If it seemed like Illinois' financial outlook couldn't get any gloomier, consider this point: For every $1 that the state cuts for programs like homelessness, child care, or domestic violence, agencies who perform those services could forfeit as much as $4 in federal matching funds.

From Progress Illinois:

If it seemed like Illinois' financial outlook couldn't get any gloomier, consider this point: For every $1 that the state cuts for programs like homelessness, child care, or domestic violence, agencies who perform those services could forfeit as much as $4 in federal matching funds. Under federal block grant guidelines, state agencies and social service organizations with government contracts are required to put up a matching fee as proof they have the capacity to carry out their work. In a recent blog post, the Heartland Alliance's Doug Schenkelberg explained why this "leveraging" of state dollars is so crucial:

Most non-profit service providers are putting together a patchwork of funding to cover the costs of the programs they run. They use state dollars, federal dollars, perhaps money from the city or county, and private contributions from corporations, foundation, and individuals. ... All of these dollars leverage each other. The federal dollars that flow to a non-profit only come in the door if that non-profit can show that there are other funding sources in the program, foundations want to see that their money is not the only money supporting the work, etc. It amounts to a fragile house of cards. When one piece of that funding is taken away – in this instance, state resources – the whole house is at risk of crumbling.

The Alliance to End Homelessness in suburban Cook County is among those organizations currently in a panic over the potential loss of matching funds. Executive director Jennifer Hill tells us she's staring down a potential $1.1 million state budget cut for supportive services alone next year. As we mentioned above, the resulting decrease in federal funding could be four times that amount. While devastating, that kind of loss doesn't compare with the amount of money the state could forego if it cuts the $380 million initially allocated for the Child Care Assistance Program.  According to the Ounce of Prevention Fund, $74 million in related federal dollars may vanish.

While state officials have declined to put a price on the potential loss in federal matches to the state, a policy expert from the Heartland Alliance tells us that an estimate floating out of the governor's office -- based on the bare-bones budget bill that passed the General Assembly last month -- puts the figure at a whopping $1.7 billion.