State plans early payoff of Fed loans

State plans early payoff of Fed loans

By PETER HANCOCK
Capitol News Illinois
phancock@capitolnewsillinois.com

SPRINGFIELD – Gov. JB Pritzker and other Democratic leaders announced Thursday that they have agreed to a plan to repay the money Illinois borrowed from the Federal Reserve during the COVID-19 pandemic before the end of the next fiscal year.

Illinois borrowed $3.2 billion from the Fed through a program that Congress established under the Coronavirus Aid, Relief and Economic Security, or CARES Act to help states that saw dramatic declines in revenue during the peak of the pandemic. Of that, roughly $2 billion remains outstanding.

That money was to be repaid in three installments by December 2023. But in a news release, Pritzker said the state’s recent economic performance and stronger-than-expected revenue growth will allow it to pay off the loan early, saving the state about $100 million in interest charges.

“Repaying the federal government is an important step in our efforts to ensure the state remains on sound fiscal footing,” Pritzker said in a statement released Thursday afternoon. “The General Assembly has been a critical partner in utilizing the federal dollars to help the most vulnerable get through the pandemic. I also credit the Comptroller in strategically managing cash flow in these trying times.”

But even without the debt repayment cost, Illinois faces a number of significant fiscal challenges over the next year.

During a news conference earlier in the day, House Majority Leader Greg Harris, D-Chicago, said the proposed budget as it stands now is about $1.3 billion out of balance and that lawmakers are faced with a choice of spending cuts, revenue enhancements or a combination of both in order to get through the year.

Last week, the Governor’s Office of Management and Budget revised its revenue estimates for the current fiscal year upwards by nearly $1.5 billion and by $842 million for the upcoming fiscal year.

Pritzker attributed that improved performance to state programs during the pandemic that targeted sectors of the economy such as small businesses and child care providers, as well as effective cash management by Comptroller Susana Mendoza.

The statement from the governor’s office noted that final income tax payments received earlier this week, along with stronger year-to-date receipts in the state’s main revenue sources – individual and corporate income taxes and sales taxes – will allow the remainder of the repayment to occur beginning in the next several months. 

Earlier, officials had hoped to use a portion of the $8.1 billion in fiscal relief Illinois will receive through the recently-passed American Rescue Plan to pay off the loans, but the Treasury Department has issued interim rules that prohibit the use of those funds to pay off state debt.

“So we’ve been working very hard with the governor and the Senate to devise a plan to make our full repayments using state resources,” Harris said. “So I think that’s very important that we’re meeting all of our obligations, and we’re going to get that done and we’re going to figure out then how to balance our operating budgets as well.”

House Speaker Emanuel “Chris” Welch, D-Hillside, said in the statement that lawmakers would continue to work with the governor’s office to establish a “targeted spending plan” for the federal relief funds to address issues such as affordable housing, community-based mental health and substance abuse services and upgrades to hospitals serving areas disproportionately impacted by the pandemic.

Senate President Don Harmon, D-Oak Park, called the federal loans “a lifeline to keep our state and our economy afloat” during the pandemic.

“That our economy has rebounded so strongly that we can now pay it off early is a testament to the resilience of the people and businesses of the great state of Illinois,” he said in the statement.

 

Capitol News Illinois is a nonprofit, nonpartisan news service covering state government and distributed to more than 400 newspapers statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation.

Leave a Comment





Local News

GSWNH_OLSLincolnTomb_052424

Learning history is fun, honest

Spread the love

Spread the love Seventh and eighth graders from Our Lady of the Snows School clamor to rub the nose of a bust of President Abraham Lincoln during a field trip to Springfield earlier this month. Rubbing the nose of the famous bust of Honest Abe–a part of the tomb of the nation’s 16th President–is said…

13th Ward Ald. Marty Quinn

Fight to save ShotSpotter is still alive

Spread the love

Spread the love. By Tim Hadac Editor Clear-Ridge Reporter & NewsHound (708)-496-0265 . As you have read several times in the Clear-Ridge Reporter & NewsHound, the people of Clearing and Garfield Ridge are clear in their support of keeping ShotSpotter technology deployed in Chicago, to help police fight crime. So I won’t go over old…

GSWNH_ColdPlanerSpitsAsphalt_052424

63rd Street getting a facelift

Spread the love

Spread the love. Quinn hails federally funded resurfacing project  . By Tim Hadac The old joke about there being not four seasons, but just two in Chicago each year—winter and construction—was apparent late last week as heavy equipment arrived in Clearing. As 13th Ward Ald. Marty Quinn and other city officials gathered for an outdoor…

23rd Ward Ald. Silvana Tabares

Tabares blasts Foxx over ‘no seizure’ idea

Spread the love

Spread the love. Brands State’s Attorney as ‘pro-criminal’ .  By Tim Hadac Twenty-third Ward Ald. Silvana Tabares this week blasted outgoing Cook County State’s Attorney Kim Foxx over a possible change in how crimes are—or are not–prosecuted.Foxx recently said she is considering a plan to decline to prosecute weapons and drug crimes detected by routine…

GSWNH_OLSPrincipal_052424

School can get messy

Spread the love

Spread the love Second grader Weronika Kozielec squirts ketchup on the head of Our Lady of the Snows School Principal Christina Avis at a recent gathering in the parking lot of the school, 4810 S. Leamington. But the condiment was not all that was dumped on the principal. Students, faculty and staff laughed and cheered…

