Federal funding cuts, state budget woes have Chicago recovery services scrambling to survive

Chicago Tribune

08-04-2025

Aaron Sadowski says he knows how to get sober. He just needs help to stay there.
Last year, after getting evicted from an apartment on the near South Side, the 47-year-old found himself homeless for eight months, sleeping on the beach or in cheap hotels and doing whatever it took to afford alcohol and cocaine.
'I could have kept doing that, but I knew that there was no end. It was just a vicious cycle,' Sadowski said in an interview at the Kedzie Recovery Home, a residential recovery center for men. 'I know what to do, but I won't do it on my own. I need that little bit of prodding.'
The center provides intense therapy and social services as well as a place to live and up to three meals a day for dozens of men who might otherwise have no housing.
But the Humboldt Park home, run by the Chicago-based Gateway Foundation nonprofit, finds itself squeezed by a tight state budget that can't cover the hole left by federal funding cuts ordered by the Trump administration.
A $500,000 federal grant meant to counter the opioid overdose crisis has covered the annual accommodations for 18 of the center's roughly 70 residents, according to Karolina Strack, Gateway's government affairs director. That federal funding likely evaporated with Trump's recent executive order slashing more than $11 billion in health services nationwide, she said.
The rest of the home's room and board costs, which can't be billed to Medicaid, were paid for with state substance use treatment funding that also has been cut — reduced by $3 million and leaving about $7 million in the current fiscal year that ends June 30, Gateway Foundation CEO Jeremy Klemanski said.
While the foundation has since lobbied the state and received an additional $430,000 through the state Department of Human Services, that stream of money is due to run out sometime this month, Klemanski said.
'There's just not a way that the state can make up for what the federal government is trying to leave behind,' an official in the governor's office said in an interview with the Tribune, referring to the widespread federal cuts announced in recent weeks. The official spoke on the condition of anonymity because they weren't authorized to speak on the record about the issue.
The center has no plans to start putting any of its residents back out on the street, but its offerings of room and board could soon be completely unfunded, the foundation said last week. That has created strain for staffers and those seeking treatment.
'These are human beings who don't — they don't have the same resources as a lot of the people who are making these decisions,' Klemanski said. 'This is what they've got. And when that is in jeopardy or at risk, that's incredibly stressful for people.'
Sadowski has had scrapes with the law and for more than two decades has been in and out of recovery programs. The last time he was able to go without drinking alcohol for a long period, about two years, was when he was involved with a similar home, he said.
Every day, he and other residents start their day at the Kedzie Recovery Home with breakfast at 6:30 a.m. and go through hours of check-ins and discussions with each other and counselors. The building on Kedzie Avenue between Humboldt Park and Palmer Square is one of the oldest used by the Gateway Foundation, and on a rainy day last week was filled with grayish light as residents moved among dorm-like rooms that each house one to four men.
'I don't have a dollar to my name,' Sadowski said. That makes the holistic support he receives especially crucial. He and other residents also have the opportunity to leave and see loved ones, which for Sadowski means occasional visits with his 23-year-old daughter, a recent graduate of DePaul University.
The potential cuts to the nonprofit are because of a combination of state and federal pressures.
Last year, the General Assembly passed a budget that reduced funding to about a dozen Illinois behavioral and mental health organizations, Illinois Association for Behavioral Health CEO Jud DeLoss told a state House panel late last month.
Funds that had gone unused in previous years were reallocated as part of a 'responsible budgeting' process, according to Gov. JB Pritzker's office.
But advocates say as a result of that, budget officials underestimated the amount of money the organizations would need for this fiscal year.
'We have been in constant communication with DHS and (the Substance Use Prevention and Recovery division), and they are attempting to find ways to fund the shortfall,' DeLoss said, 'but they have not come close to the millions of dollars that are necessary to meet the full fiscal year and the tremendous need for (substance use disorder) services that are out there not being reimbursed through Medicaid already.'
At the same time, the federal government last week announced it would cut about $28 million intended for behavioral health in Illinois alone, meaning potentially massive cuts to community-based behavioral health providers, DeLoss said at the same hearing.
DeLoss said he supports Pritzker's proposed budget for the coming fiscal year, which boosts funding for substance abuse prevention and recovery. But much of that increase is now likely going to be needed just to offset federal cuts, he said.
In the last six months of 2024, Gateway officials said they provided treatment to about 1,200 people through the type of funding that's been reduced by the state.
A fresh state funding stream won't be available until the new fiscal year begins July 1. In the interim, the foundation will have to be selective about admissions.
The funding pressures would be exacerbated by potential cuts to Medicaid, a key funder of substance use disorder and behavioral health care services in Illinois, as Republicans in Congress attempt to pass a budget with trillions of dollars in lower taxes and reduced spending.
Klemanski acknowledged that Gateway hasn't spent its full state funding in recent years, which he attributed in part to staffing shortages driven by the COVID-19 pandemic. But he said the state has lowered allocations based on those expenditures even as costs grew and services ramped up.
'We are saying to folks, 'Look, we're out of funding. We need to help connect you with other treatment centers, or other places that may have funding,'' Klemanski said.
Oscar, a resident at the Humboldt Park home who declined to provide his full name due to privacy concerns, said he started drinking as a way to deal with the resentments he felt about his experience of coming to the United States from Mexico as a teenager. At the beginning of his initial six-month stay at the home last year, he said his depression and anxiety were overwhelming.
'I couldn't talk. I was just crying,' Oscar said.
During his stay at the home, he said he began managing his emotions and eventually was allowed to see his 14-year-old son again after more than two years apart.
'They introduced me to a new way of living,' he said of Gateway.
More recently, Oscar feared he was about to suffer a relapse while dealing with family issues in Mexico and anxiety brought on by American politics, including potential cuts to community services, he said. He called the recovery home and was able to return for more treatment.
'If it wasn't for this place, I'd probably be dead,' said Oscar, who has a job in construction.
Despite funding challenges, Gateway officials said closing the Humboldt Park recovery home is not an option. They'll continue to operate at a deficit after funding runs out, and will give priority to patients who can bill to Medicaid at their detox and treatment centers. People who are pregnant won't be turned away at any location, and one Chicago area facility and one downstate center will be prioritized, Klemanski said.
Gateway is also trying to redirect some patients to facilities run by other organizations. But the triage plan will be a challenge because other recovery operations also have had their funding cut, Kedzie Recovery Home program director Karen Elliott-Clark said.
'When we do reach out to other organizations to try to get them in, they don't have — they've been cut, and they're not having beds as well. So it's really putting the community, again, at a higher risk level for overdose and other co-mortality situations,' she said.
Getting shuffled between multiple treatment centers while seeking help also means having 'nowhere to call home,' Sadowski said.
'When you're just going from facility to facility or something like that, it doesn't — you don't feel like you have a place. You don't feel like you belong,' he said.
Illinois Attorney General Kwame Raoul, along with a coalition of 22 other states, last week sued Trump's Department of Health and Human Services and its new leader, Robert F. Kennedy Jr., over the cuts.
HHS declined to comment on the ongoing litigation. However, as the funds were passed by Congress in legislation related to relief from the COVID-19 pandemic, the department has said it 'will no longer waste billions of taxpayer dollars responding to a non-existent pandemic that Americans moved on from years ago.'
'HHS is prioritizing funding projects that will deliver on President Trump's mandate to address our chronic disease epidemic and Make America Healthy Again,' spokesperson Emily G. Hilliard said in an email.
Separately, the Trump administration last month renewed a declaration that the opioid crisis was a public health emergency, days before the funding cuts were announced.
Sadowski, a union electrician, said his top priority is returning to work and getting his own apartment. He's also ready to improve his relationship with his daughter.
The home is helping him with the small things that can seem impossible during a mental health crisis, such as looking for affordable housing and meeting with a case manager.
'If all of a sudden, tomorrow, they said, 'Good luck to you,' I wouldn't know where to go,' he said, 'other than back to the life that I just came from.'