SPRINGFIELD, Ill. (WAND) - Illinois is saving taxpayers about $82 million after fully repaying a $2 billion loan it took out to cover COVID-19 related expenses.
In 2020, the state borrowed the money from the U.S. Federal Reserve's Municipal Liquidity Facility. A plan to pay off the money early using the state's strong expected revenues was announced at an earlier date by Gov. JB Pritzker, Comptroller Susana Mendoza, House Speaker Emanuel "Chris" Welch and Senate Majority Leader Dan Harmon.
Comptroller Mendoza was able to pay half of the loan in June 2021. There was no federal stimulus money used for repayment, and only regular state revenues. The final $302 million payment has now been made.
The loan was scheduled to be repaid in three installments by December 2023. The state was helped in early repayment by revenues, and especially corporate income tax and sales tax receipts, coming in ahead of projections. Officials said Mendoza got this finished with effective cash management strategies to put the state in a position to quickly pay off the full amount, saving an estimated $82 million in interest.
“With this early repayment, we take another important step toward restoring fiscal stability and predictability to Illinois,” Mendoza said. “I can’t stand seeing taxpayer money wasted on interest – that’s why paying off this loan early was so important for me.”
“Illinois used to be known for kicking the can down the road, but today we’re restoring fiscal stability,” said Pritzker. “Paying back this loan ahead of schedule achieves a level of fiscal prudence not seen in our state for decades. I applaud Comptroller Mendoza and our partners in the General Assembly for not only building fiscal stability, but saving millions of taxpayer dollars along the way.”
Illinois is caught up on Medicaid payments with no additional borrowing in the state plans, officials said, after an MLF loan was needed to cover state medical bills in the pandemic.
The state's backlog of bills is down to $3.8 billion and the state is paying bills within 15 business days, marking the quickest payment cycle in more than 20 years. This signals the state being in recovery mode compared to recent budget challenges, a press release said.
