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Social service groups sue Illinois for $100 million over unpaid work

CHICAGO (Reuters) - Dozens of Illinois social service providers, starved of cash by the state’s long-running budget stalemate, sued Illinois Governor Bruce Rauner and six statewide agencies on Wednesday, seeking more than $100 million for unpaid work since July.

Republican Bruce Rauner smiles after winning the midterm elections in Chicago, Illinois, November 4, 2014. REUTERS/Jim Young

The plaintiffs, who provide services for sex-abuse victims, the homeless, senior citizens and at-risk youth, are suffering “acute financial hardship” as a result of the unresolved budget fight, according to the lawsuit, filed in Cook County Circuit Court.

It is the latest attempt at judicial relief by groups hurt by the state’s record-setting, 11-month budget impasse between the Republican governor and Democrats controlling the legislature.

The coalition of 64 organizations, calling itself Pay Now Illinois, contended that Rauner’s June 2015 veto of appropriation bills amounted to an unlawful impairment of the their constitutional right to seek a legal remedy for non-payment by the state of their various contracts.

“We’ve had to deal with this uncertainty now for the 11th month, over 300 days, without being paid,” said Andrea Durbin, chairwoman of Illinois Pay Now. “We’re seeking to be paid in full for the work we’ve done.”

Rauner’s office expressed empathy but urged state lawmakers to approve a spending plan.

“While we understand that frustration is driving many worthwhile organizations to seek solutions anywhere, including the courts, the only solution is for the General Assembly to pass a balanced, reform-oriented budget as soon as possible,” Rauner spokeswoman Catherine Kelly said.

In another budget-related development, a plan to change how Illinois taxes its residents and businesses stalled in the House of Representatives after a successful lobbying push by Rauner.

The proposed constitutional amendment would have stricken the state’s flat income-tax rates and allowed state lawmakers to impose new, multi-tiered tax rates tied to an individual or company’s level of income. Supporters said it would raise an additional $1.9 billion annually for the state.

But facing a Wednesday deadline to pass the House, one of the measure’s sponsors, State Representative Christian Mitchell, said lobbying by the governor’s office convinced up to five Republicans whose backing was needed for passage to withdraw their tentative support.

“It’s disappointing because this could have helped us with our budget crisis,” Mitchell, a Chicago Democrat, told Reuters.

Rauner’s administration said the measure would cost the state 20,000 jobs in four years and lead to a migration of 43,000 high wage earners from Illinois.

Editing by David Gregorio