70 East 70 East Lake Street, Suite 1700

Chicago, IL • 60601
www.ctbaonline.org

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 human
services should have received on average approximately $169 M more per year to
account for population growth. Together these two shortfalls imply that Illinois
human services would have received about $ 4.4 B more funding over this period had
the 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, and
Human Services, that together directly or indirectly fund most human services provided in
Illinois. Many critics of public spending complain that these appropriations seemingly increase
every year, which they claim demonstrates irresponsible, profligate spending. Although these
critics are correct when pointing out that appropriations tend to increase annually in nominal
dollars, that alone tells very little about whether spending is truly increasing or not, because it
misses two crucial factors—the impacts of inflation and population growth. Although all three
departments 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, which
increases the demand for human services, is taken into account.
 Figure 1: Annual G
(i
• 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 in

FY
real terms spending on a particular service has actually increased, merely kept pace with
inflation, or decreased. To use numbers to illustrate this point, if it cost $100 to provide a
service in year one, and inflation increased by five percent over the year, then buying the same
level of services in year two would cost $105. Anything less would not pay for continuing the
service 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 an

Aging
average of $385.1 million per year in real, inflation adjusted terms. In other words, human
services 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 real
terms Illinois is spending significantly less on human services today than it did eight years ago.

Children and
Family Services
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.

Human Services
 Figure 2: Human Serv
(in m

FY200
Total Human
• The cost of human service provision also increases as the state’s population increases
as is shown in Figure 3 and 5 below. The Illinois Department of Commerce and Economic

Services
Opportunity estimates that the state’s population will increase by 6.7% from 2000 to 2010.2
This translates into a yearly population growth rate of 0.65%. Assuming that the costs of
providing human services to this increased population grow at the same rate, human costs
would have required approximately $1.4 B over this period to maintain services at FY2002

Appropriations in
levels at the level relative to the increased state population.3

Current $ $4,971

MWCPI
2
See: http://www.commerce.state.il.us/dceo/Bureaus/Facts_Figures/Population_Projections/

Real Value of
3
Though there may be some “economies of scale” in human service provision, as overhead can be spread over larger
participant pools, as most of the cost of services is based on direct care, a proportional increase with population growth
is a justifiable rough estimation assumption. What is not subject to dispute is that real costs will go up as needs
increase with increased population.

2002 3
Figure 3: Human Serv
(in m

FY200
• Adding the inflation, and population growth, shortfalls together, we estimate that
maintaining Illinois human services at an FY 2002 service level relative to inflation and
relative to the state’s population growth would have required an approximately $4.4 B increase

Real Value of
in funding over the FY2003 to FY2010 period. This is shown in Figures 4 and 5 below.

Figure
2002 4: Total Human
Appropriation in (in m
Current $ based
on MWCPI $4,971
FY200
MWCPI
Total Human
Population
4
 Fi
Ser

$0
FY03
2) In FY 2002 Illinois was Already Under-funding Human Services Relative to Other
States

• th th
In Fiscal Year 2002, Illinois ranked 35 and 40 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 income
would have required funding increases of 82% and 65% respectively for MH and DD services,
respectively.5

4
($100)
“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 and
Public Affairs, March 2007, Table 1, p. 32, and Table 6, p. 35.
5
Op. Cit., p. 32 and p. 36.

5
 • 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 spending
increases of 29% and 34%, respectively.6

• In Fiscal Year 2002, Illinois ranked 31th in per-capita funding of services for Mental
Health (MH) and Developmental Disabilities (DD), two of the largest categories of human
services compared to other states.7

3) In FY 2002 and FY 2004, Community Based Residential DD services were

particularly Under-funded in Illinois.

• In FY2002, Illinois ranked 6th in per-income, and 8th in per-capita, in institutional

funding, but 40th in per-income, and 42th 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 DD
residential services was close the national average, it was disproportionately delivered through
institutional care.9

4) In FY 2002 Many Fewer Illinois Residents received Mental Health Services than
the 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 the

Developmentally 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 employment
services 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. 15
10
Op. Cit., p. 16 also see Table 8, p. 37.
11
Op. Cit. p. 16, also see Table 9, p. 37.

6
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 %3.0
from FY2004 to FY2006 giving Illinois a rank of 39th in its change in funding effort over this
period leaving the state at 40th in its overall ranking for DD funding relative to personal income
in FY2006.12

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

• Again, this low ranking was mostly driven by Illinois’ DD community service
funding ranking of 43rd. The state ranked 9th 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.