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Pritzker says strong employment growth allows state to pay down another $450 million in UI Trust Fund debt

Tuesday, Sep 27, 2022 - Posted by Rich Miller

* From Gov. JB Pritzker’s statement to the media today about the state’s Unemployment Insurance Trust Fund

But today, Illinoisans are back to work, the driving force behind our growing economy whose GDP is larger than it was pre pandemic. For 20 consecutive weeks, Illinois has had historically low unemployment claims, outperforming expectations. Our unemployment system is back on track and the balance of the unemployment trust fund continues to experience strong and steady growth.

Thanks to Illinois’ economic recovery, the Illinois Department of Employment Security has advised me that the UI trust fund balance is sufficient enough to pay down another $450 million of its pandemic-related debt. This payment will reduce the remaining balance of our loan by 25% and reduce interest costs by an estimated $10 million over the course of the next year.

This announcement comes just months after the General Assembly and I directed $2.7 billion of federal ARPA dollars toward the loan, cutting the original $4.5 billion loan down to $1.8 billion.

Today’s action is another major step toward eliminating pandemic-related UI debt, which we intend to complete by the end of this calendar year. And we will. I will work closely with the General Assembly to continue supporting the agreed bill process between labor and business to conclude negotiations.

Please pardon any transcription errors.

…Adding… Press release excerpt…

“Paying down this debt continues to strengthen our fiscal security, adding to the benefits the Unemployment Insurance Trust Fund is seeing from historic low unemployment,” state Senator Linda Holmes (D-Aurora) said. “The fund now has a $1.2 billion surplus due to fewer claims, making it very practical to pay back the borrowed funds. It’s another great step in our state’s record of continuous financial improvements of the past few years”

Illinois has remained below the previously recorded low of just more than 70,000 continued claims for twenty consecutive weeks, unprecedented since the beginning of the series in January 1987. Since the start of this year, Illinois has gained nearly 120,000 jobs throughout the state, with the most significant increases seen in the hotels and food services, manufacturing, healthcare and social assistance, construction, and transportation and warehousing industries.

Federal funds borrowed under Title XII were necessary to supplement the state’s unemployment insurance trust fund and provide economic relief to unemployed workers throughout the duration of the Covid-19 pandemic. A plan to pay off the remaining balance on the loan will need to be developed through the agreed bill process.

…Adding… The talking points didn’t completely bite the dust, but yeah…


…Adding… Some background…


…Adding… Sens. Rezin and Stoller…

On September 27, Governor JB Pritzker held a press conference to tout the Illinois Department of Employment Security’s (IDES) use of $450 million from Illinois businesses’ tax dollars to pay down the remaining $1.8 billion borrowed under Title XII of the Social Security Act. Senate Deputy Minority Leader Sue Rezin (R-Morris) and State Senator Win Stoller (R-Germantown Hills), who were the Senate Republicans’ chief Unemployment Insurance (UI) Trust Fund negotiators, released the following statements in reaction to the announcement:

“While it is always good for the state of Illinois to make down payments on its outstanding debt, today’s announcement comes on the verge of the largest tax increase on businesses in Illinois history and does little to nothing to prevent it,” said Sen. Rezin. “No matter how the Governor and his allies try to spin this, Illinois is one of only five states to still owe money on its UI Trust Fund loan. This $450 million already paid by Illinois businesses will have no impact on future taxes that they will be forced to pay if we don’t completely repay our loan. We should have and could have filled this hole with the unexpected money we received from the federal government. Instead, the Majority Party waited for that money to be depleted on other proposals and programs, including personal pork projects.”

The state of Illinois received $8.1 billion from the federal American Rescue Plan Act (ARPA) of 2021, which was designed to be used for COVID-19 relief and help with economic recovery. The federal government approved ARPA funds to be used on items like the UI Trust Fund, which prompted 31 states used their APRA dollars to eliminate their deficits and replenish their Trust Fund balance.

