CTBA Human Services Fact Sheet

8/14/2019 CTBA Human Services Fact Sheet

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DRAFT NOT FOR PUBLIC DISTRIBUTION

Fact Sheet on Illinois Human Service Funding

1) From FY 2003 through FY 2010, Illinois cut human services funding by an annual

average of $ 385 M, after adjusting for inflation. Over the same period humanservices should have received on average approximately $169 M more per year toaccount for population growth. Together these two shortfalls imply that Illinoishuman services would have received about $ 4.4 B more funding over this period hadthe State maintained real per-capita appropriations at FY 2002 levels.

Most taxpayers do not realize that state government provides very few human service programs directly. Instead, the state contracts with private sector providers, that in turn deliver the services. Hence, spending cuts on human services fall on private sector workers and

businesses, hurting local economies statewide. Figure 1 shows annual General Fund appropriations in millions of current, non-inflation adjusted dollars for the Departments of Aging, Children and Family Services, andHuman Services, that together directly or indirectly fund most human services provided inIllinois. Many critics of public spending complain that these appropriations seemingly increaseevery year, which they claim demonstrates irresponsible, profligate spending. Although thesecritics are correct when pointing out that appropriations tend to increase annually in nominaldollars, that alone tells very little about whether spending is truly increasing or not, because itmisses two crucial factorsthe impacts of inflation and population growth. Although all threedepartments have increased in current, or nominal, dollars, as will be shown below this is not

true when inflation is taken into account. It is also not true when population growth, whichincreases the demand for human services, is taken into account.

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Figure 1: Annu

AgingChildren and

Family Services

Human Services

As prices for inputs such as labor, insurance, utilities, gas and health care increase,the cost of providing a given level of human services increases. Hence, any evaluation of

public spending over time must be adjusted to account for inflation, to determine whether inreal terms spending on a particular service has actually increased, merely kept pace withinflation, or decreased. To use numbers to illustrate this point, if it cost $100 to provide aservice in year one, and inflation increased by five percent over the year, then buying the samelevel of services in year two would cost $105. Anything less would not pay for continuing theservice at the same level.

Using the Midwest Consumer Price Index (MWCPI) published by the U.S. Bureau of Labor to estimate the impact of inflation on human services costs in Figures 2 and 5 below. 1

These Figures show that from FY 2003 to FY 2010, Illinois cut human services funding by anaverage of $385.1 million per year in real, inflation adjusted terms. In other words, humanservices would have received $ 3.1 B more funding from the state General Fund over this

period had appropriations just kept up with inflation after FY2002. Put another way, in realterms Illinois is spending significantly less on human services today than it did eight years ago.

1 This generally will result in more conservative estimate of inflation than that provided by the Employer Cost Index(ECI) which measures the increased costs of labor, the largest component of human service costs, over time.

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Figure 3: Human S(i

Real Value of

2002Appropriation inCurrent $ basedon MWCPI

Population

Adding the inflation, and population growth, shortfalls together, we estimate thatmaintaining Illinois human services at an FY 2002 service level relative to inflation andrelative to the states population growth would have required an approximately $4.4 B increasein funding over the FY2003 to FY2010 period. This is shown in Figures 4 and 5 below.

Figure 4: Total Hu (i

Total Human4


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S

02) In FY 2002 Illinois was Already Under-funding Human Services Relative to OtherStates

In Fiscal Year 2002, Illinois ranked 35 th and 40 th respectively in funding services for Mental Health (MH) and Developmental Disabilities (DD), two of the largest categories of human services, compared to other states. 4

In FY 2002, moving to the top ten of states in spending relative to personal incomewould have required funding increases of 82% and 65% respectively for MH and DD services,respectively. 5

4 State Funding of Community Agencies for Services Provided to Illinois Residents with Mental Illness and/or Developmental Disabilities, Elizabeth Powers, Nicholas J. Powers, David Merriman, Institute for Government andPublic Affairs, March 2007, Table 1, p. 32, and Table 6, p. 35.5 Op. Cit., p. 32 and p. 36.

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In FY2002 achieving a median level of funding (a ranking of 25 among the 50 states)for MH and DD services relative to state personal income would have required spendingincreases of 29% and 34%, respectively. 6

In Fiscal Year 2002, Illinois ranked 31 th in per-capita funding of services for Mental

Health (MH) and Developmental Disabilities (DD), two of the largest categories of humanservices compared to other states .7

3) In FY 2002 and FY 2004, Community Based Residential DD services wereparticularly Under-funded in Illinois.

In FY2002, Illinois ranked 6 th in per-income, and 8 th in per-capita, in institutional funding, but 40 th in per-income, and 42 th in per-capita, in community spending for DD services. 8

In FY 2004 nearly 75% of all sate spending in DD residential care was for non-community living arrangements. Though the proportion of Illinois residents that received DDresidential services was close the national average, it was disproportionately delivered throughinstitutional care. 9

4) In FY 2002 Many Fewer Illinois Residents received Mental Health Services thanthe National Average

In FY 2002 only 1.2% of Illinois residents received MH services compared to 2.0%nationally. 10

5) In FY 2002 Illinois Provided About Half of Non-Residential Services to theDevelopmentally Disabled Compared to the National Average

In addition, in FY 2002 a far smaller share of Illinois residents received non-residential services than nationally. For example only 0.02% in Illinois received employmentservices compared to 0.04% nationally. 11

6 Op. Cit., Table 2, p. 32 and Table 7, p. 36.7 Op. Cit., Table 1, p. 32, and Table 6, p. 35.8 Op. Cit. Table 6, p. 35.9 Op. Cit. , p. 1510 Op. Cit., p. 16 also see Table 8, p. 37.11 Op. Cit. p. 16, also see Table 9, p. 37.

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6) From 2004 to 2006, Funding Effort for DD Services Continued to Lag that of Other States

In particular funding per $1000 personal income for DD services declined by %3.0from FY2004 to FY2006 giving Illinois a rank of 39 th in its change in funding effort over this

period leaving the state at 40 th in its overall ranking for DD funding relative to personal incomein FY2006. 12

Thus in FY 2004 Illinois ranked 41 st, and in FY 2006 Illinois ranked 40 th, in overallfunding for DD services relative to personal income among the states .13

Again, this low ranking was mostly driven by Illinois DD community servicefunding ranking of 43 rd. The state ranked 9 th in institutional service funding in FY 2004-2006. 14

12 The State of the States in Developmental Disabilities, by David Braddock , Richard Hemp, and Mary Rizzolo,American Association on Intellectual and Developmental Disabilities, 2008, Table 17, p. 58.13 Op. Cit., Table 18, p. 59.14 Op. Cit.

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