The self-congratulation was effusive when the state’s high elected officers introduced plans to repay a mortgage from the federal authorities.
Provided that Illinois faces a mountain of debt, it’s all the time a great factor when our elected officers get collectively and comply with, nonetheless barely, cut back it.
That’s why Gov. J.B. Pritzker’s announcement final week that the state plans to repay a remaining $1.36 billion debt to the federal authorities is each welcome and considerably shocking.
It’s too usually been the case that legislators can’t wait to spend no matter money is mendacity round, working up additional money owed moderately than lowering present ones.
So give Pritzker, his legislative minions and enterprise and labor teams credit score for agreeing on what passes for a monetary repair on this state.
Due to Illinois’ poor monetary situation throughout the coronavirus pandemic, it was pressured to borrow $4.5 billion from the federal authorities to maintain its unemployment-compensation belief fund in operation.
The fund, which offers monetary assist to those that’ve misplaced their jobs, was basically bust earlier than the feds got here to Illinois’ assist.
Illinois was considered one of 22 states needing help, and it’s considered one of simply 4 that hasn’t repaid the debt.
The state earlier had paid $2.7 billion again, and there was a prolonged dialogue as to when Illinois ought to pay the remaining.
Per the settlement, which is permitted by the state’s sturdy income development, Illinois can pay the remaining debt to the feds plus deposit an extra $450 million into the fund to maintain afloat.
That $450 million represents an interest-free debt the fund owes the state.
Simply because the longest journey begins with however one step, paying off the state’s $200 billion-plus pension, medical insurance and federal borrowing money owed is equally difficult.
Think about that Illinois paid off its $4.5 billion debt to the federal authorities from the numerous billions of {dollars} in coronavirus monetary assist it obtained from the federal authorities.
This association is akin to a fellow borrowing cash from a financial institution after which repaying the debt utilizing cash the financial institution gave him in a without-strings present.
Below these circumstances, neither the feds nor the borrower deserve plaudits for monetary administration or sobriety.
There’s additionally the extra downside of the unemployment fund needing $1.7 billion to revive it to vital monetary power.
It will get $450 million in loans as a part of the settlement the governor introduced, however it’s going to take extra money from employers in unemployment taxes to attain the long-term aim.