Wednesday, November 25, 2020
SPRINGFIELD – Gov. JB Pritzker announced Wednesday his plan to borrow $2 billion at below-market rates from the Federal Reserve for the purpose of paying the state’s bills. The Governor’s Office of Management and Budget forecasts revenues this fiscal year will be $3.9 billion less than projected because of the COVID-19 pandemic.
Illinois State Comptroller Susana A. Mendoza offered this statement in support of Gov. Pritzker’s action:
“The General Assembly in May of 2020 voted for, and the governor signed, a budget authorizing up to $5 billion in borrowing from the Federal Reserve. I take my responsibility to taxpayers as the state’s chief fiscal and accountability officer very seriously and only authorize targeted borrowing when it is in the best interests of the taxpayers of Illinois and as a tool of last resort.
“During this pandemic, the Federal Reserve is allowing states to borrow at below-market rates. That below-market rate opportunity is set to expire Dec. 31, making it necessary to act quickly.
“Given the lack of assurance of additional federal aid coming any time soon, I cannot justify borrowing more than $2 billion of the $5 billion authorized at this time. The $2 billion is necessary given that this targeted borrowing will allow us to stabilize Illinois’ health care system in the middle of a global pandemic and a COVID-19 spike here in Illinois. Allowing our health care system to collapse would be fiscally irresponsible and morally indefensible.
“The Illinois Office of Comptroller will use federal matching dollars to turn the $2 billion into $3 billion to pay critical medical bills and avoid paying late-payment interest penalties. Our responsible approach will stretch every borrowed dollar to its maximum benefit to taxpayers.
“This targeted borrowing is just one component of a comprehensive budget plan, driven by the governor and the legislature, that must include spending reductions.
“The borrowing will be paid back over a three-year period. We continue to strongly urge Congress to send some relief to all 50 states for the lost revenues due to COVID-19. Any new federal stimulus dollars will be earmarked for paying this back.”