Quick Hit Ellyn Fortino Wednesday December 3rd, 2014, 5:34pm

Report: Illinois State Revenue Drop Could Harm Homeless Prevention Efforts

An expected drop in next year's state revenue could spell trouble for an important Illinois homeless prevention program and other crucial supports if Springfield lawmakers fail to take action, advocates are warning.

The state's 2011 temporary income tax increase is slated to sunset starting in January, resulting in a more than a $2 billion revenue decline in the current fiscal year, according to a new analysis by the Fiscal Policy Center at Voices for Illinois Children. In the next fiscal year, state revenue could fall by about $5.4 billion if the tax hike isn't renewed, according to the group.

If the income tax hike expires as planned, legislators might be forced to cut funding for anti-homelessness and other non-mandated programs by an average of 25 percent in order to balance the budget for fiscal year 2016, which begins in July, the center's analysis shows. Average cuts could reach 33 percent if the Illinois Supreme Court strikes down the state's 2013 pension reform overhaul, which is expected to save $1 billion next fiscal year.

The Illinois Homeless Prevention Program, which provides work supports, financial counseling and one-time rental or utility assistance to keep people in their homes, has already seen its funding slashed by 64 percent since 2008, despite an increase in homelessness. As a result, 8,500 fewer families received homeless prevention assistance from 2008 to 2013, according to a recent report by Voices for Illinois Children's Fiscal Policy Center in collaboration with the Chicago Coalition for the Homeless and Housing Action Illinois. During the same time period, the state's homeless student population ballooned from about 26,000 in 2008 to more than 59,000 in 2013. 

Another 1,000 Illinois families facing homelessness could be shut out of the state's Homeless Prevention Program, which helped 3,818 Illinois families last year, if funding is further reduced by 25 percent, the groups estimate.

"These budget cuts couldn't come at a worse time for our state," stressed Lisa Christensen Gee, policy analyst at Voices for Illinois Children's Fiscal Policy Center. "While the funding for the program in particular has been cut by over 60 percent, you have homelessness increasing among the student population, which we use as a kind of metric to gauge what's happening in the larger homeless population, by almost 221 percent. At the same time, you have additional pressures that families face in metropolitan areas, particularly in Chicago and in the suburbs, finding affordable housing." 

A separate report recently released by the National Center on Family Homelessness showed there were more than 98,000 homeless children in Illinois last year, up from 83,420 in 2012 and 75,443 in 2011. At the national level, 2.5 million U.S. children were homeless in 2013, representing a record high.

"When families do not receive homeless prevention funds, they often end up in a shelter or 'doubled-up' with friends or family," Jennifer Cushman, policy specialist at the Chicago Coalition for the Homeless, stated in the Illinois homeless prevention report. "Families often shuffle, with kids, from one temporary situation to another. During this time the children suffer the trauma of an ongoing family crisis of stress, fear, and uncertainty. Homeless prevention funding can keep a family in their home and prevent this upheaval and trauma."

A further reduction in homeless prevention funding will "ultimately cost the state much more later on," the organizations argue.

The average grant a family receives through the homeless prevention program is $1,000, with the funds going directly to landlords, utility companies or services providers. By comparison, it can cost at least $20,000 each year to house a family in a shelter.

Meanwhile, 88 percent of the Homeless Prevention Program's participants who received assistance last year retained their housing, the report noted.

"At a very low cost, we can prevent a lot of the disruption and harm that happens to children in these families," Christensen Gee said. "And it also saves the state a lot of money ... So it really just is smart policy to prevent homelessness in the first place."

Springfield lawmakers, she added, need "to ensure that our state has the revenue that it needs in order to invest in its priorities."

"It would be very difficult to find the amount of revenue we lose to the rollback of the income tax through other measures, so the income tax is part of the solution and part of the issue that needs to be addressed," Christensen Gee stressed.

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