Vendors react to Quinn’s minimum wage action
January 16, 2015 1:36 pm • Kurt Erickson Times Bureau
SPRINGFIELD — Although Gov. Bruce Rauner may try to reverse it, a last-minute maneuver by former Gov. Pat Quinn to boost the minimum wage could have wide-ranging effects across the state.
UPDATE: Governor Rauner announced late Friday that he has rescinded this and many other recent Quinn executive orders.
In the final minutes before he left office Monday, Quinn issued an executive order requiring a $10-an-hour minimum wage for all vendors and state contractors.
That could mean everyone from a dishwasher at one of the state’s privately operated park lodges to a teenager hired to staff the canoe rental booth at a state park could see a raise from the current minimum wage of $8.25 an hour.
It also could mean raises for entry-level workers who provide assistance to the elderly and disabled through various nonprofit organizations that are paid by the state.
At the ARC of Illinois, which represents a coalition of organizations serving developmentally disabled residents, the higher wage could be a mixed blessing, Executive Director Tony Paulauski said.
On one hand, it could help lure new workers in a competitive labor pool. By contrast, it will cost the groups more to do business, he said.
That’s why Paulauski and others are working with lawmakers to try to boost the reimbursement rates organization receive from the state to offset the higher wage.
Don Moss, executive director of United Cerebral Palsy of Illinois, said the higher costs could be a final straw for some vendors.
“To impose this added financial burden without increasing the rates would be a severe blow to the system,” Moss said.
Mary McGlauchlen, associate director of Central Illinois Service Access, said some of the providers could face serious financial hardship.
“For some of them, it could put them out of business,” she said Friday.
Quinn’s action came after he failed to convince the Illinois House to join with the Senate to raise the minimum wage for all state residents, even after Illinois voters approved an advisory referendum in November calling for an increase in the minimum wage.
Quinn’s move mirrored one by President Barack Obama, who took executive action to boost the minimum wage for federal contractors.
The governor’s action affects only pending or new contracts with vendors.
Republican Bruce Rauner, who took over as governor on Monday, said he is considering rescinding his Democratic counterpart’s move, which was among a flurry of 11th-hour actions Quinn took before his term ended.
“My bias is to take action to undue pretty much everything that Governor Quinn did since the election,” Rauner told reporters earlier this week. “Every time we look, most of it’s bad.”
Rauner offered no timetable for a decision.
“We’ll deal with that in due course,” Rauner said.
Thanks to Tony Paulauski of The Arc of Illinois – from the Southtown Star
Cutting the fat out of the state budget is likely to mean cutting programs that help the homeless, battered women and the developmentally disabled.
When Gov. Bruce Rauner talked about freezing nonessential state spending in his inaugural address, the people heading social service agencies across the state understood that likely meant that their budgets are going to take a hit.
“We’ve been concerned since Jan. 1 since the (state) income tax increase rollback,” said Julie Dworkin, director of policy for the Chicago Coalition for the Homeless.
One program likely to lose funding is homeless youth prevention, Dworkin said, which is not mandated by state law or court order.
The state provides millions of dollars for emergency shelters and transitional housing for children, allowing them to remain in school, keep their jobs or seek employment from a stable environment. Dworkin said her agency provides assistance for about 2,500 homeless youths in the Chicago area.
A study by the coalition last year revealed that there were 22,144 homeless students in the Chicago Public Schools, an increase of 18.6 percent over 2012. Of that number, 98 percent were minority children, and 20 percent were diagnosed with disabilities or developmental delays.
Tony Paulauski, executive director of The Arc of Illinois, which advocates on behalf of thousands of disabled people and families in Illinois, said budget cuts could have an impact on group homes and community services for the disabled, as well as respite care for the families of the disabled.
“By respite care, we’re talking about workers who come to a home a few hours a day so that the primary caregiver of a severely disabled adult or child can go to the grocery store and buy food or just take a break from caring for a family member,” Paulauski said.
