News - Bill's Blog

Susana Mendoza: Taxpayer advocate?

December 15, 2021

Eight states have called for the federal government to extend a waiver on interest payments owed on their borrowings from Uncle Sam for unemployment insurance programs. In an article in today’s hard-copy Chicago Tribune written by Dan Petrella, a statement from Illinois Comptroller Susana Mendoza included:

“Taxpayers should not be on the hook for interest just because the pandemic is lasting longer than projected.”

Mendoza may seem like she cares about taxpayers. Putting aside whether she really cares about Illinois taxpayers, specifically, consider whether what she is arguing for helps U.S. taxpayers in general. 

Do you remember the line “What’s good for General Motors is good for America?” Here, a self-interested politician appears to be claiming what is good for Illinois is good for American taxpayers.

But who is on the hook for foregone interest to date that the state government in Illinois would have owed to the federal government, and for interest foregone in the future if this waiver is extended? 

Taxpayers, including Illinois taxpayers, who pay tax to the federal government. 

Granted, Illinois taxpayers have a vested interest in federal benefits for the state government of Illinois. But what do American taxpayers in general think?

The answer to that question may help explain why the seven states reportedly joining Illinois in sending a letter to U.S. Treasury Secretary Janet Yellen were Connecticut, Massachusetts, Colorado, New Jersey, Minnesota, New York, and Pennsylvania. Truth in Accounting calculates the average “Taxpayer Burden” (a measure of government financial position) for these eight states as six times worse than the average for the other 42 states.

The Chicago Tribune's story today appeared under a headline “States ask feds to freeze interest on loans used to pay jobless benefits.”

The headline didn’t say “Eight States.” It started with “States.” But Petrella’s article concluded with healthy and provocative paragraphs effectively questioning the veracity of Illinois officials’ claims, and whether those eight states are relying on taxpayers in other states to bear the costs of what they are asking for.

It's also worth recalling that Illinois Comptroller Mendoza falsely claimed the State of Illinois Auditor General delivered an unmodified audit opinion on Illinois' latest financial statements -- and that the auditor's opinion was modified in important part due to accounting issues afflicting the State of Illinois' unemployment insurance program.


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