Nonprofit human service organizations in Illinois need clarification on recent guidance that requires them to report to the state on the status of their Paycheck Protection Program (PPP) loan or tying these loan dollars to state funding, say Republican congressmen from Illinois.
U.S. Reps. Darin LaHood (R-IL), John Shimkus (R-IL), Adam Kinzinger (R-IL), Rodney Davis (R-IL), and Mike Bost (R-IL) said in a joint statement released on Wednesday that nonprofit service organizations should not be punished at the expense of the state during the pandemic, and that Illinois Gov. JB Pritzker and relevant state agencies should withdraw their request for information about PPP dollars in accordance with congressional intent.
“Congress did not intend for the funds provided through the Paycheck Protection Program to supplement state budgets by offsetting the cost they pay for services through private nonprofit service providers,” the members said in their joint statement. “The state’s assertion that it may deduct an amount equivalent to any funds nonprofit organizations receive through PPP from what they are paid in their contracts is a clear overreach.”
The members reiterated that stance in a June 3 letter sent to Gov. Pritzker in which they requested that the state, the Illinois Department of Human Services, and the Illinois Department of Children and Family Services clarify guidance asserting that the state may reduce funding for nonprofit human service organizations equivalent to the funding they received through the PPP.
“The PPP was authorized by Congress in the CARES Act to allow businesses and nonprofits to keep employees on payroll and off unemployment, given the impact of coronavirus on our communities and these entities,” the lawmakers wrote. “Based on our understanding of new guidance issued by the state, these nonprofits will need to comply with the state reporting requirement in order to receive their expected payments from the state and risk a reduction of dollars awarded in current or future state contracts as a result of the PPP loan being forgiven in part or in whole.
“To our knowledge, currently, no other state is requiring human service providers to report to the state on the status of their PPP loan or tying these loan dollars to state funding,” wrote the members.