(The Center Square) – A new analysis shows the federal tax dollars sent to Illinois and other states since the start of the COVID-19 pandemic. The funds were used to support public health, education and to temporarily aid Illinois’ financial condition.
According to Pew Charitable Trusts, of the $5.2 trillion that the U.S. government has committed in taxpayer funds to respond to the pandemic since early 2020, about one-sixth went to state governments to use at their discretion. Illinois’ share is estimated to be around $14 billion.
“It is very clear when we looked at our trend charts just how much bigger total aid to states was in the aftermath of the pandemic compared to the aftermath of the Great Recession,” said Rebecca Thiess, manager of the Pew Fiscal Federalism Initiative.
Legislation in response to the pandemic provided aid to states in several ways, including funding for new programs as well as existing ones. Flexible sums of money in the Coronavirus Relief Fund and the State and Local Fiscal Recovery Fund, totaling $307 billion for states, were the largest category of funding going to states.
“Looking specifically at Illinois, which has put a pretty high percentage of this funding into revenue replacement, which is a very flexible use of this funding where they can basically say ‘this is what our state’s budget has lost,’” said Thiess.
Before the pandemic, Illinois’ financial health was considered the worst in the nation, but those federal dollars bought some time. The federal funds allowed Illinois to pay bills and upgrade the state’s credit rating. Still, the state has the worst grade of any. Critics say without structural reform, the state’s finances will be in even worse shape when the federal money runs out.
Thiess notes that increased federal aid to states during a time of crisis is common, but the response to COVID-19 has seen an infusion of dollars that will have reverberating effects for years to come, especially as states invest additional federal dollars from the recently passed Infrastructure Investment and Jobs Act.