Illinois Democratic leaders announced Thursday that they have agreed to repay federal pandemic-relief loans more than a year earlier than scheduled, saving taxpayers $100 million in interest.
The plan was announced as Democrats who control the House and Senate head into the final 10 days of the legislative session, still struggling to find ways to close a $1.4 billion deficit for the budget that begins July 1.
Washington lent money to in early 2020, as the COVID-19 pandemic and containment measures left economies battered and hundreds of thousands on the unemployment line. Illinois borrowed $3.2 billion and has repaid $2 billion. The rest was due by December 2023, but the state has money to pay it earlier.
“The federal loan was a lifeline to keep our state and our economy afloat,” said Senate President Don Harmon, an Oak Park Democrat. “That our economy has rebounded so strongly that we can now pay it off early is a testament to the resilience of the people and businesses of the great state of Illinois.”
$870 million is remaining on the principal as of today. But the rebounding economy may not be enough to pay the rest of it off, along with $928 million in interfund borrowing.
During the brief debate over a $42 billion state spending plan introduced in the closing hours of this year’s spring session, the Illinois legislature’s Democratic majority outlined less than $3 billion in spending in the coming year from a massive infusion of federal coronavirus relief money.
With the state in line to receive $8.1 billion from President Joe Biden’s American Rescue Plan, Democrats said they wanted to spend the money judiciously and avoid creating programs that would continue to demand funding after the one-time federal cash influx was gone. They said this year’s plan for the relief money called for $1 billion in infrastructure spending, with the remainder going to items such as hospitals, violence prevention, and tourism and business recovery.
Left unmentioned as lawmakers were approving the budget, however, was the creation of a state fund that gives Gov. J.B. Pritzker authority to spend billions of dollars from the federal aid without first getting approval from lawmakers.
In the end, the state’s spending plan for the budget year that began July 1 counts on using at least another $2 billion from the pandemic relief funds to make up for “lost revenues,” leaving less than $3.6 billion to budget out over the next three years.
If you go the very last paragraph of the story, you’ll see that $144 million has been spent so far to make up for operational costs last fiscal year at the Department of Corrections and Department of Juvenile Justice.
* Fitch Ratings explained how the Essential Government Services Support Fund works last week in its positive outlook on the state’s credit rating…
Illinois’ legislature also enacted a spending plan for American Rescue Plan Act (ARPA) aid, focused on one-time investments rather than recurring operating needs. The plan uses $2.8 billion of Illinois’ $8.1 billion ARPA direct aid distribution on infrastructure and other one-time, or pandemic-specific needs. With this initial allocation, the state appears to have avoided the use of ARPA aid for any material ongoing program costs in this budget.
Additionally, as part of the enacted budget, the state created the Essential Government Services Support Fund (EGSSF) and allocated $2 billion of the more than $5 billion in remaining ARPA aid to flow through the fund. Fitch anticipates the state will primarily use the EGSSF as a cash flow management tool that will assist in ensuring compliance with U.S. Treasury guidelines for ARPA direct aid.
The $2 billion is essentially offset from a budgetary perspective with planned repayment of the MLF loan ($1.045 billion) and interfund borrowing ($928 million), though ARPA aid will not be used for the actual repayments. Fitch will carefully assess the state’s plans for the remaining ARPA direct aid which we anticipate will be focused on non-recurring uses.
* Governor’s office…
The Essential Government Services Support Fund was set up to hold funds that are allowed under federal rules to replace lost revenues of the State. At the time the budget was enacted in May, the final rules and guidance from US Treasury was not available – and the Interim Final Rule was only just released shortly before the end of session.
* US Treasury guidance for states on how to calculate lost revenues from the pandemic that was issued shortly before the end of session…
a. States should look at Fiscal Year 2019 base year revenue by looking at the state’s “own source” revenues to calculate (excluding for example, federal revenues or revenues that are passed through to local governments)
b. Using the same base, calculate state’s average annual growth of the past three fiscal years (FY16 – FY19)
c. Apply average annual growth rate multiplier to annual revenues collected
d. Multiplier applies to the revenue collected in each calendar year
e. Calculate each December 31 for actual revenues
f. Compare projected growth revenue to actuals collected
* And using that formula…
GOMB estimates that Fiscal Year 2019 base revenues according to the US Treasury definition/guidance was approximately $47B, and with the multiplier applied, Calendar Year 2020 revenues should have totaled about $53B. Actual revenues in Calendar Year 2020 totaled about $50B.
* Also from the governor’s office…
This mechanism was created for flexibility for the State to adapt to the rules as understanding of them evolved over the course of the year. Including the replacement revenues in a separate account assists the state in reporting to US Treasury as funds are spent.
At least one Republican was quoted in the story saying the General Assembly should have direct spending authority on that pile of cash. From the governor’s office…
GOMB provides monthly reports to the Legislative Budget Oversight Committee and testifies in front of the committee quarterly.
