State Rep Sue Scherer said paying down debts early was Springfield "working hard for the people." | Facebook.com/staterepsue
State Rep Sue Scherer said paying down debts early was Springfield "working hard for the people." | Facebook.com/staterepsue
Rep. Sue Scherer (D-Decatur) is saluting Springfield after Illinois paid off the balance of its $302 million bill to the U.S. Department of Treasury on a $2.175 billion Federal Reserve Municipal Liquidity Facility loan due in December 2023.
“Working hard for the people,” Scherer posted on Facebook. “Illinois paid off our Fed Reserve loan early and saved us $82 million in interest. Now we’re talkin’ fiscal responsibility.”
State officials took out the loan to help the state afloat during the height of the COVID-19 pandemic.
All told, the state borrowed $3.2 billion from the federal government through a program that Congress instituted 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.
“Repaying the federal government is an important step in our efforts to ensure the state remains on sound fiscal footing,” Gov. J.B. Pritzker said in a statement. “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.”
While the money was scheduled to be paid off in three installments by 2023, Pritzker said the state’s recent economic performance and stronger-than-expected revenue growth paved the way for state officials to be able to pay off the entire balance sooner than expected.
Even with the loan payments out of the way, government officials concede the state still faces a number of significant fiscal challenges over the foreseeable future.
During a recent news conference, House Majority Leader Greg Harris (D-Chicago) said the proposed budget as it stands now is about $1.3 billion out of whack, The State Journal-Register reported, warning that lawmakers will almost certainly be forced to choose between spending cuts, revenue enhancements or a combination of both in order to survive over the short term.
Earlier officials had expressed hope they would be able to use some of the $8.1 billion in fiscal relief the state stands to receive through the recently-passed American Rescue Plan to pay off the loans, but the Treasury Department recently established that the funds cannot be used to pay off state debt.
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