The Illinois Appellate Court has dismissed human services providers’ case seeking to be paid for work performed under legal and binding contracts, directing the Pay Now Illinois plaintiffs – and all unpaid Illinois vendors – to the Illinois Court of Claims.

We have been to the Court of Claims. We know. This is not a solution.

Lapsed Appropriation vs. No Appropriation

It’s important to understand how the Court of Claims operates. According to its website, the Court has consistently interpreted its responsibilities under the law as hearing claims that result from a “lapsed appropriation". A lapsed appropriation is an appropriation that has expired.

But if an appropriation never occurred, can it expire?

This may seem like a philosophical conundrum along the lines of the sound of one hand clapping. Except what we are talking about here is real world urgency. It is not clear on what basis the Illinois Court of Claims would even agree to hear our cases because doing so would require them to dramatically re-interpret the law from what they have done in the past.

Time & Money Raise the Stakes for Providers

Both the length of time the Court of Claims process takes, and the magnitude of the unpaid bills prevent the Court of Claims from being a practical or meaningful remedy for providers.

In ordinary times, the Illinois Court of Claims is notoriously slow; providers have routinely waited years for any kind of hearing. For example, my own organization has had a claim pending in the Court of Claims since September 2015. We have heard nothing for nearly two years. Because this claim is for less than $10,000, we can operate without the missing funds while waiting for our award.

But these are not ordinary times.

Approximately 8,500 cases are filed with the Court of Claims against the State of Illinois annually, ranging from personal injury to awards to victims of violent crime. The Court has seven judges and 16 part-time commissioners who adjudicate these cases. Imagine the backlog that would occur if all providers were to file with the Court of Claims for each unpaid contract AND the Court of Claims agreed to hear each case. The Court would be deluged, and the backlog would be incomprehensible. It is one thing to wait two years for $10,000 to resolve a clerical error; it is another thing entirely when a provider is waiting for payment of a year or more’s worth of work.

A Circular Process: Ending Where We Started

Even when a Court of Claims case is successfully adjudicated, that’s not the end to the process. Providers must wait for the General Assembly to pass new legislation – appropriating funds – to pay the claims awarded by the Court. Payment cannot be processed until the bill is signed into law by the governor.

And that’s why it’s absurd.

The whole reason we are in this disaster now is because the General Assembly and the Governor cannot agree on a budget, which is another word for an appropriations bill. We would not be in this situation if they would fulfill their Constitutional duty and pass a budget that could be signed into law. It is ridiculous and unconscionable that providers would have to trudge through an unclear and overburdened Illinois Court of Claims process simply to end up back where we started – waiting for our elected officials to do their jobs.

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.

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.

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.

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.