* The point of all this is that the Trib and Fitch both point out that the governor’s office can use the aforementioned $2 billion to make allowable expenditures in order to free up money to do things like repay the $1 billion left on the Federal Reserve loan. The governor’s office, however, says it’s too early in the fiscal year to say how much it will use.
* It hasn’t been a full week since the last IDPH weekly update, but cases are down about 26 percent from last week after a big spike. Deaths are down by 42 percent, but hospitalizations went up 13 percent, from 1,759 to 1,982. ICU admissions are up ten percent. Ventilator usage is essentially the same (152 a week ago and 150 as of last night). Case and test positivity rates are up a little…
The Illinois Department of Public Health (IDPH) today reported 21,034 new confirmed and probable cases of coronavirus disease (COVID-19) in Illinois, including 87 additional deaths since reporting last November 19, 2021.
Currently, IDPH is reporting a total of 1,784,900 cases, including 26,313 deaths, in 102 counties in Illinois. The age of cases ranges from younger than one to older than 100 years. Since reporting on Friday, November 19, 2021, laboratories have reported 632,533 specimens for a total of 38,528,321. As of last night, 1,982 individuals in Illinois were reported to be in the hospital with COVID-19. Of those, 384 patients were in the ICU and 150 patients with COVID-19 were on ventilators.
The preliminary seven-day statewide positivity for cases as a percent of total test from November 17-23, 2021 is 3.3%. The preliminary seven-day statewide test positivity from November 17-23, 2021 is 4.1%.
A total of 17,031,036 vaccines have been administered in Illinois as of last midnight. The seven-day rolling average of vaccines administered daily is 64,199 doses. Since reporting on Friday, November 19, 2021, 311,308 doses were reported administered in Illinois. Of Illinois’ total population, approximately 67% has received at least one COVID-19 vaccine dose and almost 61% of Illinois’ total population is fully vaccinated according to data from the Centers for Disease Control and Prevention (CDC).
All data are provisional and will change. Additional information and COVID-19 data can be found at https://dph.illinois.gov/covid19.html. Data on the IDPH website will not be updated over the Thanksgiving holiday weekend, but will resume on Monday, November 29, 2021.
Vaccination is the key to ending this pandemic. To find a COVID-19 vaccination location near you, go to www.vaccines.gov.
* Brenden Moore asked several politicos what they were thankful for. This response from Comptroller Susana Mendoza stood out for me...
“For me, it’s my brother still being with us. Last Thanksgiving he was fighting for his life. This Thanksgiving he’s still with us. Complications from COVID-19 cost him his kidneys. But he has a good attitude. He’s a fighter and we’re blessed to have him with us. I’m thankful for the love of family and friends and that we can gather with family and friends including my brother this year. We’ll be celebrating my mother-in-law’s 80th birthday.”
* You may remember that Comptroller Mendoza talked about her brother, Chicago Police Det. Sgt. Joaquin Mendoza, in March…
Back in November, I called him on his birthday to wish him a happy birthday and he had a cough. Two days later - he’s only 56 - he was at Northwestern Memorial Hospital fighting for his life for 41 days. And then about a month later - a month he spent in an inpatient rehab - he’s had tremendous complications. He’s suffered mini strokes in his brain while he was in the hospital. Total, complete kidney failure, so he’ll be on dialysis for the rest of his life.
And I share it because I think it’s important for people to know that when we hear about a 99% survival rate, you know, think about my brother’s situation. Sure he survived, and it’s a blessing for us, but it breaks my heart to see the complications for somebody who’s dedicated his life to public service and to protecting the public as he’s going through this. And it’s no joke. This is very real, and we’re thankful that he’s still with us, but many people are going through something similar. Many people have lost their loved ones. And I seriously, both as a sister and as a comptroller, you know, when we have to order things like body bags, it really hits close to home. And I just ask people, please get vaccinated the first chance you get. Please, do everything to protect yourself and protect your loved ones and let’s get through this together.
I would just say it’s pretty devastating. And I’m so thankful that I can take care of my brother right now when he needs me. There’s so many families who probably feel completely overwhelmed. And I was one of them. I mean, honestly, I never thought I’d tell you that the easiest part of my life right now is managing billions in state debt, but it truly is. I feel so confident and sure of what I’m doing as the comptroller, but it’s certainly a lot heavier of a lift to try to keep my brother healthy. That’s where we’re at. Thank you for asking. I mean, it is something that I can relate to and I know that we’re not alone. Lots of families in Illinois and across the country are going through similar or even worse scenarios with having lost loved ones. But, it’s real and I just ask you to take care of yourselves, please.
The Illinois Department of Employment Security is nearly a month late in filing a report about the state’s unemployment trust fund, according to the Illinois Senate Republican Caucus.
