Illinois’ reputation, nonprofits could suffer from budget impasse

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Illinois has entered uncharted territory when it comes to the state budget impasse. No state in the country has ever gone a full year without passing a spending plan.

The Civic Federation, a non-partisan government watch group based in Chicago, believes the long-term damage being done to Illinois’ reputation is immesurable.

“By not having a budget, it doesn’t mean we’re not spending money,” says The Civic Federation President Laurence Msall. “We are spending money, the federal and state courts are saying we have to continue to spend money on federal programs, the Medicaid program and continue to pay the state employees according to a state judge and so there’s a lot of expendutures going out and no new revenue coming in to balance against that.”

Msall says the immediate ramifications will be felt hardest in social service programs. Many small nonprofits in the state have already closed down, due to a lack of funds. Their workers have been laid off and clients, in need of social services, are going without the help.

The impact on education will be the most widely seen across the state.

Districts heavily reliant on state funding, like Chicago Public Schools, will have a hard time opening for the new school year. One option is to pass a separate spending bill that will provide funding.

Higher education is also deeply impacted. Msall says state universities and community colleges are receiving only 40 percent of what they normally would expect from the state and there are questions of whether scholarship money will be paid.

In the end, it’s the state’s reputation with residents and business that could cause the worst long-term ramifications.

“When you don’t have a budget, when you’re constantly in a state of financial chaos, when you’re paying more than any other state for borrowing,” says Msall, “you’re sending the exact wrong message to citizens and businesses.”