“That’s not a state mandate. But it is an essential program to allow people to continue caring for family members in their homes, which is far less expensive than putting them in a state institution or nursing home,” he said. “Of course, we’re concerned about any freeze on spending because of the state about to lose billions of dollars in revenue due to the income tax rollback.
“Many of our service providers are going to either lay people off or go out of business if the state cuts spending to them. This is going to result in a cut of the safety net for people who are trying their best to help disabled family members.”
Thresholds, a private service provider that assists more than 7,000 severely mentally ill people in Cook, McHenry and Kankakee counties, is another agency sweating out Rauner’s budget decisions.
“(Illinois House) Speaker Michael Madigan has projected a $5.7 billion revenue shortfall in fiscal 2016 if the income tax increase is not restored or other revenue created,” said Heather O’Donnell, vice president of public policy and advocacy for Thresholds. “We already suffered a funding cut for mental health of $117 million between fiscal years 2009 and 2013.”
She said it costs the state $10,243 a year to provide community-based care to a seriously mentally ill person as opposed to $31,400 in a nursing home or $69,359 at the Cook County Jail.
“And that’s where people end up when you cut funding to community-based mental health programs,” O’Donnell said. “They end up in jail. They end up homeless. They end up in nursing homes. They end up cycling repeatedly through hospitals, costing the state millions of dollars more than it would have cost to provide community-based treatment.
“With treatment and counseling,we know these people are capable of leading productive normal lives,” she said. “… So our hope is that Gov. Rauner will … find a way of increasing the state’s revenue, either by restoring the income tax increase or through some other method.
“The state doesn’t have enough money to adequately fund social service agencies right now. And people should remember that we’re businesses, not-for-profit businesses but businesses, that provide employment to people. We are not some bloated agency of the state.”
Vickie Smith, executive director of the Illinois Coalition Against Domestic Violence, said organizations that operate battered women’s shelters throughout the state are also anxiously awaiting word on what a budget freeze would mean to them.
“As you can imagine, the cuts could be pretty devastating to our members,” Smith said, referring to 52 domestic violence shelters in Illinois. “It’s been in the news about the potential loss of funds, but we don’t know what to expect.
“It’s not just about the shelters but social service providers that work with us to offer assistance in housing, counseling, substance abuse programs, which are all interconnected when it come to domestic violence.”
Each of the organizations I’ve mentioned is busy lobbying local legislators to retain their funding, but each knows that will likely be impossible unless the state income tax increase is restored.
There’s simply no other source of revenue that could generate the roughly $4 billion a year the higher income tax provided.
And officials of several organizations noted that the state is going to run out of money in its current budget before the new fiscal year begins in June.
I know why people voted for Rauner and reform. They’re tired of corruption and wasteful spending by state government.
But it’s not the fat-cat politicians and their buddies that are likely to take the hit.
It’s abused women and children, the mentally ill, the physically disabled and the homeless.
And these people are not just going to vanish.
There will be a cost if funds for these programs are further cut, both in cash and human lives.
Rauner talked in his inaugural speech about a shared sacrifice. But you know who is really going to feel the pain.
News From The Arc of Illinois
Minimum wage, from the Care Campaign, Senator Hunter Wednesday, filed Senate Bill 12 which “provides that when recalculating rate and reimbursement methodologies, the Departments shall account for (i) mandated increases in the State minimum wage rate; and (ii) any increased payroll taxes required of providers or vendors contracting with the Departments. Provides that the Departments must fully fund recalculated rate and reimbursement methodologies.”
You are going to want your Senators to become Co-Sponsors of Senate Bill 12.
Learn about The Care Campaign in this radio interview with
Trinity Services CEO, Art Dykstra. Courtesy WMAY Radio
Governor Quinn got the message as we delivered and mailed
over 18,000 Care Campaign Cards to his office!
