State comptroller claims $ 82 million in savings from early repayment of COVID-19 loan
SPRINGFIELD – Taking advantage of larger than expected state revenues, the Office of Illinois Comptroller Susana Mendoza has announced it has made final payment on a $ 2 billion federal loan used to cover expenses related to COVID-19 almost two years in advance.
Paying the $ 302 million before the required loan repayment date of December 2023 saves state taxpayers about $ 82 million in interest, the Mendoza office said in a press release on Wednesday.
One of two US Federal Reserve loans to the state for pandemic-related expenses, the $ 2 billion was granted in December 2020. About $ 1.8 billion was used on Medicaid bills. Illinois, and the remaining $ 200 million has been allocated to state employee health insurance. .
The Mendoza office was able to use higher-than-expected state revenues to repay the loan, under a deal announced in May by Gov. JB Pritzker, Mendoza, and Democratic legislative leaders.
As part of this plan, the state comptroller would “use the outperformance of state revenues and effective cash management to repay debt in full in the next fiscal year,” according to a press release. published at the time that promised savings of up to $ 100. million interest charges.
“All invoices that bear interest, we target them first. It’s just about maximizing the revenue generated by paying the right bills first, ”said Abdon Pallasch, spokesperson for Mendoza. “In this case, it was the above-forecast revenues that allowed us to increase our prepayment even more than we had hoped for in May.
Illinois saw an increase of nearly $ 6.8 billion in the General Revenue Fund in the fiscal year that ended last June, according to a report from the Commission on Government Forecasting and Accountability.
This is not the first time Illinois has borrowed from the Federal Reserve’s Municipal Liquidity Facility. The state borrowed $ 1.2 billion in June 2020 to pay for Medicare-related expenses, making a final payment on that loan in June 2021.
On Thursday, the Mendoza office also announced the extension of a program banning the deduction of unpaid fines from income tax refunds for families eligible for the income tax credit. The program, which aims to support low-income families during the pandemic, has been extended for a second year.
“Again this year, financially struggling families are relying on their income tax refunds to pay the bills they deferred because COVID has caused hardship,” Mendoza said in the statement.
Under state law, towns and cities in Illinois can ask the comptroller to withhold unpaid traffic and parking tickets and other fines and court judgments from a taxpayer tax return.
Municipalities can still seek to collect fines through private collection agencies or other means.