“It is disingenuous and a disservice for the Governor and Democratic lawmakers to be patting themselves on the back for today’s payment when they know that the burden of paying the remaining debt of $1.3 billion will be placed on struggling Illinois businesses,” said Sen. Stoller. “Illinois businesses did not create the lockdowns or give out billions of dollars of unemployment benefits to fraudsters that helped create our state’s nearly $5 billion UI Trust Fund debt. Now, Democratic lawmakers expect businesses to fix a problem of their own creation, which they could’ve easily fixed with the billions of dollars that the federal government provided them.”

If remaining UI Trust Fund debt isn’t repaid by Nov. 10, Illinois employers will lose Federal Unemployment Tax Act (FUTA) credit in 2023. The FUTA tax credit loss will be 0.3 percent of the first $7k of wages per employee or a maximum of $21 per employee. Consequently, for each employee earning $12,960 in 2023 a minimum rate taxed employer, the UI tax per employee will increase from $93.96 to $173.28 and for each employee earning $12, 960 in 2023 a maximum rate taxed employer, the UI per employee will increase from $988.20 to $1,326.72. The General Assembly is not expected to return to Springfield until the fall Veto Session on Nov. 15.

       

35 Comments
  1. - Friendly Bob Adams - Tuesday, Sep 27, 22 @ 9:16 am:

    Good news for Illinois.


  2. - walker - Tuesday, Sep 27, 22 @ 9:16 am:

    Excellent. Fixing it by year end is the responsible thing to do, especially for small businesses.


  3. - Back to the Future - Tuesday, Sep 27, 22 @ 9:20 am:

    Agree this is good news for Illinois.


  4. - Arsenal - Tuesday, Sep 27, 22 @ 9:22 am:

    The fiscal scolds are shaking.


  5. - Oswego Willy - Tuesday, Sep 27, 22 @ 9:24 am:

    It is difficult to say that these past, nearly, four years hasn’t seen fiscal responsibility by the governor and the comptroller, making Illinois better.

    These all are important steps to keeping Illinois on a strong fiscal path.

    It’s great to see.


  6. - Highland IL - Tuesday, Sep 27, 22 @ 9:32 am:

    Wirepoints to debunk in 3-2-1…/s


  7. - Donnie Elgin - Tuesday, Sep 27, 22 @ 9:46 am:

    Before JB takes any victory laps on IDES - he really should answer to his mismanagement - IDES so messed up fraudulent UI claims and the accounting of FED relief money - that no audit can even be performed - CBS estimates IL lost $1.2 billion to fraud.

    https://www.cbsnews.com/chicago/news/25-million-unemployment-boondoggle/


  8. - Anyone Remember - Tuesday, Sep 27, 22 @ 9:47 am:

    More of this, please.


  9. - Huh? - Tuesday, Sep 27, 22 @ 9:52 am:

    Getting the UI trust fund replenished just in time for the looming recession.


  10. - Annonin' - Tuesday, Sep 27, 22 @ 9:56 am:

    JB be caught 2 questions at the presser — both on topic — then silence and he adios’d the place. Whatever happened to the Chicago TV gals and guys yelling questions? Must be bored already


  11. - Cool Papa Bell - Tuesday, Sep 27, 22 @ 9:59 am:

    don’t look now, more actual governing going on.


  12. - Tinman - Tuesday, Sep 27, 22 @ 10:00 am:

    It’s good they are paying it down. But we got hit with so much fraud . There was a lot of mismanagement. Lost a lot of money to the fraud .


  13. - Cool Papa Bell - Tuesday, Sep 27, 22 @ 10:07 am:

    @Tinman

    =That’s according to a report from the auditor of state. The report notes that between April 1, 2020, and June 30, 2021, the Ohio Department of Job and Family Services paid out $477 million in fraudulent employment benefits. It also overpaid more than $3 billion in non-fraudulent cases.=

    A problem for sure. But it was everyone’s problem.


  14. - Dan Johnson - Tuesday, Sep 27, 22 @ 10:10 am:

    Is there any path where the debt is fully paid back from continued growth? If this cut down 25% of the debt, would three more years of this do the trick?


  15. - Blake - Tuesday, Sep 27, 22 @ 10:10 am:

    Does it look like the day when Illinois no longer has the lowest bond rating of any state is in sight?