A spokesperson for IDES didn’t immediately respond to a request for comment.
The Republicans said the legislative leaders received a letter from the Illinois Comptroller that IDES failed to submit necessary financial information on the trust fund’s financial activities and is nearly a month delinquent.
“If regular Illinois businesses and families miss financial reporting they are fined and can even face criminal penalties,” said Illinois Senate Republican Leader Dan McConchie, R-Hawthorn Woods. “The governor is not above the law. The UI Trust Fund is deeply in debt and without this report, we have absolutely no idea how big the problem really is.”
Neither the Illinois Comptroller, the House Speaker or Senate President’s office immediately returned a message seeking comment.
* The comptroller and all four legislative leaders were sent this response by the IDES director two weeks ago. It’s quite something, but it basically boils down to IDES has been overwhelmed for more than a year…
Thank you for the letter dated November 4, 2021 regarding financial information necessary for the Annual Comprehensive Financial Report (ACFR). The Illinois Department of Employment Security (IDES) takes its role in providing information essential to completing the ACFR seriously, and we appreciate the opportunity to provide an action plan. The circumstances that caused the delay in the submission of our draft financial statements, footnotes, and Form SCO- 599, Contingencies, Commitments and Related Party Transactions, are described below as well as the estimated timeline to complete.
As a result of the COVID-19 pandemic, the time to complete the prior year audit and the complexity and volume of the financial transactions were significant, and on average 2-3 times as many transactions than in the normal course of the Department’s operations. This resulted in a delay in the posting of the initial SFY 2021 Trust Fund transactions to the general ledger. In addition, the Department’s Trust Fund software application prohibits the user from having two years open concurrently, and although we were current in preparing and recording journal entries on our worksheets, we could not upload any journal entries or prepare reconciliations until SFY 2020 was closed.
It is also important to note that our financial operations and Department of Innovation and Technology (DOIT) staffing resources are stretched across five concurrent audits, and we are preparing to begin a sixth:
▪ RSM Financial Audit
▪ RSM Compliance Audit
▪ KPMG Single Audit
▪ Emergency Unemployment Relief for Government Entities and Non-Profit Organization (EURGENO) Audit
▪ Department of Labor: Bureau of Labor Statistic Audit
▪ OAG Performance Review Audit (entrance conference was 10/27/2021)
IBIS Accrual – DOIT resources have been strained due to high volume processing in our benefit system (IBIS), implementation of seven complex new programs, subsequent system adjustments as a result of new and updated federal laws and guidance, and requests from multiple audits. While the IBIS accrual data has been verified, the auditors have requested that the accrual be documented with a daily match to our benefit payment reports.
PUA Accrual – Given the complexity of the Pandemic Unemployment Assistance (PUA) program accrual and the fact the Department will need to restate the beginning accrual amounts as a result of the last audit, numbers will need to be pulled internally. The DOIT employee who is qualified and able to do this is currently working on a large data file request for the OAG. Once completed, he will start pulling the data for the PUA accrual.
Overpayments – Due to the complexity and volume of transactions, the process for pulling the data has become far more challenging than in the past. In addition, the new processes for waiving recovery of overpayments in both federal and non-federal programs will require that overpayments be placed in different risk buckets to determine the allowance associated with these receivables.
Cash Reconciliations – Due to the extended length of the last audit and staff shortages, the Department contracted an outside public accounting firm, Crowe LLP, to assist in preparing cash reconciliations.
IDES’ Estimated Timetable to Completion:
IBIS Accrual – The Department is building the IBIS accrual by day per the auditor’s request. We anticipate this will be completed and verified no later than November 12, 2021.
PUA Accrual – DOIT is currently pulling large amounts of data for the OAG for the RSM Financial Audit. Once completed, pulling the data for the PUA accrual will begin. We anticipate this will be completed and verified no later than November 17, 2021.
IBIS Overpayments – The Department is reviewing this large data file for accuracy. We anticipate this will be completed and verified no later than November 12, 2021.
PUA Overpayments – The Department is reviewing this large data file for accuracy. We anticipate this will be completed and verified no later than November 12, 2021.
Cash Reconciliations – The Department is working with staff from Crowe LLP to complete the cash reconciliations. We anticipate these reconciliations will be completed and verified no later than November 17, 2021.
Once these tasks are completed, the Department will prepare and post journal entries to submit to the IOC for GAAP. The Department will then prepare Form SCO-599, the financial statements, and footnotes. We anticipate this to be completed by end of day November 30, 2021.
Just to follow up one last time: Young Americans for Liberty (YAL)—the nation’s most active youth libertarian organization—has just launched a new petition to end the seemingly “endless” COVID-19 pandemic, expecting to garner 100,000 signatures from students, faculty, and alumni in the coming weeks.
