Illinois leaders agree on solution for unemployment insurance fund debt
SPRINGFIELD (WGEM) - Illinois state lawmakers have reached an agreement with business and labor leaders to pay off the remaining debt in the state’s unemployment insurance trust fund. The agreed bill will help pay off $1.36 billion and replenish the UI fund for the future.
Democrats and Republicans say they’re glad to see the state is paying off the federal debt in a responsible manner after intense negotiations. The agreement will contribute roughly $1.8 billion to the unemployment insurance trust fund, with $1.36 billion heading back to the federal government for money borrowed during the worst of the COVID-19 pandemic.
Gov. JB Pritzker said the remaining $450 million will serve as an interest-free loan for the trust fund. The interest-free loan will be repaid from the fund over the next 10 years with payments directly to the state’s rainy day fund.
“It will save Illinois businesses hundreds of millions of dollars over the next decade and it will save taxpayers $20 million in interest costs that would otherwise have been due next September,” Pritzker said.
The governor noted that negotiators have restored the state’s unemployment system to good working order after the most serious economic downturn since the Great Depression. Pritzker said Republicans and Democrats were able to come together to deliver for working families and businesses. The agreement also ensures there are no reductions in the number of weeks of unemployment benefits and the amount of money a person can claim.
Sen. Sue Rezin (R-Morris) said the agreed bill process was long and became contentious at times. Although, she told reporters in Springfield that Illinois will avoid the worst-case scenario with this plan.
“Just like any negotiation, there’s some give and take and we don’t all get 100% of what we want,” Rezin said. “But today, we’re able to show that we can work together in the best interest of our state and its people.”
Rep. Marcus Evans (D-Chicago) said Pritzker, House Speaker Emanuel “Chris” Welch (D-Hillside), and Senate President Don Harmon (D-Oak Forest) have set the tone for collaborative leadership. Evans said that energy is effective for lawmakers and leaders from business and labor to work on goals to help everyone in Illinois.
“The steps that we took today and that we’ve been taking with fiscal responsibility under the leadership of those three men will create the opportunities to support everything you care about,” Evans said. “If you care about childcare, the money that we save and the fiscal responsibility of today will create the childcare opportunities of tomorrow. If you care about agriculture, the steps we took today will create the opportunities to save money.”
Sen. Linda Holmes (D-Aurora) explained this proposal will make critical changes to the Unemployment Insurance Act to benefit the state’s economy and families for years to come. Holmes said the agreed bill will increase the taxable wage base, raise the targeted unemployment insurance trust fund solvency balance, and establish terms for an interest-free loan to the UI trust fund, among other changes.
“This action is just the latest building block in our efforts to improve the financial status of our state,” Holmes said. “By paying what we owe and continuing to pass responsible budgets, our state’s fiscal status only continues to improve.”
Illinois AFL-CIO Secretary-Treasurer Pat Devaney said the agreement is a win for businesses and working people. Devaney said he was happy that organized labor, businesses, and elected leaders set aside their differences to advocate for working people.
“Illinoisans can rest easy knowing that the future of our state’s unemployment system will reflect the needs of working people and those facing economic hardship,” Devaney said. “We are grateful to Governor Pritzker, the Illinois General Assembly, business, and labor leaders who came together to agree on commonsense policy that will benefit working families across Illinois.”
The Illinois Retail Merchants Association also celebrated the bipartisan victory with Pritzker and legislative leaders.
“The pandemic created unprecedented challenges for unemployment insurance systems across the nation and without action, Illinois employers would have faced crushing tax increases in the midst of other challenges,” said IRMA President and CEO Rob Karr. “This agreement will ease that pressure and provide greater stability for our system, while also ensuring employers pay over $900 million less in taxes over the next five years than they otherwise would have.”
The agreed bill is expected to pass out of both chambers before the veto session ends on Thursday.
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