Governor Pritzker Signs Landmark Legislation Paying Off $4.1 Billion in Debt
Governor Pritzker today signed SB2803, which pays off $4.1 billion in debt and saves taxpayers hundreds of millions of dollars in interest payments. The Governor and Democratic leaders in the General Assembly gathered Thursday to celebrate the passage of the unprecedented measure, noting that watchdog groups like Civic Federation are praising the fact that Illinois is "in a much stronger financial position than it has been for many years" under Governor Pritzker's prudent leadership and partnership with the General Assembly.
"Today we mark yet another milestone in getting Illinois' fiscal house in order — paying down $4.1 billion in debt for health insurance, college programs, pensions and unemployment," said Governor JB Pritzker. "These actions are saving Illinois taxpayers hundreds of millions of dollars in interest payments and reducing the burden that would fall onto businesses and workers over the next decade. Democrats in the General Assembly are overcoming the difficult circumstances of our past and putting working families first."
"The Civic Federation commends the Governor and other state leaders for moving to further reduce the State's outstanding labilities and thereby improve its financial condition," said the Civic Federation in its Illinois FY23 Analysis and Recommendations Report. "Illinois is now in a position where it can make plans to support budgetary stability, including increasing budgetary reserves and avoiding future bill backlogs."
As noted after the legislation passed both chambers:
This legislation delivers on key priorities laid out in the Governor's budget proposal, including multiple recommendations from the just-released Civic Federation report:
- $2.7 billion to support small business balance sheets through assisting the unemployment insurance trust fund
- $898 million in legacy debt for state employee health insurance - money that previous administrations have punted from one budget to the next.
- extra $300 million payment to our state's pension funds, which will reduce liabilities by $1 billion between now and 2045
- More than $200 million to pay off College Illinois, the 1990s prepaid tuition program for Illinois families that has been on the verge of insolvency for years. This one-time payment will save taxpayers $75 million in unnecessary costs over the remaining life of the program.
SB2803 builds on Governor Pritzker's commitment that working families see the benefits of federal recovery fund dollars through responsible fiscal management, the Back to Business support program, workforce development, rental relief, childcare support, rebuilding Main Streets, public health projects including vaccination clinics, jumpstarting capital projects and infrastructure jobs, rejuvenating the tourism industry and investing in violence prevention.
"We are continuing our responsible use of federal dollars by providing $2.7 billion in tax relief to businesses and benefit protections for workers," said Senate President Don Harmon (D-Oak Park). "At the same time, our investments in college savings, health insurance and the retirement security of teachers, prison guards, state troopers and university workers will again demonstrate strength through stability for the hard-working people of our great state."
"This is what fiscal responsibility looks like," said House Speaker Emanuel "Chris" Welch (D-Hillside). "We're putting $4 billion toward our state liabilities and saving taxpayers more than a billion dollars. It's disappointing that every Republican voted against this responsible legislation, but I'm proud Democrats are united in building a strong financial future for Illinois."
"This General Assembly has made a firm commitment to paying down debt," said Assistant Majority Leader Senator Bill Cunningham (D-Chicago). "By dedicating $2.7 billion to the unemployment trust fund, we are not only doubling down on that commitment, we are protecting employers from higher taxes and employees from benefit cuts."
"I'm proud of this unprecedented change to catch up on some outstanding debts to continue improving our state's credit standing," said Assistant Majority Leader Linda Holmes (D-Aurora). "Allotting $2.7 billion to the Unemployment Trust Fund, as well as substantial earmarks for group health insurance bills, the College Illinois Program and extra pension payments, is a big step to boost our fiscal standing. It also provides a sense of security for Illinois residents, including current and retired state workers and their families."
"With this legislation, the State of Illinois is living up to its obligations, paying off billions in debt and making sure working families aren't left footing the bill," said Majority Leader Greg Harris (D-Chicago). "This is what responsible leadership looks like and I'm grateful to Governor Pritzker and Democrats in the General Assembly for coming to the table and getting this done."
"With our budgets balanced and our bills paid, Illinois is on its best fiscal footing in years," said Assistant Majority Leader Jay Hoffman (D-Belleville). "This legislation builds on that incredible progress, paying off billions in debt, some of it many years-old, and leaving our state better off for future generations."
"I've always been a strong advocate of balanced budgets, and today Illinois Democrats have done even more than simply balance our budget - we've paid down $4.1 billion in debt," said Assistant Majority Leader Robyn Gabel (D-Evanston). "Our efforts today mean taxpayers will save billions over the long run, and comes with the peace of mind that we're putting our fiscal house back in order."
"This is a $4.1 billion down payment on the future Illinois residents deserve," said Assistant Majority Leader Marcus C. Evans, Jr. (D-Chicago). "We've put the state in the best fiscal position it's been in since the 21st century - and we did so while continuing to prioritize the other key investments we're making in a strong state."
"At a time when Illinois families are experiencing rising costs in their everyday lives, it's never been more important to put the interests of taxpayers first - and that's what Democrats in the statehouse did today," said Assistant Majority Leader Elizabeth Hernandez (D-Cicero). "We're paying off $4.1 billion now, saving hundreds of millions of taxpayer dollars and putting Illinois families first."
"This bill is the right thing to do for businesses, labor organizations and everyday Illinoisans," said Senator Elgie R. Sims Jr. (D-Chicago), Chairman of the Senate Appropriations Committee. "I want people to know that if they need temporary help providing for their families, no matter the reason, Illinois has their back. Paying down debt, making additional pension payments and fully funding College Illinois is the fiscally responsible move that could lead to another credit upgrade."
"I've said before that it's a hard truth for some, but Illinois' fiscal condition is in its best shape since September of 2001, and I'm incredibly proud to be part of the team that is making this historic debt payment," said Representative Michael J. Zalewski (D-Riverside). "Everyone from ratings agencies to the Civic Federation is right to praise Illinois for the steps we're taking to put our fiscal house in order, and I'm committed to continuing this work with next year's budget."
"Democrats in the statehouse are proving that we can invest in justice, education, and opportunity while also being responsible with our resources," said Representative William Davis (D-East Hazel Crest). "Illinoisans can be proud to know that our state is in its best fiscal shape in decades - and we'll use the rest of session to bring more progress to working people."
With a functionally non-existent Rainy-Day Fund, Illinois was the only state to have to borrow $3.2 billion from the federal government in the early days of the pandemic, ensuring a steady stream of critical functions and supplies, like PPE at hospitals. The Governor ensured the prompt repayment of the debt back nearly 2 years early, saving taxpayers $82 million in interest costs, and has proposed dedicating nearly $1 billion to rebuilding the Rainy-Day fund across two fiscal years to prepare the state for any future emergency.
The Civic Federation also announced its support for the Governor's proposed contributions to the Budget Stabilization Fund as "a prudent and sustainable use of higher-than-expected revenues."
When Governor Pritzker entered office, his predecessor had left the state with a $3.2 billion deficit, $7.9 billion in unpaid bills, and over $1.2 billion in late payment penalties. Illinois had suffered eight credit rating downgrades in the years 2015 to 2017, and the state's credit rating hovered at just one notch above junk status.