See the official press release below. Are you interested in the story?
Thank you,
Luka
Um, petitions don’t end pandemics. Vaccines, proven treatments and mitigations end pandemics.
Following an unprecedented commitment to a public appointment process, Michael Kelly has been appointed State Representative for the 15th Legislative District, replacing former state Rep. John D’Amico who announced his resignation earlier this month.
The appointment process, as required by law, had to happen within 30 days of the vacancy announced on Nov. 5, 2021.
“We owed it to the people of the 15th Legislative District to make sure public input informed this appointment,” said state Sen. Ram Villivalam (D-Chicago), committeeperson for the 39th Ward. “As a result, we had seven applicants up for consideration who we heard from today for close to four hours and all of the respective elected committeepersons voted for an applicant that represents the values of the 15th Legislative District and the priorities expressed by our communities during the last few weeks.”
Villivalam was the Chief Co-Sponsor of Senate Bill 825, which was signed into law in June and includes a process to the legislative appointment procedure, where none had been before.
Per the new statute, prior to holding today’s meeting to fill the vacancy, the committee made public:
• The names and contact information for the Committeepersons legally tasked with the appointment
• Information on how to apply or submit a name for consideration as the appointee
• The date, time and location of today’s in-district and virtual meeting to fill the vacancy
The appointment committee also sent multiple email blasts, made multiple social media posts, purchased ads in multiple newspapers, contacted members of the press, made themselves publicly available to the communities they serve, and invited press to the in-person and livestreamed appointment meeting.
Kelly’s appointment to fill out D’Amico’s term was not a surprise. In political circles he was considered the favorite, with the behind-the-scenes backing of D’Amico, who had served in the General Assembly since 2004.
Edgebrook area resident Michael Rabbitt said that he helped start the social justice ministry at the Saint Mary of the Woods Parish and launched Neighbors for Affordable Housing. He said that he would support lifting the statewide ban on rent control, explaining that towns should make their own decision on the matter, and that he supports the proposed 297-unit apartment complex at 8535 W. Higgins Ave., which Alderman Anthony Napolitano (41st) opposes. It would include nearly 60 affordable units.
“I have a track record as a problem solver (and) a community connector,” said Rabbitt, who works as a business transformation leader for Argonne National Laboratory.
Rabbitt, who is supported by SEIU Healthcare and the political group 39th Neighbors United, launched his campaign prior to D’Amico’s retirement announcement and plans to challenge Kelly next year in the primary.
Kelly has worked on previous campaigns for D’Amico, Ald. Samantha Nugent (39th) and her predecessor, Ald. Margaret Laurino, who is D’Amico’s aunt. D’Amico was not part of the process to pick his replacement, but voiced his support after the appointment. […]
As for Kelly, “he voted in two Republican primaries,” [Anthony Joel Quezada, 35th Ward Democratic committeeperson] said. “I just didn’t see a lot of political experience and history, and I didn’t get a lot of calls from community members supporting him. But, again, that does not necessarily speak to the full character of Mr. Kelly. I wish him the best of luck in his next chapter.” […]
Rabbitt has already launched a campaign for the office. Brophy and Melaniphy said they would not run, while Kehoe said she likely wouldn’t either.
Kelly said he took a GOP ballot in 2010 because his union endorsed Judy Baar Topinka in the primary. He took a Republican ballot two years later as a favor to a friend.
Committeeperson Quezada, by the way, had an infinitesimal 0.01 percent of the weighted vote. He talked a lot, but had pretty much zero influence. Rabbitt was already running against D’Amico, which ruled him out.
* D’Amico’s backing and this list of Kelly’s endorsements is what got him the win…
• Chicago Fire Department Local 2 - Jim Tracey
• Associated Fire Fighters of Illinois - Chuck Sullivan
• IBEW Electricians Local 134 - Michael Cudzik
• Carpenters Local - Kevin O’Gorman
• Chicago Laborers District Council, LiUNA - Jim Connolly
• International Union of Operating Engineers Local 150 - James Sweeney
• Sprinkler Fitters Local 281 - Tom Collins
• Sheetmetal Workers International Association, SMART Local 265 - John Daniels
• Sheetmetal Workers Local 73 - Ray Suggs
• IBEW Electricians Local 176 - Mike Clemens
• Stationary Engineers Local 399 - John Hanley
• Plumbers Union Local 130 - James Coyne
• Iron Workers Local 62 - Paul Wende
• Teamsters Joint council No. 25 - Terrence Hancock
• Plumbers and Steamfitters Local 137 - Aaron Gurnsey
Kelly read that list at the meeting. Those trade unions are very active in that part of the world. AFSCME and the CTU did not endorse a candidate. Interestingly enough, Sen. Villivalam comes out of SEIU Healthcare, which is apparently backing Rabbitt.
