* Press release…

As the spring legislative session ends, negotiators representing organized labor today announced agreement on delaying temporary employer tax increases and worker benefit reductions, but an impasse in discussions to address a historic deficit in the state fund that provides unemployment insurance benefits to workers.

Representatives of five key labor organizations announced that negotiations among labor, business, legislators and Gov. Pritzker’s administration over solutions to eliminate what remains of the state’s Unemployment Insurance Trust Fund deficit of $4.5 billion had reached an impasse.

Negotiators announced support for stop-gap action delaying temporary triggers in state law that will increase costs for businesses and decrease benefits for workers. However, if no action had been taken by the end of the year, the so-called “speed bumps” in the unemployment insurance law would drive up costs in the system by $409 million in tax increases on employers, and $318 million in benefits for jobless workers.

“We just saw the Legislature and Governor provide $2.7 billion in federal pandemic relief funding to the unemployment insurance program,” said Pat Devaney, Secretary-Treasurer with the Illinois AFL-CIO. “But without an agreement on structural reform to protect workers, employers and taxpayers, Illinois’ unemployment fund will be bankrupt again in a couple of years.

All parties need to get back to the bargaining table and find a real solution that protects workers and taxpayers, gives businesses stability and certainty and finally gets honest about the revenue needed to support our unemployment system.”

This is the third time Illinois has faced a multi-billion-dollar hole in its unemployment trust fund in the past 18 years, but the $4.5 billion debt is the state’s largest ever – initiated by widespread unemployment from the pandemic economic shutdown, but cemented by a revenue structure that has seen little change since 1980.

Labor negotiators have urged all involved to focus on more than just providing relief to businesses through federal ARPA funding. Because the system is chronically underfunded, economic crisis events create large deficits – and too often, workers and taxpayers are expected to bear the burden of bailing out the system. The labor groups will urge negotiations focus on ending the historic underfunding of the UI system that results in huge debt challenges during economic slowdowns.

The state had already delayed the automatic “speed bumps” (benefit cuts and tax increase) that would take effect without a deal until July 3rd. An amendment to SB157, which cleared both chambers early this morning, delays that action until January 1, safely after the November election.