In the short term, federal dollars will buoy and even benefit some homelessness-prevention agencies in the city.But what will happen when the stimulus funds run dry?

From ChiTown Daily News:

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."