shake out since the new fiscal year began on July 1.  At the moment, they are expecting to receive their contracts from the state by the end of the week.  Once those have been delivered, we'll be able to track the full effect of these cuts.

During a roundtable discussion on WTTW's Chicago Tonight yesterday, leaders from some of the state's largest social service providers emphasized how the state's failure to cover prior payments has weakened their financial foundation considerably.  "I'll tell you about our rainy day fund. It's the fund that we've been digging into constantly for several years," said Lutheran Social Services director Dan Schwick. "Our COO advised me today that we sold more of the seed that's supposed to be growing our programs, and we're using it for the actual operations to preserve services today ... In last fiscal year we spent close to $100,000 in interest on lines of credit." "Because the state hasn't paid you," co-host Carol Marin asked. "Exactly," Schwick answered.

Nonprofits have been working with Illinois' dysfunctional government for decades. But with the state's finances -- and leadership -- clearly off the rails, Lutheran Social Services is contemplating cutting its ties with the state. That would cut deeply into services provided to 70,000 residents by one of the state's most historic and respected organizations. "We're under a mandate with our board of directors to see if we can continue to contract with the state," Schwick said on air yesterday, "because the state has been an unfaithful partner for so long."

Because human services have been aggressively outsourced to save money, reducing these grants sets a dangerous precedent. As Anthony Cole of the Illinois Alcoholism and Drug Dependency Association explained during the WTTW segment, turning the funding spigot off now will ultimately cost Illinois taxpayers more  in the long run. "We cannot afford to ignore these problems,"  he said.

For more on the situation facing Illinois' social service providers, read Doug Schenkelberg's blog post from today, as well as this new brief (PDF) from the Sargent Shriver Center on Poverty Law.  You can watch the full WTTW segment below: