CHAMPAIGN — As chief executive officer of the Alan G. Ryle Cos., Sherry Newton oversees three businesses operating 30 group homes across Illinois for people with disabilities.

Almost 95 percent of the firm's revenue comes from the state, which currently owes Newton nearly $4 million — past-due bills from July, August and September.

"That's really not too bad for the state, which is pitiful," Newton said Friday.

Headquartered in Champaign, the private company survives on a substantial credit line from Busey Bank and cost-cutting measures. But with talk of further state budget cuts on top of the overdue payments, Newton wonders what the future holds.

"We've got 400 individuals we serve. All of them are reliant on state funding to survive, to get their food, their shelter, their services. If our company goes belly up, where will they go?" she asked. "That's what keeps me up at night."

For other local businesses and nonprofit agencies with state contracts, reimbursement delays mean more borrowing, higher interest costs, spending cuts, longer waiting lists and sometimes delayed paychecks.

Covering for the state's backlog has become another part of doing business, said Sheryl Bautch, director of the nonprofit Family Service of Champaign County.

"Unfortunately, this has become sort of the new normal for the state," Bautch said.

Family Service depends on the state for about $500,000 of its $1.7 million budget. Much of that money goes toward services for the aged, such as senior home care, though the agency also runs First Call for Help, Meals on Wheels and other non-state-funded programs. The state owes Family Service about $160,000, she said.

The uncertainty is almost as difficult to manage as the lack of cash flow, Bautch and other providers said.

Newer bills are sometimes paid ahead of older ones, or, in Newton's case, one group home is reimbursed but not another, with "no rhyme or reason," she said.

Many agencies received an influx of money on June 30, the end of the 2011 fiscal year, as the state moved to capture enhanced Medicaid reimbursements that were about to expire, officials said.

But agencies have received few payments since then, with bills now lagging three months behind.

"The thing that continues to be the most frustrating, and of course a little frightening, is that there really is not a pattern. There is no information that comes from them that says, 'OK, your payments will be this late,'" Bautch said.

"We continually get to the brink, where you start wondering: How much longer can we do this? Do we need to cash in some investments? Do we need to borrow money? Then a check shows up in the mail."

Despite the lag, this isn't the longest providers have had to wait for money in recent years.

Developmental Services Center, which provides services for people with disabilities, was owed $2.9 million last December compared with $1.5 million now, said Dale Morrissey, president and CEO. That number was whittled down to $600,000 after the flurry of payments around July 1, but it's crept back up since.

Two years ago, Newton's firm was forced to dip into its line of credit by almost $4 million when the state was six or seven months behind.

The company, which operates Residential Developers, couldn't survive without the loans, but that also means paying interest with money that could otherwise go to client services, Newton said. She's forgone extras such as updated furnishings for group homes or field trips for residents, most of whom depend on public aid and Social Security for their care.

It's become essential for human services agencies that receive state funding to establish a line of credit with their banks, Bautch said, and some have maxed out their credit.

Family Service hasn't had to borrow but has drawn down a reserve fund — created by a $500,000 private bequest several years ago — as the state has become more delinquent with payments, she said. Her board decided to invest the $500,000 rather than commit it to a specific program, she said, but the reserves "only last so long."

Like other agencies, Family Service watches its expenses "very closely," putting off staff training, reducing mileage reimbursements for caseworkers and volunteers, and cutting anything "remotely discretionary," Bautch said. It also reduced a part-time position at the Retired Senior Volunteer Program because of budget cuts, and on Friday terminated a state-funded caseworker who works with seniors unable to take care of themselves, because Bautch wasn't told if the $23,500 grant is being renewed.

DSC has had to tap into its line of credit from time to time, but it also benefits from local funding through the Champaign County Mental Health Board and Developmental Disabilities Board, which pay on time, Morrissey said.

DSC has cut expenses, but "we're going to have to send consumers home before we can cut anymore" to protect safe client-staff ratios, he said. The reductions mean longer waiting lists for adult training programs and group homes.

Prairie Health Systems in Urbana, which operates Prairie Center, is owed about $640,000 from three different state agencies for programs that help people with drug and alcohol problems. Its next payroll of $110,000 is due Friday, and "we're going to have to go out and borrow," Executive Director Bruce Suardini said.

The agency has weathered substantial state budget cuts since 2008, and its funding was slashed another $441,000 for fiscal 2012. And "that's only for a four-month contract that ends Nov. 1," Suardini said.

The cuts forced Prairie Center to close its detox unit in September. It treated 800 people last year, he said. People can't be admitted into the residential program until they've been off drugs or alcohol for at least 72 hours, and with no detox program, they have to go home or find a hospital, he said. Hospitals are reporting more addicts showing up in emergency rooms, which is far more costly to the state, Suardini said.

Since 2008, the agency has cut its payroll from 107 to 71 employees, reduced its residential treatment beds and seen its waiting lists grow.

All of the agencies wonder what will happen Nov. 1. State officials approved a four-month budget through October, and legislators are locked in a battle with Gov. Pat Quinn over the closure of state prisons and mental health facilities.

"He is trying to get additional monies, legislators haven't appropriated it for him, so the squeeze is on, and we're not getting paid," Suardini said. "Nothing has been explained to us about going forward after the end of this month. We're all just kind of waiting."

The Department of Human Services, which processes bills from agencies, and the Illinois comptroller's office, which pays bills once they've been authorized, both maintain that state payments are expedited for organizations in danger of closing or missing payroll, to ensure they stay in business.

"But it's a balancing act," said Bradley Hahn, spokesman for Comptroller Judy Baar Topinka. "Whenever you bring someone to the front of the line, you're pushing someone further back."

(This story appeared in print on Oct. 18.)