Tag: Susana Mendoza

Comptroller asks for upgrade to Illinois’ worst-in-nation credit

Mary Pat Campbell

Link:https://www.thecentersquare.com/illinois/comptroller-asks-for-upgrade-to-illinois-worst-in-nation-credit/article_464a70c6-8862-11ec-b879-afe32c50f8c6.html utm_term=0_3386e99c24-8d6a8659cc-71461060

Excerpt:

Illinois Comptroller Susana Mendoza is asking the credit ratings agencies to upgrade Illinois’ worst-in-the-nation status.

S&P Global has Illinois at BBB. Moody’s has the state at Baa2. That’s after upgrades from the agencies last year. Fitch has Illinois at BBB-.

“My office is doing everything possible to manage the current backlog of bills and address Illinois’ finances head-on,” Mendoza said in a letter to the agencies that her office announced Monday. “The Illinois Office of Comptroller urges you to consider these positive factors and progress made in strengthening Illinois’ financial position when evaluating Illinois’ creditworthiness.”

Mendoza said in the letter she has paid back recent borrowing from a federal program. Illinois was the only state to borrow from the Federal Reserve’s Municipal Liquidity Fund for a total of $2.6 billion.

Author(s): Greg Bishop

Publication Date: 8 Feb 2022

Publication Site: The Center Square

What Illinois didn’t tell you about its celebrated early payment of federal loan – Wirepoints

Mary Pat Campbell

Link: https://wirepoints.org/what-illinois-didnt-tell-you-about-its-celebrated-early-payment-of-federal-loan-wirepoints/

Excerpt:

In fact, the state originally did intend to pay off the Federal Reserve loan with other federal bailout money from ARPA, the American Rescue Plan Act, according to The Bond Buyer. But the “Treasury threw a wrench in repayment prospects” when the initial federal guidance barred the use of ARPA aid for debt repayment. “The state lobbied for a change in a letter to Treasury Secretary Janet Yellen. But as state tax collections turned rosier, state leaders opted instead to cover repayment with tax collections,” says The Bond Buyer.

The bottom line is that all of us, as federal taxpayers, will bear the cost of the federal bailout, for Illinois and other states, whether through higher taxes to repay the Treasury or inflation created by Federal Reserve money creation. And Illinois will be worse off because only Illinois borrowed extra and incurred interest costs.

So, no, Governor Pritzker, paying back this loan ahead of schedule doesn’t mean Illinois achieved a “level of fiscal prudence not seen in our state for decades.”

Author(s): Mark Glennon

Publication Date: 7 Jan 2022

Publication Site: Wirepoints

Comptroller Mendoza claims Illinois paying its bills but needs more federal bailout to avoid a big one – Wirepoints Quickpoint

Mary Pat Campbell

Link: https://wirepoints.org/comptroller-mendoza-claims-illinois-paying-its-bills-but-needs-more-federal-bailout-to-avoid-a-big-one-wirepoints-quickpoint/

Excerpt:

As for Mendoza’s claim that Illinois is paying its bill, that’s simply not true. The state entirely ignored the hole in its unemployment fund in its current budget and future budget forecasts. In reality, the state will not just have to repay the loan but must also restore the fund to a sound balance, which will probably take another $1.5 billion at least, which was the balance before the pandemic. Nor does Illinois pay its full bill for the 800-pound gorilla, pensions. Year after year it contributes far less to its pension funds than actuaries say is required to prevent unfunded liabilities from growing.

Mendoza supported her claim that Illinois is paying its bills by saying, as she frequently does, that Illinois shrunk its bill backlog by about 80% since its historic high of $16.7 billion during the 2015-2017 budget impasse.