CRR_NH

Clear-Ridge Reporter and NewsHound May 22, 2024

Spread the love

Spread the love

Peggy Zabicki

Brother, what a day today is

Spread the love

Spread the love. By Peggy Zabicki Your correspondent in West Lawn 3633 W. 60th Place •  (773) 504-9327 . May 24 is National Brothers Day. The word “brother” comes from the Latin root for “frater” and the Proto-Germanic word “brothar” which itself comes from the Proto-Indo-European root “bhrater.”  I’m sure everyone already knows that, but…

Mary Stanek

May your Memorial Day be meaningful

Spread the love

Spread the love. By Mary Stanek Your correspondent in Archer Heights and West Elsdon 3808 W. 57th Place •  (773) 517-7796 . I hope we all will have a meaningful Memorial Day. Let us remember that this day is set to honor military personnel who died in service of their country. Memorial Day also marks…

volleyball

Boys Volleyball | Sandburg seeks 26th regional title

Spread the love

Spread the loveBy Randy Whalen Correspondent Coming off the worst season in program history in 2023, Sandburg was not going to settle for anything less than better results this year. Past the midway point of this season, however, the Eagles had a record of 11-8. But they closed the regular season strong, winning 11 of…

Reavis players celebrate after the Rams clinched the South Suburban Red title with a 3-0 win over Oak Lawn. Photo by Xavier Sanchez

Baseball | Red-hot Reavis looks to make noise in postseason

Spread the love

Spread the loveBy Xavier Sanchez Correspondent Reavis is determined to send their head coach Don Erickson into retirement on a high note and will head into the postseason red hot and as South Suburban Red champions. The Rams defeated Oak Lawn 3-0 for the second straight day on May 15 to clinch the conference title.…

Neighbors

GSWNH_OLSLincolnTomb_052424

Learning history is fun, honest

Spread the love

Spread the love Seventh and eighth graders from Our Lady of the Snows School clamor to rub the nose of a bust of President Abraham Lincoln during a field trip to Springfield earlier this month. Rubbing the nose of the famous bust of Honest Abe–a part of the tomb of the nation’s 16th President–is said…

13th Ward Ald. Marty Quinn

Fight to save ShotSpotter is still alive

Spread the love

Spread the love. By Tim Hadac Editor Clear-Ridge Reporter & NewsHound (708)-496-0265 . As you have read several times in the Clear-Ridge Reporter & NewsHound, the people of Clearing and Garfield Ridge are clear in their support of keeping ShotSpotter technology deployed in Chicago, to help police fight crime. So I won’t go over old…

GSWNH_ColdPlanerSpitsAsphalt_052424

63rd Street getting a facelift

Spread the love

Spread the love. Quinn hails federally funded resurfacing project  . By Tim Hadac The old joke about there being not four seasons, but just two in Chicago each year—winter and construction—was apparent late last week as heavy equipment arrived in Clearing. As 13th Ward Ald. Marty Quinn and other city officials gathered for an outdoor…

23rd Ward Ald. Silvana Tabares

Tabares blasts Foxx over ‘no seizure’ idea

Spread the love

Spread the love. Brands State’s Attorney as ‘pro-criminal’ .  By Tim Hadac Twenty-third Ward Ald. Silvana Tabares this week blasted outgoing Cook County State’s Attorney Kim Foxx over a possible change in how crimes are—or are not–prosecuted.Foxx recently said she is considering a plan to decline to prosecute weapons and drug crimes detected by routine…

GSWNH_OLSPrincipal_052424

School can get messy

Spread the love

Spread the love Second grader Weronika Kozielec squirts ketchup on the head of Our Lady of the Snows School Principal Christina Avis at a recent gathering in the parking lot of the school, 4810 S. Leamington. But the condiment was not all that was dumped on the principal. Students, faculty and staff laughed and cheered…

CRR_NH

Clear-Ridge Reporter and NewsHound May 22, 2024

Spread the love

Spread the love

Peggy Zabicki

Brother, what a day today is

Spread the love

Spread the love. By Peggy Zabicki Your correspondent in West Lawn 3633 W. 60th Place •  (773) 504-9327 . May 24 is National Brothers Day. The word “brother” comes from the Latin root for “frater” and the Proto-Germanic word “brothar” which itself comes from the Proto-Indo-European root “bhrater.”  I’m sure everyone already knows that, but…

Mary Stanek

May your Memorial Day be meaningful

Spread the love

Spread the love. By Mary Stanek Your correspondent in Archer Heights and West Elsdon 3808 W. 57th Place •  (773) 517-7796 . I hope we all will have a meaningful Memorial Day. Let us remember that this day is set to honor military personnel who died in service of their country. Memorial Day also marks…

volleyball

Boys Volleyball | Sandburg seeks 26th regional title

Spread the love

Spread the loveBy Randy Whalen Correspondent Coming off the worst season in program history in 2023, Sandburg was not going to settle for anything less than better results this year. Past the midway point of this season, however, the Eagles had a record of 11-8. But they closed the regular season strong, winning 11 of…

Reavis players celebrate after the Rams clinched the South Suburban Red title with a 3-0 win over Oak Lawn. Photo by Xavier Sanchez

Baseball | Red-hot Reavis looks to make noise in postseason

Spread the love

Spread the loveBy Xavier Sanchez Correspondent Reavis is determined to send their head coach Don Erickson into retirement on a high note and will head into the postseason red hot and as South Suburban Red champions. The Rams defeated Oak Lawn 3-0 for the second straight day on May 15 to clinch the conference title.…