SPRINGFIELD – Benefiting from more-than-expected influx of state revenue, the Illinois Comptroller’s Office Susana Mendoza announced that it made the final payment of a $2 billion federal loan used to cover COVID-19 expenses nearly two years ahead of schedule.
Paying $302 million before the required loan repayment date in December 2023 saves state taxpayers an estimated $82 million in interest, Mendoza’s office said in a news release Wednesday.
One of two loans from the US Federal Reserve to the state for pandemic expenses, $2 billion was granted in December of 2020. Nearly $1.8 billion was used in Illinois medical bills, and the remaining $200 million was earmarked for health insurance for state employees.
Mendoza’s office was able to use higher-than-expected government revenues to repay the loan, under an agreement announced in May by Governor J.B. Pritzker, Mendoza and Democratic legislative leaders.
According to the plan, the state comptroller will “take advantage of the excessive performance of state revenue and effective cash management to pay off the debt in full during the next budget year,” according to a press release issued at the time that promised to provide up to $100. million in interest costs.
“Any bills that are worth the interest, we target them first. It’s just a matter of maximizing the revenue that comes from paying the right bills first,” said Abdoun Balash, a Mendoza spokesman. “In this case, it was the revenue that came in better than expected that allowed us to More early repayment than we had hoped for as of May.”
Illinois saw an increase of about $6.8 billion in the General Revenue Fund in the fiscal year that ended last June, according to a report from the Government Prediction and Accountability Commission.
This isn’t the first time Illinois has borrowed from the Federal Reserve’s Municipal Liquidity Facility. The state borrowed $1.2 billion in June of 2020 to pay for Medicare-related expenses, bringing the final payment for that loan in June 2021.
On Thursday, the Mendoza office also announced the extension of a program that prohibits unpaid fines that are deducted from state income tax refunds for families eligible for the earned income tax credit. The program, which aims to provide relief to low-income families during the pandemic, has been extended for a second year.
“Once again this year, families with a financial edge are relying on income tax refunds to pay bills they have been putting off because COVID has caused hardship,” Mendoza said in the statement.
Under state law, Illinois cities and towns can require the controller to withhold unpaid traffic tickets, parking tickets, fines and other court rulings from a taxpayer’s income tax return.
Municipalities can still seek to collect fines through private collection agencies or other means.