By John O’Connor, political writer for the Associated Press
SPRINGFIELD, Illinois (AP) – Illinois’ financial watchdog Susana Mendoza was among eight state finance officials on Monday urging the Treasury to reinstate interest-payment waivers on tens of billions of dollars loaned to states for unemployment lists that exploded when her first appearance. COVID-19 pandemic.
Mendoza, a Democrat, was the lead signer of a letter sent to Treasury Secretary Janet Yellen asserting that the exemption’s expiration on Sept. 6 has added to the burden states face in determining how to repay the more than $39 billion lent since its tragic early days. The pandemic, when many countries effectively shut down, putting hundreds of thousands out of work.
“Taxpayers shouldn’t be in trouble just because the pandemic is lasting longer than expected,” Mendoza said. “States are grappling with how best to replenish COVID-depleted unemployment funds and shouldn’t do so with the counter running.”
Illinois has to repay the $4.5 billion the federal government has provided since early 2020 for high unemployment benefits. But as the sun set in September, Illinois had accumulated $26.7 million in interest, of which $6.3 million had been paid. The interest must be paid by September 30, 2022, and could end up setting the state back $100 million.
In the letter, the group asserts that “the deadline for the exemption was originally set on the assumption that the pandemic may be over and that the economy and state governments will be in recovery mode.
“However, it is abundantly clear that this public health crisis is far from over, and the benefits that waiving benefits provide are still essential.”
The main thrill in the face of renewed interest is that most countries are still trying to figure out how to repay billions of dollars in principle. The federal government prohibits reimbursement from regular state unemployment trusts, which are backed by an employer assessment. So they have to find other parts of their budgets to squeeze debt.
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