Large cuts within this year’s state budget are forcing more than half of Illinois’ homeless prevention providers to make significant cuts to their services over the next couple of months, according to a new report released Monday. Under the state’s budget, funding for the Illinois Homeless Prevention Program, which provides rental assistance in the form of one-time grants to aid those facing eviction or foreclosure, has been reduced by 37 percent compared to last year – down from $2.4 million to $1.5 million.

As a result, as many as 55 percent of the agencies that provide rental assistance grants could run out of funding by the end of next month, while an estimated 62 percent of state-funded shelters and transitional housing programs have resorted to reducing staff and limiting the number of clients they serve, according to the Chicago Coalition for the Homeless, the Chicago Alliance to End Homelessness and the Housing Alliance, which co-authored the report.

“When the program was funded at $11milllion, they [providers] were serving 12,000 to 14,000 households a year,” said Julie Dworkin, director of policy for the Chicago Coalition for the Homeless. “So with the cuts, they’re probably going to serve maybe 1,000 to 1,500 – so over 10,000 households are affected.”  

Dworkin said agencies administering homeless prevention grants have seen an 87 percent decrease in state funding since 2008, while money slated for emergency and transitional housing providers has been cut by 52 percent compared to last year.

According to Housing Action Illinois Policy Director Bob Palmer, the resulting impact is one that has been felt by service providers throughout the state.

“We know anecdotally from the providers and also the data the state collects that it has been a very effective program in terms of keeping people housed,” Palmer said, regarding the homeless prevention program.  “In the recessionary environment that we continue to struggle with, not having these funds available is a big loss.”

Heartland Alliance for Human Needs and Human Rights Senior Director for Housing Maura McCauley said the problems currently facing many providers are compounded by the impending loss next year of federal funding provided by the 2009 American Recovery and Reinvestment Act, of which Illinois has received at total of $71 million.

“The stimulus fund actually gave us the ability to serve a lot more people,” McCauley said. “We‘re going from serving about a thousand people over the last two years to being able to serve about 120.”

McCauley added that budget cuts over the last few years have forced her to reduce her case management staff from four a couple of years ago down to one today.  “We have to find other resources to farm his salary because it’s just not covered with what we have,” McCauley said.

Such reductions come at a time when most agencies are faced with a growing demand for their services. The National Alliance to End Homelessness has estimated the number of homeless in the U.S. could increase by 5 percent, or 74,000, in the next three years.

In addition, cuts to homeless prevention could have a lasting negative impact on the state’s economy.  A report by the Center for Tax and Budget Accountability released in last May estimated that for every $1 that was being spent on prevention programs, $4 was saved in the reduction of other costs related to homelessness, such as hospital stays, incarceration and shelters.

Despite concerns, Dworkin said she remained optimistic that funding for emergency and transitional housing could be restored when the legislature votes on a supplemental appropriations bill next week.  

As far as restoring homeless prevention program funding, she said her group planned to lobby to have the money included as a part next year’s state budget, scheduled to be introduced by Gov. Pat Quinn in February.

In response to the question of the impact the current cuts would have on agencies servicing the homeless, Illinois Department of Human Services spokeswoman Januari Smith Trader said the governor was in the process of working with lawmakers on ways to reallocate money to best address the needs of the state.

“Obviously the department hopes it [homelessness prevention funding] will be restored,” she said. “This is a great program that helps many folks either while they are homeless, or prevents them from being homeless especially in these tough economic times.”

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