Homeless agencies see trouble in stimulus money

Israel Vargas, of the San Jose Obrero Mission, illustrates how the state cuts could impact the agency | Credit: Adrian G. Uribarri

In early July federal officials promised more than $67 million in stimulus funds to prevent homelessness in Illinois. They saw it as a way to help families struggling with an unprecedented foreclosure crisis.

State officials, fresh from a battle to balance a $9 billion budget deficit, saw it as a golden opportunity to cut back. They slashed funding for similar programs by 78 percent, from $11 million last year to $2.4 million, relying on the feds to provide the rest.

In the short term, the federal dollars will buoy and even benefit some homelessness-prevention agencies in the city. Chicago alone will receive more than half of the cash.

But advocates for struggling families face a worrisome question: What will happen when the stimulus funds run dry?

"What are they going to do then?" asks Mimi Pacelli, policy coordinator at Housing Action Illinois. "What they've done is pushed off the problem for another year or 18 months. They haven't solved anything."

Housing Action works with agencies around the state to help low- and moderate-income families keep their homes. It is a mounting challenge as record numbers of homeowners receive foreclosure and eviction notices this year.

Pacelli says the problem is likely to continue for longer than stimulus funds will be available, and that she worries that state legislators may face another budget crisis that leads them to short homelessness prevention for the long term.

The Heartland Alliance for Human Needs & Human Rights, in Chicago, is one of Housing Action's affiliates. Doug Schenkelberg, associate director of policy and advocacy, estimates that from July 2008 until June, the organization helped about 1,000 participants, and spent about $1,250 to $1,300 on each.

He says that since more families need help during the recession, money from the American Recovery and Reinvestment Act should supplement existing state funds for homelessness prevention. Instead, Schenkelberg says, Illinois officials have used it as a crutch.

"The state is, in essence, utilizing the Recovery Act dollars to replace the state dollars," Schenkelberg says. "They're jeopardizing the infrastructure that they've developed over the last few years for homelessness prevention."

The governor's office, in charge of allocating the funds, did not directly respond to requests for comment. But press contacts there referred questions to Marielle Sainvilus, spokeswoman for the state Department of Human Services.

Sainvilus says that each year, department officials ask for more money to help prevent homelessness, but that hard times forced state officials to make difficult choices this year.

"If we can get federal dollars to help pay for programs so that we can use existing funds," she says, "that's kind of the hand that we've been dealt right now."

When those federal dollars run out, Sainvilus says, the department will ask officials to reinstate previous state funding.

Yet state cuts are just one byproduct of new federal funds. Some homeless shelters, traditionally for people who have already lost their homes, have proposed new prevention programs just to secure stimulus dollars.

It is a way to cope with delayed payments from Illinois officials, who are letting $3.9 billion in past-due bills go unpaid in an effort to balance the budget.

"We're a month and a half into the program year, and we don't have money," says Kathleen Molnar, program director at the Emergency Fund. The agency has distributed state money for homelessness prevention since July 2007, and it is also a federally designated coordinator for distributing stimulus funds to prevention programs in the city.

Molnar says a delay in the state's budget process, and ultimately, major reductions in state spending for those programs, have left agencies in limbo.

"Now that it's cut, and the economy is so bad," she says, "we're not exactly sure what will happen."

Israel Vargas runs the San Jose Obrero Mission, a men's shelter in Chicago's Pilsen neighborhood. He says he worries that state officials might not fully fund his agency, a possibility that could slice more than a quarter of the Mission's $440,000 annual budget.

To hedge such a cut, Vargas says, the Mission teamed with La Casa Norte, a Humboldt Park crisis center that provides homelessness-prevention services. He says the organizations filed a joint application for stimulus money from the U.S. Department of Housing and Urban Development.

A problem, Vargas says, is that even if the Mission receives federal stimulus funds, it can only use them for prevention work, not existing services that help chronically homeless men.

"The stimulus money is not stimulating me at all," he says. "We're going to have to look for someone who has experience in this field. What happens to what I already have here; what has been working?"

The question vexes Noel Roman Sr., a resident at the Mission. He says he worries about what would happen to him if Vargas cuts some services for the homeless.

Roman says he kicked a heroin habit about five years ago, but not before racking up 22 arrests and two felony convictions for possessing guns and drugs. He dropped out of school in fifth grade, he says, after school administrators caught him selling marijuana.

Now, he sleeps in the upper bed of a wooden bunk, in a room he shares with more than a dozen other men. By day, he looks for a job, hoping employers overlook his criminal record and lack of a formal education.

"There's light at the end of the tunnel," Roman says. "I have my bad days, but I'm trying to get better."

Staff Writer Adrian G. Uribarri can be reached at 773.362.5002, ext. 12, or adrian at chitowndailynews dot org.