SPRINGFIELD, Ill. – The Governor’s Office of Management and Budget presented its latest update on federal COVID-19 funding Tuesday. Members of the Restore Illinois Collaborative Commission asked how the office distributed funds across state agencies and local governments.
GOMB Director Alexis Sturm explained Illinois received $4.9 billion from the Coronavirus Relief Fund (CRF). However, local governments with over 500,000 residents applied for CRF payments directly from the federal government. Cook and the collar counties received separate allocations. The remaining $3.5 billion went directly to the state to cover COVID-19 expenses from March 1 – December 30.
While the state doesn’t have to rush to use the funding by December 30, Sturm noted all costs must be incurred by that point.
“If it’s a good that the state is ordering, it has to have a delivery date on or before December 30. If it is a service that we’ve procured, the service must have been provided on or before December 30,” Sturm said. “At the same time, Treasury expects there’s going to be several months of closeout on expenditures.”
Borrowing for the budget
Gov. JB Pritzker announced last month that Illinois would borrow $2 billion from the federal reserve to fill a hole in the state’s budget. Sturm says that money should come next week.
The state can’t pay that back with funds from the CRF, as those dollars cannot cover lost revenue during the pandemic. Sturm explained her office will break up the repayment over the next three years.
Meanwhile, Illinois previously borrowed $1.2 billion to cover for the delayed income tax deadline this summer. Sturm says the state is still paying off that debt, but payments should finish by the end of the fiscal year. A Republican member of the commission stressed concern.
“Now, we’re going to be trying to pay back another billion dollars plus the $2 billion that we borrowed with money that we don’t have,” said Rep. Dan Caulkins (R-Decatur).
At the same time, the administration has reimbursed the general revenue fund with $170 million from the CRF between Fiscal Years 2020 and 2021. Sturm said the office is still looking to find any expenditures they could cover with the remaining funds.
Addressing IDES issues
Members also asked about possible solutions for the constant issues with the Illinois Department of Employment Security (IDES). Many sole proprietors and gig workers recently faced a new problem when they received too much money from the federal pandemic unemployment assistance program (PUA). IDES sent many individuals letters demanding that money back.
Rep. Stephanie Kifowit (D-Aurora) asked how those overpayments impacted the state’s budget and how they could help people in this situation.
“They don’t have this money just sitting around in the bank,” Kifowit emphasized. “They used it for childcare expenses or food or rent or all these things during this pandemic.”
Sturm planned on reaching out to IDES officials to get an exact amount for the overpayments. The department recently described overpayments as an unfortunate consequence of the federal government’s system haphazardly put together without much oversight. IDES Spokesperson Rebecca Cisco said the federal guidance allowed PUA claimants to establish their own weekly benefit amount. However, claimants were able to do that step before verification by IDES.
“The same federal guidance does not allow states to waive the recoupment of PUA overpayments, which has resulted in claimants, under federal requirements, being required to pay back funds otherwise needed for their families, rent, mortgages, and groceries,” stated Spokesperson Rebecca Cisco.
Gov. Pritzker also addressed the situation during his COVID-19 briefing Wednesday.
“Illinois is not the only state that has faced challenges with this. This is an enormous problem across the country,” Pritzker said. “The program itself was created quickly, without a lot of thought by the federal government – by the Congress. And I do think that only Congress can really act to the situation that the system itself created.”
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