* Peter Hancock at Capitol News Illinois…
Illinois Comptroller Susana Mendoza is asking the nation’s three major credit rating agencies to reconsider the state’s credit rating with an eye toward a possible upgrade.
In an April 28 letter to executives at Moody’s Investors Service, S&P Global Ratings and Fitch Ratings, Mendoza argued that Illinois has virtually eliminated its backlog of past-due bills while keeping current on its bond payments and pension obligations, all in the midst of a global pandemic. […]
Both Mendoza and Gov. JB Pritzker had said in earlier interviews that they wanted to use a portion of the roughly $8 billion in federal relief funds that Illinois expects to receive through the recently-passed American Rescue Plan to pay off the Federal Reserve loans. But new guidelines from the U.S. Treasury Department that were released on Tuesday specifically prohibit using those funds for “payment of interest or principal on outstanding debt instruments, including, for example, short-term revenue or tax anticipation notes, or other debt service costs.”
State Rep. Michael Zalewski, D-Riverside, who chairs the House Revenue Committee, said in an interview Wednesday that he does not believe the relief funds can be used to repay the Federal Reserve and that any repayment plan will have to be “part of a broader budget conversation.”
But Mendoza said in a statement Wednesday that she believes there may be room to negotiate with Treasury on the use of those funds.