Gov. Bruce Rauner faces an immediate test of his ability to work through the challenges of running cash-strapped Illinois now that the state has run out of money for a popular subsidized day care program.
The Department of Human Services announced recently that it's short nearly $300 million needed to pay for the day care program through June -- the end of the budget year -- and payments will be late starting this month.
Funding hiccups are nothing new to providers, who have become skilled at raising alarms to try to force action in Springfield. But this time is different, some say, because of the uncertainty about the new governor -- a Republican who has declared that solving the state's money problems will require "sacrifice" from all Illinoisans.
"Every year we go through something, but we're able to rally and say this is important, and then the funding comes," said Grace Araya, director of Eyes on the Future Child Development Center in Rogers Park. "We don't really know where we stand. We don't know which way this will go."
Rauner's human services agency has said that state payments to the program will stop "unless a responsible solution and appropriate funding source is found." Federal money will allow the program to keep operating, but without state funds there won't be enough to pay all the bills until the state figures out how -- or if -- to come up with its share.
"Unpaid bills will be carried over to the next month, and payment delays will get progressively longer each month," the department warned Thursday in a letter to parents and providers.
The shortfall is rooted in the budget the Democratic-led General Assembly and then-Democratic Gov. Pat Quinn passed in the spring. The spending plan was widely viewed as not having enough money to get through a full year because the state income tax rate was scheduled to start rolling back Jan. 1.
Ordinarily, lawmakers would have taken up the budget shortfalls after the election, but Rauner asked them not to do anything substantive in the lame duck session. That left the new governor with a series of immediate financial challenges, with the Illinois Department of Corrections also in danger of running out of money to pay overtime for prison guards.
Asked Thursday about his plans for the day care program, Rauner blamed Quinn for the problem and said he was working on it but would not provide a time frame or specifics.
"Working closely with the General Assembly, we are going to make sure that we do the reallocations necessary to make sure the essential services of government stay open and functioning," Rauner said.
For the estimated 100,000 low-income families who rely on the discounted day care rates, any cuts or delays seem unreasonable.
"If we don't have child care, we cannot work, so that only makes a bad situation worse," said Katrina Williams, 24, a South Side mother of one who works two jobs but says she still can't make ends meet. "Child care is expensive, and we don't make the money to pay for it out of our pocket. It doesn't happen like that over here."
While there is no indication of widespread day care closures now, providers have warned their clients that closures are possible if the situation goes on too long.
"Because we don't have any sense of what the plan is, people just do the math and say, 'If they're not going to pay me, I can't continue to provide care,' " said Maria Whelan, president and CEO of Illinois Action for Children, which administers the subsidy program in Cook County.
The shortfall is forcing providers like Eyes on the Future, which serves 285 low-income children, to get creative. Araya said the day care center is looking into taking out a line of credit to make it through the budget year.
Others said they are frustrated with what they see as a constant cycle of being caught in the politics of the state's financial struggles.
Pat Twymon, 53, has been operating a 16-child day care center out of her Calumet City home for more than 20 years. She said she has dipped into her retirement fund to get through past budget crises but indicated she won't do that this time.
"We were able to get over a couple of hurdles by doing that. But now I'm at the point where I can't do that anymore. It would just totally devastate my family to do that again," Twymon said.
Lawmakers on both sides of the aisle agree that something must be done.
"We've got a big enough budget, $35 billion, that I believe that there's ways that we can be moving dollars around to fund this," said state Sen. Heather Steans, D-Chicago. "There's ways of managing it. It just takes the will, and I think this is worth the will."
State Sen. Dave Syverson, R-Rockford blames Democrats for putting off the issue when it came up last spring.
"They passed a budget immorally that put these families at risk," said Syverson, who indicated he supports reinstating the higher tax rates temporarily. "They knew it wasn't funded properly, even with the tax in place."
Syverson thinks it will fall to Rauner to find a solution because the General Assembly won't be doing legislative work until March, which could be too late for smaller providers who don't have the cash reserves to keep operating.
"Day cares cannot wait months or weeks to get paid," Syverson said. "And so there has to be a solution, and the solution unfortunately has to be done relatively quickly because of the uncertainty that families are facing and day cares are facing."
Solving the immediate shortfall is only a first step, he said. In the next budget year, the program could see higher copay rates for parents or new limits on eligibility, he said.
The governor's office signaled as much in a memo last week.
"The costs of this program have increased above the rate of inflation and in order to save the program some cost-saving measures may have to be implemented," Rauner spokesman Lance Trover wrote.
That is likely to anger providers, who contend they already are operating on a shoestring. Eyes on the Future is paid less than $40 a day to watch 2-year-olds, less than $33 for 3- to 5-year-olds, and just over $16 for school-age kids, Araya said.
"We're working with the children and the families to prepare them for school, we're addressing issues early on," Araya said. "With the funding that you have, you're trying to provide the highest quality care in early learning as possible."
Araya said she hopes that Diana Rauner's background in early childhood education -- the first lady heads the Ounce of Prevention Fund, which provides assistance to low-income kids and families from the Chicago area -- is a sign that the new governor's pledge to tighten belts in Springfield won't apply to the day care program.
"You hope that with all this talk about early childhood being really important, you think, surely there'll be money behind it," Araya said.
Tribune reporter Ray Long contributed.
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