Is it Possible to Make ‘Easy’ Cuts to Human Services Spending by Attacking Waste, Fraud, and Abuse? Elizabeth T. Powers, Associate Professor of Economics, University of Illinois at Urbana-Champaign University of Illinois Institute of Government and Public Affairs February 18, 2014. The Health and Social Service area of the state of Illinois’ budget has comprised roughly 40 percent of state expenditures in recent years. When leaders decide to cut the state budget, this area is inevitably on the chopping block. This area includes Medicaid, child-care subsidies, Temporary Assistance to Needy Families (TANF), services for persons with developmental disabilities, and mental health services, to name a few. Spending took an enormous bump down in FY 2012 (just over 15 percent) and a hefty 5.6 percent cut for good measure in FY 2013 before an uptick in 2014. When viewed in a longer historical context, these cuts fit into a long-term downward trend. Indeed, the state has cut human services in the past decade by nearly one-quarter in inflation-adjusted, per capita terms. In the context of an already-squeezed Human Services budget, policymakers may find strategies of acrossthe-board or program cuts decreasingly palatable. Nearly all the programs left in the human services system today have survived multiple rounds of tough programmatic cuts. Examples of such cuts are eliminating specific services, withdrawing services from the slightly better off, and imposing or increasing co-payments. As programs have been whittled down, individuals who remain eligible tend to have a more acute need for them. Policymakers eventually reach a point where wringing further savings from human services programs through cuts threatens to distort the original programs beyond recognition. Thus, an appealing alternative to program cuts is to get tougher on waste, fraud, and abuse
