Congress asks Pritzker to pay off $1.3 billion federal unemployment debt

Members of the U.S. House Ways and Means Committee have written to Governor JB Pritzker demanding repayment of a $1.3 billion loan from the federal unemployment insurance fund by November 10. Failure to do so automatically means raising corporate taxes.

Members of the U.S. House Ways and Means Committee sent a letter to Governor JB Pritzker on October 5 urging Illinois to pay off $1.3 billion in federal unemployment insurance debt by November 10. Otherwise, state enterprises will face another automatic tax hike.

The letter signed by U.S. Representative Darin LaHood, R-Peoria, a member of the U.S. House Ways and Means Committee, and the committee’s Republican leader, U.S. Representative Kevin Brady, R-Texas, warn taxes on employers will drop from $42 to $63 per worker in 2023 unless federal unemployment insurance loans are repaid.

“We urge you and the state legislature to prioritize the repayment of this outstanding federal loan to avoid any additional economic burden on Illinois employers and workers,” the letter reads.

Members of Congress pointed out that the federal unemployment tax law already increased business unemployment benefits in September 2021 and will continue to do so each November as long as the $1.3 billion debt remains.

The letter warned that continued delinquency on these federal loans could force business owners to pay up to $420 per employee each year until the debt is settled. The committee suggested that Pritzker use part of the $8.1 billion Illinois received in-state pandemic recovery funds to pay off the balance.

“Without refunds, Main Street businesses risk facing higher taxes that will undermine job creation and drive up prices, just as families and small businesses grapple with record inflation and a looming recession. “, they wrote.

“This self-imposed pain is preventable,” the letter read. “As members of the House Ways and Means Committee that oversees unemployment benefits, we urge you to address this delinquency quickly and responsibly by tapping into your large budget surplus or applying federal coronavirus relief for ensure that Illinois employers and workers across the state do not bear the burden of state inaction.

Twenty-two states took out federal loans during the pandemic. Most used COVID-19 relief funds to pay off those loans to avoid raising taxes on business owners. Illinois is one of the only four states who have not yet eliminated their federal unemployment insurance debt. Colorado lawmakers pushed to pay down debt to beat the Nov. 10 employer tax deadline.

Avoiding an automatic statewide corporate tax hike is a top priority as Illinois faces the possibility of a recession. Job creators are already expected to pay $1.8 billion in higher commercial property taxes over the next four years, but a proposal leading the Nov. 8 ballot threatens to dramatically increase the potential for a faster rise and higher.

Amendment 1 would enshrine the permanent power of government unions in the Illinois Constitution and prevent lawmakers from diminishing those powers. It dramatically expands bargaining beyond pay and into vague areas such as “economic well-being” and “workplace safety” that promise more bargaining disputes, more strikes and more costs.

Illinois knows the cost of defaulting on its federal unemployment debt. Anyone can guess what Amendment 1 could cost.

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John A. Bogar