American Rescue Plan FAQ: Illinois

As of now, without accounting for any unpaid bills which remain at the close of FY 2021, General Fund revenues and net expenditures in FY 2022 are expected to balance.  And while initial projections were that some $8.3 billion in unpaid bills would carryforward from FY 2021 into FY 2022, those projections have been revised downward significantly, and currently stand at $6.3 billion.

This positive turn of events is primarily due to unexpected federal financial assistance the state is receiving to help cover expenses related to the pandemic. Initially, Illinois procured approximately $15 billion in funding under various federal initiatives that were enacted in 2020, headlined by the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), as well as the Coronavirus Response and Relief Supplemental Appropriations Act (“CRRSA”).

On March 11, 2021, the Biden Administration secured passage of the American Rescue Plan Act (“ARPA”), which, like the CARES Act, also provides fiscal relief designed to counter economic issues created by the pandemic. ARPA is considerable in size and provides a total of $1.9 trillion in federal aid for state and local governments to use to support the provision of various core public services such as healthcare, human services, and education, as well as to infrastructure.

No question all this federal support is welcome—but bear in mind it does constitute one-time revenue that will not be continued in the future. Which means that as long as the long-term, significant structural flaws in Illinois’ fiscal system are not redressed, the state is facing a potentially substantial fiscal cliff for its General Fund in FY 2025.

That said, given the significant federal aid flowing through ARPA, CTBA has compiled the following answers to some of the most frequently asked questions about that legislation and how it will impact Illinois.