In an effort to help Illinois’ many underfunded social service providers, the Illinois Senate voted to create a revolving loan fund to help these vitally important organizations pay their bills.

“It’s no secret that the state is months behind on its payments to social service providers,” said State Sen. Dave Koehler (D-Peoria), a co-sponsor of the legislation. “Creating this revolving loan fund will help organizations like the Boys and Girls Club of Greater Peoria pay their employees and operating costs.”

Senate Bill 3383 allows the Illinois Finance Authority (IFA) to provide short-term, zero-interest loans to human service organizations and health care providers. Many of these organizations are struggling to stay open because their funding from the State is so severely delayed. The State owes them more than $80 million dollars in back payments, and at the same time, demand for their services has increased. Many people are turning to them for extra help in these difficult economic times.

“Every county in my district is experiencing unemployment rates of 13 percent or more,” Koehler said. “Unemployed and underemployed individuals are often forced to turn to social service agencies and charitable health care providers for extra help. These organizations have done so much to soften the impact of the recession. The least we can do is help them keep their doors open.”

The IFA will be authorized to bond $300 million dollars, backed by revenue from the Cigarette Tax Act. Health care and human service organizations that receive at least 40 percent of their funding from the State and can demonstrate they are in financial distress will be eligible for loans of up to $200,000.

Senate Bill 3383 has passed the Senate and now awaits consideration in the Illinois House.