By: Mark Glennon*
“Our state has made great progress with its finances, even in the face of the pandemic. We are paying our bills on time.” That’s a frequent message from both Gov. JB Pritzker and Comptroller Susana Mendoza.
That claim is mighty hard to reconcile with a call for more bailout assistance from federal taxpayers, but Mendoza did both in a Friday letter printed in the Chicago Sun-Times.
While claiming progress on Illinois’ fiscal crisis, she repeated the request she made last month to the federal Treasury Department. In that request, she and financial officers from seven other states asked for a waiver of any interest on loans made by the Treasury during the pandemic to shore up broke trust funds used to pay unemployment insurance. Illinois owes the Treasury about $4.5 billion on its loan and interest costs will be substantial. Over $100 million will accrue over a year.
So, Mendoza is basically asking federal taxpayers, which include Illinoisans, to give up interest accruing in their favor on the loans.
Most states have either repaid what they borrowed for their unemployment funds or never borrowed in the first place. Illinois is one of ten states with loans still outstanding. The other states that joined Mendoza’s request to the Treasury are, like Illinois, heavily Democratic — New York, Colorado, Pennsylvania, Connecticut, New Jersey, Massachusetts and Minnesota. A recent research report detailed how federal pandemic bailout money, in general, has gone disproportionately to Democratic states.
As for Mendoza’s claim that Illinois is paying its bill, that’s simply not true. The state entirely ignored the hole in its unemployment fund in its current budget and future budget forecasts. In reality, the state will not just have to repay the loan but must also restore the fund to a sound balance, which will probably take another $1.5 billion at least, which was the balance before the pandemic. Nor does Illinois pay its full bill for the 800-pound gorilla, pensions. Year after year it contributes far less to its pension funds than actuaries say is required to prevent unfunded liabilities from growing.
Mendoza supported her claim that Illinois is paying its bills by saying, as she frequently does, that Illinois shrunk its bill backlog by about 80% since its historic high of $16.7 billion during the 2015-2017 budget impasse.
That’s meaningless. Illinois borrowed $6 billion through a bond offering to pay down the backlog. That just kicked the can, moving the debt from one account to another. And the bill backlog is just one of hundreds of accounts the state has, making it a meaningless index of how the state is doing. The backlog account can be pushed down simply by ignoring other debts, as it has done with the unemployment fund loan and pensions.
It’s also extremely misleading to claim that resolving the budget impasse of 2015-2017 brought down the bill backlog. That impasse was resolved concurrently through the massive tax increase in 2017 — $5 billion worth — that the General Assembly passed by overriding a veto by then-Governor Bruce Rauner. The backlog began to drop when that new revenue started coming in at the end of 2017. Rauner and the General Assembly both handled the budget impasse poorly, but it was the tax increase that brought in the money to help pay down the backlog.
Finally, remember when you hear claims about Illinois’ progress on budget matters, that it’s floating on a bubble of federal bailout money. Total cash given to the state, its municipalities and the private sector exceeds a stunning $180 billion for Illinois alone. It won’t last, and nothing has been done to fix the state’s underlying structural deficit.
*Mark Glennon is founder of Wirepoints.
Earlier relevant Wirepoints columns
- Deputy Governor Andy Manar’s Deceitful Response To Wirepoints – Wirepoints Original, December 6, 2021
- Some ‘plan.’ Illinois wants more federal bailout money for unemployment trust fund. – Wirepoints,
- Illinois 2022 budget: The state’s financial cliff will be waiting after the federal largesse runs out,
- Susana Mendoza Just Can’t Stop With Her Biggest Whopper,
- Digging out or shoveling in? Pritzker’s great leap backward, February 15, 2019 – Crain’s
- Snake oil, the budget impasse and Illinois’ $1 billion in late payment penalties, January 29, 2018
Audio and summary 
If this bill passes, say goodbye to local control over all Illinois parks and expect to see open drug and alcohol use, needles, no sanitation and fire hazards, but no ordinary park users.
There are still too many politicians and political writers talking about the inevitability of taxpayers being “on the hook” for government debt and interest thereon. There is truth to that inevitability. BUT THERE IS ALSO AN EXTREMELY GLARING OMMISSION. It is that OMMISSION that exposes the fallaciousness of these “concerns for taxpayers.” These taxpayers “on the hook” are not anyone any of us know. Why? Because they are not yet living. Whether one counts unborn children as humans or not, it is they that are “on the hook.” These future taxpayers do not have a vote in the future they have yet to… Read more »
it is never enough for Il democrats!!!!!
Be careful, she’s got an attractive women with an electric smile!
