May 25, 2022
  • May 25, 2022
  • Home
  • Mortgage loans
  • Mendoza seeks break for Illinois on pandemic loan interest | Illinois News

Mendoza seeks break for Illinois on pandemic loan interest | Illinois News

By on December 14, 2021 0


By JOHN O’CONNOR, AP political writer

SPRINGFIELD, Ill. (AP) – Illinois State Comptroller Susana Mendoza was among eight state financial officers who urged the Treasury Department on Monday to reinstate interest payment exemptions on tens of billions of dollars loaned to states for unemployment lists that exploded at the start of the covid pandemic19.

Mendoza, a Democrat, was the main signatory of a letter sent to Treasury Secretary Janet Yellen, claiming that the expiration of the waiver on September 6 added to the burden states face in determining how to repay the more than $ 39 billion. dollars loaned since the pandemic’s tragic onset, when many states virtually closed their doors, putting hundreds of thousands of people to work.

“Taxpayers shouldn’t be paying interest just because the pandemic is going on longer than expected,” Mendoza said. “States are wondering how best to replenish their COVID-depleted unemployment funds and they shouldn’t have to do it with the meter running. “

Illinois must repay $ 4.5 billion that the federal government has advanced since early 2020 for soaring unemployment benefits. But with the waiver ending in September, Illinois accrued $ 26.7 million in interest, of which $ 6.3 million was paid. The interest is due to be repaid by September 30, 2022 and could end up costing the state $ 100 million.

Political cartoons

In the letter, the group maintains that “the waiver timeframe was initially determined on the assumption that the pandemic would likely be over and the economy and state governments would be in recovery mode.

“However, it is quite clear to see that this public health crisis is not over, and the benefit of this waiver of interest is still needed.”

The main irritant in the face of renewed interest is that most states are still trying to figure out how to repay billions of dollars in principal. The federal government prohibits repayment of regular state unemployment trust funds, which are subsidized by an employer assessment. They must therefore find other parts of their budgets to pay off the debt.

Follow political writer John O’Connor at https://twitter.com/apoconnor

Copyright 2021 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.