Ted Dabrowski is the president of Wirepoints. | Courtesy Photo
Ted Dabrowski is the president of Wirepoints. | Courtesy Photo
Illinois is receiving a $25 million federal bailout from Washington, which has rubbed some conservatives the wrong way.
The American Rescue Plan allocated $7.5 billion of funding to state governments. The education sector, individuals, and businesses also benefit from the funding. Many Republicans disagree with the funding due to it not having any reform to prevent needing bailouts moving forward.
"A $25B bailout from DC means Illinois lawmakers can kick the can once again," president of Wirepoints Ted Dabrowski said on Twitter. "Instead of reforms, pols will spend the money on new programs, making Illinois’ debt hole even bigger."
The credit rating agency Moody's mentioned that the state's rating has transitioned from negative to stable after the ARP funding, saying:
"Affirmation of the state’s rating and the revision of its outlook to stable reflect the state’s financial performance through the pandemic, in combination with increased levels of federal support that will moderate near-term fiscal and economic pressure. State and local government funds expected under the latest federal aid package may help the state repay deficit financing loans, support its financially pressured local governments and spur employment, income and tax revenue growth."
Although the funding has helped in the short term, it puts the state into a deeper predicament, as pension contributions won't even be enough to get out of the liabilities.
Money from the American Rescue Plan shortens the revenue lost to the state because of COVID-19 and lockdowns. The Illinois unfunded pension debt now sits over $317 billion.
“While credit risks raised by the pandemic during the past year are receding, the longer-term challenges associated with the state’s very large unfunded post-employment liabilities remain," Moody's said.
To read the full Moody outlook, click here.
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