I thought the Biden wh was praising Illinois as a state that was spending thier covid fed $bucks$ proper?? Dishen out the “free stuff” w no end in sight, smoothed over w a mountain of Mendoza flimflam… Anyway, can’t jb just use his secret $2 billion covid fed slush fund to make all the bills disappear?? (oooh sorry, forgot, sure all that $2 bill is already promised to our pub sec heros)
Mendacious Mendoza –
mendacity (mɛnˈdæsɪtɪ)
n, pl -ties
1. the tendency to be untruthful
2. a falsehood
Imagine what Illinois would be like if we elected different politicians – ones who worked as hard to solve our problems as the current batch do to cover them up.
If they don’t waive the interest payments before this years mid-term elections the state is screwed. Add in the fact that at some point in the next two to four years we will experience another economic downturn. At that point Illinois will be treading water at the deep end of the pool without a lifesaver in sight.
Funny how all the praise regarding Illinois’ fiscal position today runs completely counter to their arguments behind the Fair Tax. Remember the looming fiscal disaster if it didn’t pass? Remember everyone getting a tax hike if it didn’t pass? No money for education or social services? Yet they somehow found a way to get our fiscal house in order under a flat state income tax. Imagine that.
Every time the IL Dems brag about this is just their admittance that a graduated state income tax was never necessary and they were completely wrong on the matter.
Excellent point.
Leave it to Mendoza to focus on the 2% ($100M) while completely ignoring the 98% ($4.5B). Guessing she’s hoping the entire debt will be wiped out eventually.
If you were a Democrat, wouldn’t you? Shame on the establishment Republicans who enabled the bailout hoax on America.
Mendoza voted to make the tax hike temporary in 2011, which led to the massive bill backlog in 2017, then took out a huge loan to pay down that backlog, and now pats herself on the back. There is only one thing that deserves any credit: inertia.
The fate of Detroit awaits us all!
Only if you stay in Illinois. Did the people of Illinois sign a suicide pact?
How can you tell if Illinois Democrats are lying? Their lips move. People are numb to it now – they don’t expect anything other than bloviating and lies from the Democrats.
Lies from the democrats,crickets from republicans,theyre all complicit
Thank you for the update.
Why is your report not the headline news in the Chicago Tribune and on the major TV stations in Chicago?
Wirepoints doesn’t support the media narrative, that’s why!
This is a point of view of a complainer; nothing can be done.
I seek a point of view of an engineer; everything can be done.
Thank you Wirepoints! The truth. Very hard to find from Illinois politicians.
There is a popular metaverse project mapping real world addresses to purchasable virtual property (nft’s). Property values are somewhat related to real life values, and the game is developing rapidly with updates and innovation. When people can make money (and they are, a lot) they pay attention. Think fantasy football but add zeroes. This will eventually expose Chicago and Illinois corrupt and fiscally insupportable practices of taxation and spending, TIFs and crony socialism. How? Virtual Chicago property owners will see their values languish as in real life. These owners are sophisticated and tech savvy. They have power to effect social… Read more »
Pathetic absolutely pathetic and disgusting lie after lie after lie.
Illinois offers pensioners dental insurance. My dentist requires payment up front when I have work done because at last report Illinois is paying claims 565 days post treatment.
565 days … that’s a year-and-a-half behind. Try paying your bills a year-and-a-half late and see where that lands you.
If I’m not mistaken the state is still paying 1% per month or 12% annual in late fees after the the first 90 days. This is in a near zero interest rate environment. Why was this not changed to reflect current rates. At most it should be 4% per year. How many millions or billions does this add up to since rates were near zero. I read that companies were started who pay you upfront (95%) and get the interest and principal owed paid to them so they are not in any hurry to get paid since they are making… Read more »
They pay late fees because it’s a reward to vendors, many of whom are politically connected.
Mendoza isn’t lying. She’s sending out checks. The backlog has gone down. It’s just the revenue isn’t sustainable because it’s from the feds.The structural deficit has not been addressed.
As for the disproportionate money to Dem controlled states, Covid hit the population centers hardest.
We would sometimes receive checks, that with the lates fees and compounding, the interest would almost equal the initial claim for treatment.
Interesting … I hadn’t heard that before. 12% per annum posst 90 days?
If true and it takes a year and a half to pay the bill, I’m in for some serious interest. By my calculation about
Outrageous! No wonder the state is worse than broke.
If you’re a provider with a limited number of state employees as patients, the interest with late fees is a better payoff than the stock market. You can wait. However, if all your patients are state employees from, say a nearby prison or state university, you can’t wait 565 days. Quite a few downstate dentists have gone bankrupt waiting for state claims to be paid