* 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.