Illinois Borrows $3.2 Billion From the Federal Reserve

With its struggling finances, what better way for Illinois to get out of the hole than $3.2 billion in bond guarantees from the Federal Reserve?

The state borrowed $1.2 billion in summer 2020 and then another $2 billion in the fall from the central bank's emergency lending program for state and local government issuers, Municipal Liquidity Facility.

With its almost-junk bond status, Illinois was "Unable to secure adequate credit accommodations from other banking institutions" and so qualified for the financing from the lender of last resort.

Illinois is rated one notch above junk because of its enormous unfunded pension liability and chronic budget deficit.

With Illinois' estimated $317 billion pension liability, a family of four now owes $98,000 in unfunded pension liabilities, which is more than they earn in household income, which averages $63,585.

Illinois' financial problems are far from short term.

This desperate move by the state is a revelation: Illinois needs massive financial reform.

https://www.realclearpolicy.com/articles/2021/04/30/illinois_borrows_32_billion_from_the_federal_reserve_774235.html