Welcome to The Care Campaign, a coalition of service providers, direct support workers and their unions, associations and individuals formed in January 2013 to raise wages of direct care workers in Illinois.
We hope you’ll join us to help win a living wage for the dedicated people who support those with developmental disabilities. This is important quality of life work performed by women and men who work hard caring for some of the most vulnerable of our fellow citizens.
How you can help:
- Sign the petition!
- Right click to – Download PDF, Print & Circulate Wages Fact Sheet
- Read about The Care Campaign’s launch in Springfield with Senate and House Hearings and Lobby Days.
- Like us on Facebook & Share our messages
Why The Care Campaign?
The Care Campaign is a historic coming together of providers, associations, workers and their unions, parents, administrators, caregivers, people with disabilities, and other Illinois citizens. Never before have so many concerned groups and individuals come together around this important issue. We are concerned and we are committed to making a difference for the thousands of direct service professionals in Illinois who tirelessly work to care for our fellow citizens with developmental and other disabilities.
In Illinois there are some 24,000 individuals with developmental disabilities supported in community settings. The problem is that many of the direct support employees who provide that support don’t earn enough to even support their own families. We don’t believe that it is right to pay so little for people who give so much.
Direct support workers in Illinois earn wages below the poverty level.
A recent IARF (Illinois Association of Rehabilitation Facilities) salary survey pegged the average direct support wage in Illinois at $9.35 per hour. That’s 21% below the U.S. Department of Health and Human Services poverty threshold of $11.32 for a family of four. This largely female workforce is often forced to work many overtime hours or even hold down a second job just to make ends meet. Many of these workers and their families have to fall back on public benefits such as Medicaid and food stamps, creating additional expenditures for state government. See the Arc of Illinois Position Paper on (DSPs) Direct Support Professionals
No Cost of Doing Business Increase for community providers since 2007.
Low wages are a consequence of the historically low reimbursement rates for community services. According to the State of the States in Developmental Disabilities report, Illinois ranks 41st of 50 in fiscal effort for these services. The General Assembly has not awarded a Cost of Doing Business Increase to community developmental disability agencies since 2007. Over the last 10 fiscal years, increases in state funding to these agencies have averaged less than 1% per year, for a total of 9.5%. By contrast, the CPI (Consumer Price Index) increased 23% over the same period. Community agencies were forced to cover increases in health insurance, fuel, and other costs from the small rate increases, while wages fell even further behind.
Low pay drives high staff turnover.
The lack of adequate wages for employees who perform the challenging work of supporting individuals with disabilities results in high employee turnover, which in turn, negatively impacts the quality of services provided. In 2008, the ARC of the United States documented annual turnover rates among direct support staff of 35% to 70%. According to a 2007 study, the national turnover rate averages 50% (Hewitt and Larson, 2007). Higher wages are proven to reduce staff turnover, improving stability and quality of services while reducing employer training costs.
The Care Campaign solution.
The Care Campaign proposes increases in reimbursement rates linked directly to increases in direct support staff wages. The goal is to increase those wages to $13 at minimum. To achieve this goal, The Care Campaign supports Senate Bill 2604, sponsored by Senators Heather Steans and Mattie Hunter, Daniel Biss, Julie Morrison and House Bill 3698, sponsored by Representatives Robyn Gabel, Lawrence M. Walsh, Jr., Emanuel Chris Welch, and Laura Fine.
This goal is a modest increase for an individual worker but significant for retaining a quality workforce to serve those with disabilities, helping to reduce turnover and providing a more consistent and supportive environment for those we serve. It will reduce reliance on public benefits such as food stamps and Medicaid while enhancing dignity and self-worth for the thousands who annually go over and above every day of the year to provide exceptional personal services to make life better for people with developmental disabilities.
You can help by signing the petition and spreading the word by liking us on Facebook and following us on Twitter. Stand with The Care Campaign to show that the citizens of Illinois care about those with disabilities and want a living wage for those who daily work to make life better for them.