This article has been updated to clarify the agreement businesses have to pay back the state.
SPRINGFIELD, Ill. (WCIA) — As of Monday afternoon, Illinois has no more COVID-related debts with the federal government.
In November, Governor J.B. Pritzker announced a bill that would eliminate the rest of the pandemic unemployment debt by using the state’s surplus in revenue to pay it off. The bill was supported by Democrats, Republicans, as well as labor unions and business groups, before being signed into law by Pritzker Monday.
Since the November announcement, Illinois Comptroller Susana Mendoza said she began start setting money aside in anticipation of Pritzker signing the bill.
“We have been preparing for this day to pay back the remainder of the COVID-19 unemployment insurance loan and stop the interest-meter running for taxpayers,” Mendoza said.
Now the bill is signed into law, she began transferring money to the Illinois Department of Employment Security so they can end the debt with the federal government. Mendoza says the state would save at least $20 million in interest costs if the bill was not paid by September.
Along with the loan, an extra $450 million was placed into the unemployment trust fund to strengthen it. As businesses pay back over the next 10 years, the money will go into the Rainy Day Fund, something Mendoza has worked to build up.
“Any chance the state has to contribute more money to the Rainy Day Fund, we should take,” Mendoza said. “Catching up to other states’ Rainy Day reserves signals to the bond-rating agencies how serious Illinois is about fixing our finances.”
Congress sent more than $7.5 billion in funding to Illinois during the course of the pandemic. The state of Illinois also borrowed from the Federal Reserve’s Municipal Liquidity Fund but paid that off.