  16. - Close Observer - Tuesday, Sep 27, 22 @ 10:12 am:

    @Donnie Elgin

    Illinois is not unique here. Every state in the nation was subjected to serious fraud. It should also be noted that these agencies were underfunded pre-covid and were asked to prop up massive brand new programs in a matter of weeks. Programs that were being created and implemented in real time.


  17. - Donnie Elgin - Tuesday, Sep 27, 22 @ 10:14 am:

    But it was everyone’s problem.

    That’s not entirely accurate, of course there would be some fraud in all 50 states. But there are and where national clearinghouses that shared technology and information that prevented UI fraud. Unfortunately Illinois is not a state that is part of the clearinghouse. JB should’ve been more proactive and explored every option to prevent this fraud. His office and virtually every employer knew about it for many months before it became a national headline. He did nothing


  18. - Arsenal - Tuesday, Sep 27, 22 @ 10:14 am:

    ==Before JB takes any victory laps on IDES==

    As if you’d ever say he could, on any topic.


  19. - Grandson of Man - Tuesday, Sep 27, 22 @ 10:18 am:

    Illinois doomsayer talking points have never been emptier, especially now that their beloved states have eliminated women’s bodily autonomy.


  20. - Oswego Willy - Tuesday, Sep 27, 22 @ 10:21 am:

    ===course there would be some fraud in all 50 states===

    How much fraud makes it a problem, for you.

    You seem cool with some fraud, but at what number is it a problem.

    Seems like you have goal posts that make an honest assessment a tough ask?


  21. - Demoralized - Tuesday, Sep 27, 22 @ 10:24 am:

    ==Before JB takes any victory laps==

    There really is never such thing as good news in some of you people’s eyes. You’ve always got a “yeah, but” argument. It really is pathetic sometimes.


  22. - Socially DIstant watcher - Tuesday, Sep 27, 22 @ 10:36 am:

    Donnie and Tinman would rather JB spent this to upgrade the UI system? Or would they then complain that the trust fund is depleted?


  23. - DTownResident - Tuesday, Sep 27, 22 @ 10:44 am:

    Illinois needs to and hopefully has implemented more checks and balances when filing for unemployment to reduce identity and benefits theft. I saw something recently where this is a fifty state problem with an estimate of 45 billion total across all the states. When setting up paying taxes in Illinois this year I had to also use Microsoft authenticator to validate access. While that alone will not prevent all fraud, it can help reduce it. Hopefully filing for unemployment has more security than it used to.


  24. - More Context - Tuesday, Sep 27, 22 @ 11:12 am:

    To add to Jerry’s tweet, that FUTA tax credit loss is not necessarily a punitive tax increase because the additional revenue collected by the feds goes to pay down the trust fund’s debt (see link below). The UI system is almost wholly funded by taxes on employers - a way to disincentivize layoffs without cause. So here, both employers and the State are paying down the debt accrued.

    https://crsreports.congress.gov/product/pdf/RS/RS22954

    The big issue moving forward isn’t really paying off this debt, but how to more sustainably fund the UI system so that we don’t end up this situation again the next time the economy (inevitably) tanks.


  25. - MisterJayEm - Tuesday, Sep 27, 22 @ 11:18 am:

    A word of advice for the JB haters:

    No one knows who you are, so your credibility on this board is based solely on what you post in the comments. When you post kitten-weak complaints about JB, as you have in these comments, that undermines the merit of valid points that you might have one day in the future.

    Any rhetorical value in claiming “this self-evidently good thing is actually a very bad thing because in an imaginary world…” is more than off-set by its undermining of your possible future legitimate points.

    Unless you can’t imagine that you will one day have valid arguments to make, it’s okay to see a post about some good news for Pritzker posted and just sit it out.

    tl;dr- Recognize Lucky Pierre’s self-inflicted status as the cautionary example that it is, not as a guide for your own behavior.

    – MrJM


  26. - JS Mill - Tuesday, Sep 27, 22 @ 11:25 am:

    You said this…

    =That’s not entirely accurate,=

    Then you said this…

    =of course there would be some fraud in all 50 states.=

    So yes, it is entirely true. That is how words work.

    The scolds want us to pay down debt, something most previous administrations did not due. In fact, the last administration increased debt massively and unnecessarily.

