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Illinois was an outlier for borrowing from the Federal Reserve
program that bought bonds from governmental bodies that needed
immediate assistance.
“As it turned out, almost nobody sold them those bonds because
they didn’t need to. The exception being the state of Illinois
and the New York Metropolitan Transit Authority, the MPA,” said
Committee for a Responsible Federal Budget Senior Vice President
Marc Goldwein.
Illinois Comptroller Susana Mendoza said with the loan now paid
off, Illinois taxpayers will save $82 million in interest
payments.
“With this early repayment, we take another important step
toward restoring fiscal stability and predictability to
Illinois,” Mendoza said in a statement Wednesday. “I can’t stand
seeing taxpayer money wasted on interest – that’s why paying off
this loan early was so important for me.”
The loan was scheduled to be repaid in three installments by
December 2023, the comptroller’s office said.
The state still has an outstanding $4.5 billion debt for
unemployment insurance, which comes with potentially $100
million in interest if not paid off.
While Illinois Manufacturers’ Association President and CEO Mark
Denzler said he supports Mendoza’s request to have the federal
government waive the interest because the pandemic is ongoing,
he doesn’t foresee it being granted. In the meantime, the debt
will still be owed.
“And that’s money that can be better spent on things like health
care and infrastructure and public safety and economic
development,” Denzler told The Center Square. “Instead we’re
likely to be using that to pay interest on a multi-billion
dollar debt.”
Employers warn if the unemployment debt is not addressed, taxes
will be increased on job creators and benefits for unemployed
workers will be cut.
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