What’s up with the state budget, and what’s it mean for HIV services?

(Updated 6/21/10)

Yes, we have a state budget.  Well, sort of.  Actually, it’s kinda complicated. 

Let’s break it down. 

The General Assembly passed on May 25 a state budget.  However, this budget is deeply flawed.  It doesn’t address the state’s nearly $6 billion in unpaid bills, relies too heavily on one-time revenue, and jeopardizes services for all Illinoisans.  Most importantly, legislators failed to pass new revenue, the only sustainable solution to the state’s budget problems.

How much funding will HIV programs get this year?

It’s all up to Governor Quinn.  Once again, the legislature handed off to Governor Pat Quinn nearly complete authority to allocate state funding within departments, including to HIV programs. For example, Gov. Quinn has about $99 million in state funding to divide among public health programs, which is about $30-$40 million short of current year spending and the actual need.

The legislature also gave Gov. Quinn discretionary “lump sum” funding to fill gaps and restore funding as he sees fit.  Gov. Quinn could use the discretionary spending authority to provide full funding to IDPH.

However, it’s clear that the Governor’s discretionary funding is far short of what’s needed.  The AIDS Drug Assistance Program (ADAP) alone needs an additional $9.6 million to avert looming waiting lists for medications.  An additional $7.4 million is also needed to restore HIV prevention, housing, and care programs that were cut earlier this year. Other programs in the Department of Public Health also need increases, as will programs throughout state government.

AIDS advocates will once again need to lead efforts to secure funding for core HIV, public health and human service programs. 

What do the pensions have to do with public health and human service programs?

Legislators left Springfield without making a final decision on how to pay (or not pay) the state’s legally-mandated pension contribution for state employees.  This year, Illinois owes the pensions about $3.7 $3.52 billion.  There were three options on the table: 1) pay the pensions with existing (inadequate) revenue; 2) borrow money to pay the pensions; or 3) skip the pensions altogether.  

The most potentially devastating option is number 1: pay the pensions and take the money from an already depleted revenue pool.  If this happens, the $3.8 $3.52 billion payment must come out of state general funds.  In other words, the state will be forced to cut HIV services, education, health care, human services, and everything else to make its pension payments 

Options 2 and 3 would avoid this problem.  Of the two, borrowing money is less expensive in the long-run and puts the least pressure on the state coffers. 

What’s different about this year’s budget? 

The legislature this year gave Governor Quinn extraordinary powers through the Emergency Budget Act (SB 3660).   Governor Quinn will have virtually unlimited authority to reduce program spending.  The bill also removes the guarantee of funding for all state programs (makes all state programs “subject to appropriations”).  In addition, Governor Quinn will be allowed to enact emergency rules to implement budget changes, such as cutting program eligibility, reducing payment rates, and taking other measures to lower costs.

Will there be budget cuts? 

Yes.  But we don’t know where.  On paper, this year’s budget level-funds most programs.  However, the Emergency Budget Act (SB 3660) allows Gov. Quinn ability to delay spending in case revenue projections aren't met. Some have estimated that $300 million in spending will be delayed.

In addition, the legislature made no plans to come up with funding to pay $6 billion in unpaid bills.  In fact, this backlog may increase.  Funded agencies should expect continued payment delays in the year ahead.

What about revenue? 

The legislature failed to pass a much-needed, comprehensive, balanced revenue solution that would protect critical health and human services priorities.  New revenue would help Illinois begin digging out of the massive budget hole.

Instead, the state will only fall deeper into debt through $3.1 billion in unsustainable, one-time fiscal tricks.  These include selling bonds financed by the tobacco settlement, which will significantly reduce future funding in return for short-term cash, borrowing from special funds and a tax amnesty program.  A bill to institute a cigarette tax (SB 44) cleared the Senate but did not have the votes to pass the House.  It would have raised over $300 million on an ongoing basis. 

What happens next?

First, the General Assembly must figure out how to resolve the pension payment issue.  Attention will focus on the Senate, where a bill to sell bonds to fund the pension payments is several votes short.  Governor Quinn has said he’ll call the Senate back to Springfield in June.

Next, Governor Quinn must decide how to allocate funding to essential programs, including the AIDS Drug Assistance Program, and HIV housing, care, corrections, and prevention programs.  These allocations should be made by July 1, the start of the new fiscal year. 

What can you do?

Stay tuned for advocacy resources from AFC, including a petition to the Governor, and individual and organizational sign-on letters.  Please respond by signing on and taking action as needed!  Your voice is as important as ever to ensure that Illinois takes a leadership role in the fight against HIV/AIDS.

Finally, get ready to advocate for new revenue.  Illinois must institute a modest tax increase along the lines of House Bill 174 to secure the state’s fiscal future and safeguard vulnerable individuals, including people with and at risk of HIV. 

Other resources:

Learn more about the state budget crisis

Learn more about the AIDS Drug Assistance Program

Voices for Illinois Children budget Q & A

Center for Budget and Tax Accountability estimated deficit (updated 6/9/10) 

Main Budget Bill (HB 859)
 
Emergency Budget Act (SB 3660)