    Now it is getting significantly addressed.

    Take the W even if you don’t like the guy that is getting it for you.


  27. - Lakefront - Tuesday, Sep 27, 22 @ 11:30 am:

    == You seem cool with some fraud, but at what number is it a problem ==

    Condescending snark aside, there are some legitimate concerns about Illinois’ amount of “fraud.” Between July 2018 - July 2021 Illinois had a DOL UI improper payment rate around 17 percent. No, Illinois isn’t the worst state for this but we are about 16th worst.
    Comparisons are hard to make - but these numbers provide perspective on our deficiencies.


  28. - Oswego Willy - Tuesday, Sep 27, 22 @ 11:34 am:

    ===Condescending snark aside, there are some legitimate concerns about Illinois’ amount of “fraud.”===

    So what number does that concern begin?

    It was made it clear, all 50 states have fraud, “but”…

    … well, you want the “but”, so what exactly is that number, what constitutes the amount of “fraud” you’ll “allow” Pritzker?

    I mean, seriously, I’d this s comedy bit?

    Shot…

    ===about 16th worst===

    … chaser

    ===Comparisons are hard to make===

    Then why are you here comparing *anything* at all, sincerely.

    You’d also think paying things down that’d be good? How is it not?


  29. - Lakefront - Tuesday, Sep 27, 22 @ 11:46 am:

    == Then why are you here comparing *anything* at all, sincerely ==
    Because the US DOL makes that exact comparison with that exact qualifier…yeesh not every critique of Illinois IDES is a right-wing talking point.

    ==You’d also think paying things down that’d be good? How is it not? ==
    Yes of course it is. Did I say otherwise? The issue many folks have is that this payment isn’t preventing the tax increase on employers. So yes pay down debt =good yet victory lap need not commence when you haven’t alleviated the years long concerns of
    Biz.


  30. - Oswego Willy - Tuesday, Sep 27, 22 @ 11:50 am:

    ===the years long concerns of Biz===

    They are?

    ===Because the US DOL makes that exact comparison with that exact qualifier…===

    Then why did you dismiss it?

    ===Comparisons are hard to make===

    I didn’t go after your “talking point” as “right wing”, I did point out you had concerns about comparisons while pointing out comparisons. Nothing more.


  31. - Anonymous - Tuesday, Sep 27, 22 @ 2:13 pm:

    ==yet victory lap need not commence when you haven’t alleviated the years long concerns of
    Biz.==

    I mean, that first assumes that those concerns are valid. “workers want too much money” is also a long-standing concern for businesses, but I don’t want the state to take any action on that.

    But second, there’s always going to be some long-standing problem that isn’t solved yet, so your stance is, at best “No victory laps until paradise”.

    But it’s probably closer to “No victory laps for JB Pritzker ever”.


  32. - Arsenal - Tuesday, Sep 27, 22 @ 2:24 pm:

    anon @ 2:13 was me.


  33. - ChicagoBars - Tuesday, Sep 27, 22 @ 2:34 pm:

    To call the State unemployment insurance premium formula complicated doesn’t even begin to do it justice. But notice of a big UI insurance premium jump this fall in a letter from State of Illinois will infuriate a lot of small businesses who got shut down in 2020 by State mandates and had to lay off most/all staff for several months.


  34. - Proud Sucker - Tuesday, Sep 27, 22 @ 3:11 pm:

    Is the premium jump ‘big’ or is it $12 per employee. I am honestly confused by Rezin’s and Stoller’s statements.


  35. - Close Observer - Tuesday, Sep 27, 22 @ 3:18 pm:

    @Donnie Elgin

    Correct, it was everyone’s problem, which why I pointed out that Illinois was not unique. So yes, it is accurate. Sure, the state could’ve spent its money on preventative measures that still wouldn’t have prevented all fraud. To suggest that shared tech and info would’ve prevented all fraud is laughable. Is there any state that didn’t experience fraud? No. Additionally, if the state would’ve chose to spend money on this, you’d be complaining about the UTF deficit and the 10 million in additional interest payments the administration just prevented. It was a classic pick your poison. Governing isn’t easy and to suggest that an international problem could be solved from your one sentence solution is once again laughable.


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