(The Center Square) – Illinois and other states that still owe tens of billions of dollars in combined pandemic unemployment debt are asking for a waiver of interest costs.
Illinois Comptroller Susana Mendoza said taxpayers shouldn’t have to pay interest on the $4.5 billion loan because the pandemic hasn’t yet ended.
Illinois taxpayers faced an interest bill of about $20 million. That amount could reach more than $100 million if left unpaid for a year, Mendoza said.
Illinois joined New York, Colorado, Pennsylvania, Connecticut, New Jersey, Massachusetts and Minnesota in asking for the waiver.
The interest waiver on these advances expired on Sept. 6, 2021.
“Taxpayers should not be on the hook for interest just because the pandemic is lasting longer than projected,” Illinois Comptroller Susana Mendoza said. “States are wrestling with how best to replenish their COVID-depleted unemployment funds and they should not have to do that with the meter running.”
The letter said the deadline for repayment assumed the pandemic would be over in 12 months.
“We believe the waiver deadline was originally determined under the assumption that the pandemic would likely be over and that the economy and state governments would be in recovery mode,” the signatories wrote. “However, it is quite plain to see that this public health crisis is not over, and the benefit provided by this interest waiver is still necessary.”
Illinois owes $4.5 billion in outstanding advancements, Mendoza said.
The advances are generating interest at a rate of 2.27%, amounting to more than $187.5 million as of Dec. 6, 2021. Illinois has accrued $19.6 million in interest since the waiver expired and after paying $6.3 million in September.