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Tue, 13 Jun 2017
While The State of Illinois Shrinks, Others May Grow
On July 1, Illinois will be entering its third year without a budget and there is no shortage of blame to go around for this mammoth failure of state government. But as non-political entities, we are not interested in finger pointing. We just want to be paid by the state for services that have been provided – and continue to be provided – despite the lack of a state budget.

The result of the nearly two-year old budget impasse has been numerous program cuts and eliminations, staff layoffs, and closures of human and social service agencies that provide essential and life-saving services. And looking forward, each day we don’t get paid, our ability to continue our work dims a bit more.

Survey results from 43 agencies and companies that are part of the Pay Now Illinois coalition forecast that without a budget resolution within the next six months:

• 60% expect staff cuts

• 58% expect significant cuts to programs

Without a budget in a year:

• 65% expect staff cuts

• 70% forecast program cuts

And beyond a year without a budget resolution:

• 82% expect some or significant staff cuts

• 19% forecast the possibility of shutting down.

In survey comments, plaintiffs wrote that lenders may pull back because of the state’s lost credibility, while others are struggling to figure out how to keep the lights on. One plaintiff summed up the future for his organization by saying: We are a growing business in a fast growing market with headquarters in Illinois. Based on current and projected financial outlook for Illinois we will not make any investment in jobs or expansion in the state and will make these investments in other states.

Not only does that reduce the availability of social services in the state, it means fewer jobs in Illinois, fewer taxes, empty offices, less revenue, bigger deficit.

So as Illinois shrinks, another state may grow. On Wednesday, June 14 a hearing will be held in St. Clair County Circuit Court in the lawsuit filed by Pay Now Illinois against the governor and other state officials seeking a preliminary and permanent injunction that would force Illinois to begin payments for services performed under binding contracts dating back to the start of the current fiscal year, July 1, 2016. The hearing will begin at 1:30, with Judge Robert LeChien presiding.

Posted 22:59 
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Thu, 08 Jun 2017
If the State Won't Do Its Job, Then the Courts Will
If the Governor and General Assembly won’t pass a state budget to ensure that a wide range of providers are getting paid, then it appears some Courts are willing to step in to force the issue.

The latest is the ruling from U.S. District Judge Joan Lefkow ordering State Comptroller Susana Mendoza to work with Medicaid providers to come up with a plan by June 20 to make a “substantial” dent in the $2 billion that they are owed. You can read more about it here.

That follows earlier court decisions ordering that state employees and pensions continue to be paid.

In the meantime, Pay Now Illinois is actively pursuing two separate court actions. On June 14, our suit against the Governor and others will be heard in the Circuit Court of St. Clair County. And, we are still awaiting a decision from the Illinois First District Appellate Court. We argued that case on May 4.

By the time the State finishes making court- ordered payment, less money is available for everyone else – including schools – and including us. Not only that, but we aren’t even seeing signs of a measure to provide stop-gap funding, which, for many of us, saved our organizations at the end of the last budget-less year.

Just to recap the calendar, the General Assembly – which completed its regular session on May 31 without presenting a budget to Governor Rauner – has until June 30 to try again. But now instead of needing a majority vote to pass the budget, both houses will need to pass the budget by 3/5. Get ready. On July 1 we are likely to begin our third year without a budget.

Posted 20:03 
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Sat, 20 May 2017
Civic Committee Outlines Plan for Action
Illinois businesses are pushing the State to end the budget impasse. The Civic Committee of the Commercial Club has published an extensive report on how the state can regain its financial integrity You can read the report here or, if you prefer something shorter, here is a link to the press release. Let's hope the folks in Springfield read it.

Posted 00:36 
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Wed, 17 May 2017
The Calendar Is Not Our Friend
As another effort at a Grand Bargain teeters, the calendar makes clear that time is working against a budget agreement. The State is six weeks away from the end of the fiscal year – that means Illinois is six weeks away from entering its third year as the state without a budget – a thoroughly unacceptable proposition for businesses, educators, social and human services providers and the taxpayers and clients they serve.

Here is what the calendar looks like:

Between now and May 31, the General Assembly needs a simple majority to pass a budget bill: 30 votes from the Senate, 60 votes from the House. After May 31, a super majority will be needed: 36 Senate votes and 71 House votes. The super majority requirement will exist for the rest of the calendar year. Even if a budget deal passes, it still needs the Governor’s signature. We all remember what happened the last time a state budget was sent to his desk.

In the meantime, political jockeying – especially at the gubernatorial level – is in full force. Political ads, media appearances, and rallies are in abundance and we are still 10 months from the primary.

Fast forward to January 1, 2018, and the good news is that the General Assembly returns to requiring a simple majority to pass legislation. But with the Illinois gubernatorial primary set for March 20, 2018, expectations are low that anything of significance will happen as politicians focus on getting votes; and that is likely to be their mind set until the general election.

And, then, we’re staring at another super majority vote requirement if no budget is passed by May 31, 2018. On July 1, 2018 we would be entering our fourth year as the state without a budget. Meanwhile, Illinois’ languishing bills exceed $13 billion, social service agencies are slashing programs and staffs and closing doors, universities are scrambling to stay afloat and keep students enrolled, and the state’s credit is headed to junk bond status swelling the cost of borrowing.

Unacceptable. The only way to describe the situation.

Posted 16:47 
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Thu, 04 May 2017
How PNI Spent The One-Year Anniversary Of Its Lawsuit Against State Officials
Calling Pay Now Illinois (PNI) plaintiffs “political hostages” in the nearly two-year state budget impasse, our lawyer Thomas Geoghegan today argued before the Illinois Appellate Court seeking to overturn a lower court ruling that dismissed PNI’s 2016 lawsuit in Cook County Circuit Court against the Governor and other state officials for failure to pay overdue contracts.

Geoghegan made the case that the State never tried to terminate contracts with the plaintiffs – even though the State couldn’t pay for services rendered due to the lack of appropriations – nor would the State want to because it would cause Illinois’ social service infrastructure to collapse. So, Geoghegan argued, the State is just as happy to have the plaintiffs continue providing services – such as caring for the elderly – while struggling to stay afloat using lines of credit, laying off staff and skipping pay days for senior management. The state’s behavior is “unconscionable” and represents “a complete breakdown in state government,” he said.

Geoghegan said that last year’s stop-gap funding bill amounted to “a write-down in the value of contracts,” effectively – and illegally – impairing them. He described the effect of that as, “We will keep you alive for a little bit, but we will keep inflicting the pain.”

Interestingly, the Assistant Attorney General conceded in court today that the plaintiffs do not have access to a practical remedy for their contracts in the Court of Claims absent an appropriation. Further, the Assistant Attorney General agreed that the State’s behavior is “untoward” and that there is “an element of unfairness” as a result of the budget impasse.

The judges took the case under advisement; we will let you know when a decision is handed down. In the meantime, arguments have been set for June 14 for our lawsuit in St. Clair County.

Posted 22:47 
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