Outstanding Illinois debt is now smoke-free after the state defeased the last $449 million of bonds backed by payments from a master settlement agreement with tobacco companies.
Gov. J.B. Pritzker said the move, which was included
"Today's action reflects Illinois' strong fiscal position and my continued commitment to responsibly manage the state's financial resources as we pay off the lingering debts from the Great Recession," the Democratic governor said in a statement Tuesday.
In December 2010, Illinois sold $1.5 billion of bonds through its Railsplitter Tobacco Settlement Authority, which was assigned money the state receives under a 1998 multi-state agreement with cigarette manufacturers to compensate the governments for the cost of caring for sick smokers.
Yields
Payments under the agreement began in 1999 and Illinois received a total of $7.58 billion as of April 20, 2023, according to
The state used proceeds from the bonds to pay down its backlog of bills, which stood at nearly $7.9 billion at the end of 2010 and reached a record $16.7 billion amid a 2015-2017 budget impasse. General fund accounts payable were just $528 million when fiscal 2023 ended June 30.
The Railsplitter Authority
The defeasance will set aside funds in a special escrow account until June 2026, when the remaining bonds are eligible for redemption, according to the governor's statement.
Wisconsin's fiscal 2024-25 biennial budget
