(WSIL) — Governor JB Pritzker, Senate President Don Harmon, House Speaker Emanuel “Chris” Welch and Comptroller Susana A. Mendoza announced Thursday that they have agreed on a plan to pay off $2 billion in emergency borrowing thanks, in part, to the state’s strong economic rebound.
The State borrowed $3.2 billion dollars from the federal Municipal Liquidity Facility, of which $2 billion remains outstanding, for cash management and to pay for essential state operations at the height of the COVID-19 pandemic.
“Repaying the federal government is an important step in our efforts to ensure the state remains on sound fiscal footing,” said Governor JB Pritzker. “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.”
The loan was scheduled to be repaid in three installments by December 2023. Instead, the Comptroller will utilize the state’s revenue overperformance and effective cash management to pay off the debt in its entirety within the next budget year. Early repayment of the borrowing will save taxpayers up to $100 million in interest costs.
“Since taking office in the middle of a financial crisis, followed by the COVID-19 crisis, I’ve championed the need to be fiscally responsible and pay down our debts while prioritizing vulnerable populations,” said Comptroller Susana A. Mendoza. “I am pleased that the state’s leadership is also committed to aggressively paying down debt and engaging in responsible fiscal practices.”
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 tax and sales tax) will allow the remainder of the repayment to occur beginning in the next several months.
Illinois and its local governments are expected to receive more than $26 billion in allocations through the American Rescue Plan Act, including $8.1 billion to the state for fiscal recovery funds that can be used through calendar year 2024 to help the state respond to and recover from the pandemic and invest in critical water, sewer and broadband infrastructure.
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