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Potential Impact of COVID-19

The COVID-19 pandemic, along with various governmental measures taken to protect public
health in light of the pandemic, has had an adverse impact on global financial markets and economies,
including financial markets and economic conditions in the United States. The impact of the COVID-
19 pandemic on the U.S. economy is expected to be broad based and to negatively impact national,
state and local economies.

In response to such expectations, former President Trump has declared a “national emergency”
and the State of Illinois (the “State”) as a disaster area, which, among other effects, allows the
executive branch to disburse disaster relief funds to address the COVID-19 pandemic and related
economic dislocation. In addition, on March 27, 2020, former President Trump signed the Coronavirus
Aid, Relief, and Economic Security Act (the “CARES Act”), which is directed at mitigating the
economic downturn and health care crisis caused by COVID-19. The estimated $2 trillion CARES
Act, among other items, creates a $150 billion Coronavirus Relief Fund for state, local and tribal
governments to use for expenditures incurred due to the public health emergency with respect to
COVID-19.

The Governor has signed various executive orders (each with 30-day periods of effectiveness
which have been extended several times) to prevent the further spread of COVID-19 that, as originally
issued, (i) required all Illinoisans (with certain exceptions) to stay in their homes; (ii) closed all bars
and restaurants to dine-in customers; (iii) ceased operations for all non-essential businesses in the State
and (iv) prohibited all public and private gatherings of 10 or more people. The Governor has
implemented a five-phase approach to reopening the State’s businesses, with each successive phase
easing certain of the restrictions previously imposed by such executive orders. The State is currently
in the fourth phase of this reopening plan, and the current executive orders extend through
March 6, 2021.

The Governor and the Illinois Department of Public Health imposed additional COVID-19
resurgence mitigations in every region across the State, effective as of November 20, 2020, in an
attempt to slow the spread of the virus. Tier 3 mitigations build on the State’s Resurgence Mitigation
Plan released in July to suppress the spread of the virus and prevent hospitals from becoming overrun.
This latest round of mitigations aims to limit gatherings and encourages residents to stay home as
much as possible and follow proper safety measures when out in public. While this latest round of
mitigations does not include a stay at home order, if the mitigations are not adhered to and cases
continue to rise in the weeks ahead, the Governor stated that another order may be required.

Despite moneys the State is expected to receive from the federal government, including from
the CARES Act, the spread of COVID-19 and the actions taken in response thereto have had, and are
expected to continue to have, a significant negative impact on the State’s economy, which could affect
the revenues received by the District from the State, including State Aid.

The State is not yet able to assess the severity of the economic impact of the COVID-19
pandemic. The State’s initial estimates projected revenues for fiscal year 2020 to be approximately
$2.7 billion less than previously projected, and fiscal year 2021 revenues to be approximately $4.6
billion less than previously projected. In addition, the State borrowed $1.2 billion from the Federal
Reserve’s Municipal Liquidity Facility on June 5, 2020, which provided additional revenues in fiscal
year 2020, but must be repaid out of the State’s general revenues during fiscal year 2021. The State is

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