Illinois is facing major threats to its ability to provide basic public services, such as investing in children and teachers and caring for the needy, a report released Tuesday by the State Budget Crisis Task Force shows.

The task force, co-chaired by former New York Lt. Gov. Richard Ravitch and Paul Volcker, a former Federal Reserve chairman, warns further cuts to human services in particular could cause a cascade of future problems for Illinois and other state governments.

At least one expert who analyzes the impact of fiscal policy on children and working families in the state said the report is a warning, and Illinois should “heed the call.”

Over the past three years, human services and education in the state have seen significant cuts, said Larry Joseph, director of the Fiscal Policy Center at Voices for Illinois Children. 

Those hit the hardest include mental health providers, after school and preschool programs and child protection services, among others, he said. In Illinois’ 2013 budget, nearly $25 million in cuts were made to pre-kindergarten programs.

Payments have also been delayed to service providers from 2009 to 2012, resulting in 18,000 fewer children having access to preschool in the state, Joseph said.

Some of these programs and services aren’t very expensive, he points out.

“We know they are cost-effective investments,” Joseph said. “We know that investment in early childhood education can yield large benefits for the future in terms of improving school readiness, increasing success in school and economic success in adult life.”

The report highlighted six fiscal sustainability risks that could worsen Illinois’ ability to provide for children and families, along with investing in the state’s infrastructure.

Those threats include Medicaid spending, an eroding tax base, underfunded retirement promises and state budget laws that cover up instead of fixing imbalances, among others.

In addition to Illinois, the task force also looked at the fiscal sustainability in California, New Jersey, New York, Texas and Virginia.  The task force is expected to release separate reports for each state in the upcoming months.

The six states in the study have similar problems, but Illinois is different in a number of ways, Joseph said.

First, being the state’s pension obligations, he said.

Retirement systems across the country are underfunded, but in Illinois “it’s the worst,” he said.

“We knew that already,” he added.

Illinois also has a huge backlog of unpaid bills, and there are long payment delays to various types of service providers, he said.

During the spring legislative session, the General Assembly worked to reduce the Medicaid backlog by about two-thirds or $1.3 billion. The non-Medicaid backlog was reduced by about $264 million, but Joseph says that’s not enough.

“Very little was done this session to address the non-Medicaid backlog.”

Joe Persky, professor of economics at the University of Illinois at Chicago, said there is no doubt Illinois is in trouble, but overall the report is “yesterday’s news.”

Once the federal government can solve health care in a “serious way instead of a mishmash way,” all of a sudden these “state issues become manageable,” Persky said. 

Although the report does not offer specific solutions to fixing the state’s fiscal issues, it does provide some recommendations, which include making government more transparent, making better use of rainy day funds and moving away from cash-based budgeting. 

Persky said Illinois needs a rainy day fund.

“You tell politicians you want a rainy day fund, and they’ll look at you like you’re crazy,” he said. “It’s really hard to convince the politicians that that’s a good political strategy.”