Author(s): Mark Glennon

Publication Date: 3 Jan 2022

Publication Site: Wirepoints

Comptroller Mendoza claims Illinois paying its bills but needs more federal bailout to avoid a big one – Wirepoints Quickpoint

Mary Pat Campbell

Link: https://wirepoints.org/comptroller-mendoza-claims-illinois-paying-its-bills-but-needs-more-federal-bailout-to-avoid-a-big-one-wirepoints-quickpoint/

Excerpt:

Most states have either repaid what they borrowed for their unemployment funds or never borrowed in the first place. Illinois is one of ten states with loans still outstanding. The other states that joined Mendoza’s request to the Treasury are, like Illinois, heavily Democratic — New York, Colorado, Pennsylvania, Connecticut, New Jersey, Massachusetts and Minnesota. A recent research report detailed how federal pandemic bailout money, in general, has gone disproportionately to Democratic states.

As for Mendoza’s claim that Illinois is paying its bill, that’s simply not true. The state entirely ignored the hole in its unemployment fund in its current budget and future budget forecasts. In reality, the state will not just have to repay the loan but must also restore the fund to a sound balance, which will probably take another $1.5 billion at least, which was the balance before the pandemic. Nor does Illinois pay its full bill for the 800-pound gorilla, pensions. Year after year it contributes far less to its pension funds than actuaries say is required to prevent unfunded liabilities from growing.

Author(s): Mark Glennon

Publication Date: 3 Jan 2022

Publication Site: Wirepoints

Illinois Comptroller says state’s finances heading in the right direction

Mary Pat Campbell

Link: https://www.thecentersquare.com/illinois/illinois-comptroller-says-state-s-finances-heading-in-the-right-direction/article_71e04696-c56e-11eb-a0f7-8f7ebd2412e4.html#new_tab

Excerpt:

 Illinois Comptroller Susana Mendoza said the state’s financial condition is moving in the right direction despite a structural deficit, multi-billion dollar backlog of bills and one of the highest unfunded pension liabilities in the nation. 

During a virtual conversation Friday with Southern Illinois University’s Paul Simon Public Policy Institute, Mendoza said that wasn’t the case last year when things looked dire when the COVID-19 pandemic caused a delay in tax collections.

“That is why we had to rely on borrowing from the Federal Reserve at a lower rate just to get us through April and May, which typically would be our best months,” Mendoza said.

Author(s): Kevin Bessler

Publication Date: 4 June 2021

Publication Site: The Center Square

Illinois fires first salvo in lobbying effort to revise ARP guidance

Mary Pat Campbell

Link: https://fixedincome.fidelity.com/ftgw/fi/FINewsArticle?id=202105131555SM______BNDBUYER_00000179-66e7-df04-a57d-f6f7664e0001_110.1

Excerpt:

Illinois? borrowing through the Federal Reserve?s Municipal Liquidity Facility provided a lifeline for critical services during the COVID-19 pandemic, so the state should be allowed to use its incoming federal coronavirus relief money to pay it off, Comptroller Susana Mendoza tells the federal government.

The state?s $3.8 billion of short-term borrowing, including $3.2 billion through the Federal Reserve?s Municipal Liquidity Facility ?was essential for the continued performance of government services during the most fiscally challenging times for the state?s cash flow during the pandemic, all directly related to the COVID-19 crisis,? Mendoza wrote in a letter to Treasury Secretary Janet Yellen.

?We want to promptly repay federal taxpayers for the crucial help they provided us during the pandemic,? wrote Mendoza, the elected constitutional officer who manages state debt, pension, and bill payments. The state?s updated American Relief Plan share is $8.1 billion.

Mendoza fired off the letter Wednesday, two days after the release of a 151-page guidance on how states, local governments, and tribes can spend their shares of the $350 billion Coronavirus State Fiscal Recovery Fund and the Coronavirus Local Fiscal Recovery Fund that?s built into the American Rescue Plan.

The guidance imposes a sweeping ban on using funds to cover principal and interest repayment, even when the borrowing was directly related to the COVID-19 crisis.

Author(s): Yvette Shields

Publication Date: 13 May 2021

Publication Site: Fidelity Fixed Income News