Illinois pays off $450 million in unemployment insurance fund debt
SPRINGFIELD (WGEM) — The Illinois Department of Employment Security is paying off another portion of Unemployment Insurance Trust Fund debt. Governor JB Pritzker announced Tuesday that IDES is investing $450 million in the federal loan the state received to help pay unemployment benefits during the worst of the pandemic.
Pritzker said the payment would reduce the remaining $1.8 billion balance by 25%. The hole in the unemployment insurance trust fund is now $1.3 billion.
The administration explained that this payment was possible due to unemployment claims reaching historic lows over the past five months. IDES director Kristin Richards said her agency now has the ability to make the payment without harming the ability to deliver unemployment benefits to those in need.
The governor said the payment will also reduce interest charges on the Unemployment Insurance Trust Fund’s debt by $10 million over the next year. Pritzker noted that IDES expects to repay the remaining balance by the end of 2022.
“Illinois’ budget decision-making is focused on debt reduction and continues to put the state on a solid fiscal footing for our working families,” Pritzker said.
State lawmakers passed a plan in March this year to use $2.7 billion from the US bailout to reduce the original $4.5 billion loan to $1.8 billion. Richards said ARPA funds have helped supplement the Unemployment Insurance Trust Fund and provide economic relief to the unprecedented number of people filing for unemployment during the pandemic.
“At the same time, IDES is engaged in exciting work with the United States Department of Labor to support benefits integrity, claims management, and equitable access to unemployment insurance services,” said Richards. “Recently, IDES announced a $6.8 million award to fund improved data collection, to understand barriers to user interface access, and implement strategies to overcome those barriers.”
Richards explained that these are all efforts that IDES undertakes to support a strong unemployment insurance system for Illinois. IDES plans to work with lawmakers and business and labor stakeholders to pass an agreed bill addressing the remaining debt this fall.
“Director Richards has made it clear that working class people in the state of Illinois will have support, will have that support from our unemployment insurance system,” said Rep. Marcus Evans (D- Chicago). “And of course, the more we stabilize Illinois’ finances, the more we can help the working class and the poor.”
Evans stressed that this payment is another important step in the recovery from the financial crisis created by the COVID-19 pandemic. Still, Republican lawmakers are upset that Illinois is one of only five states that still owes money on a Federal Unemployment Fund loan. Sen. Sue Rezin (R-Morris) said Tuesday’s announcement comes on the eve of the largest corporate tax hike in state history and does little for the state. prevent it from happening.
“The $450 million already paid by Illinois businesses will have no impact on future taxes they will be required to pay if we don’t fully repay our loan,” Rezin said. “We should and could have filled that hole with the unexpected money we received from the federal government.”
Illinois received $8.1 billion from the US bailout in 2021 and many Republican lawmakers hoped Democratic leaders would agree to use more of that money to pay off the entire 4.5 hole. billions of dollars in the unemployment insurance trust fund. Lawmakers now know that 31 states have used their ARPA allocations to fully repay their federal loans and replenish their trust fund balances.
Sen. Win Stoller (R-Germantown Hills) says it’s dishonest for Democratic leaders to welcome the payout when the burden of paying the remaining $1.3 billion will be placed on struggling Illinois businesses .
“Illinois companies did not create the blockages or pay billions of dollars in unemployment benefits to fraudsters who helped create the nearly $5 billion in debt from the Unemployment Insurance Trust Fund of our state,” Stoller said. “Now Democratic lawmakers expect corporations to solve a problem of their own making, which they could have easily solved with the billions of dollars the federal government has handed them.”
Copyright 2022 WGEM. All rights reserved.