CHICAGO, Ill. — On Tuesday, Governor Pritzker announced $49 million in tobacco bonds have been retired through a contract that voided the bonds.

The bonds were what remained of a $1.5 billion debt associated with the Great Recession dating back to 2010.

At the time, the state was struggling with a multi-billion bill backlog.

The state traded annual payments it was due from a multi-state legal settlement agreement with cigarette manufacturers for upfront cash from revenue bonds sold by the Railsplitter Tobacco Settlement Authority, a special purpose entity created by the state. 

The borrowed cash was then used to address unpaid bills in 2010.

This recent retirement of debt will benefit taxpayers through debt service savings and interest earnings in a total of $50 million.

“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,” said Governor JB Pritzker. “During my administration, we’ve eliminated the state’s multi-billion-dollar bill backlog, built up the state’s Rainy Day fund balance to nearly $2 billion, made $700 million in public pension payments above required amounts, received eight credit upgrades and worked to grow the economy to more than $1 trillion.”

The void action will set aside funds in a savings account managed by a third party until June 2026.

At that time, the remaining bonds are eligible for redemption, but the debt will be considered immediately retired. 

Lawmakers endorse this action as part of the Fiscal Year 2024 spending plan approved in May.

Bond rating agencies have recognized Illinois’ fiscal progress: