Illinois lawmakers prepared to defer decision on unemployment trust fund debt
(The Center Square) – Illinois lawmakers appear ready to postpone a decision on how to pay off the state’s remaining unemployment trust fund debt.
An amendment is advancing at the statehouse on the final day of session to extend the deadline of the so-called “speed bump” that would automatically trigger higher business taxes and lower benefits for the unemployed if the UI debt isn’t paid off.
Beginning in the spring of 2020, with the onset of the COVID-19 pandemic, Illinois racked up massive amounts of unemployment debt after Gov. J.B. Pritzker ordered what he deemed non-essential businesses to not have in-person services.
During that time, there was also a substantial amount of fraud reports, though the Pritzker administration still has not revealed how much unemployment fraud has cost the state.
By the time the unemployment situation leveled out, the state had borrowed about $4.5 billion from the federal government to meet benefit needs. That debt carries tens of millions of dollars in additional interest.
Last month, legislators sent the governor a measure to use $2.7 billion of some of the remaining federal COVID-19 relief tax funds to partially pay down the debt. Republicans argued there was plenty of federal money to pay the debt down entirely. The governor signed the partial repayment bill.
How to deal with the remaining debt, which carries interest that taxpayers are on the hook for, is being negotiated between business and labor groups.
Friday, the last day of scheduled session, state Sen. Linda Holmes, D-Aurora, advanced out of committee a Senate Amendment to House Bill 4450 that moves the deadline to pay off the debt from July 3, 2022, to Jan. 1, 2023.
“That’s agreed to by both business and labor representatives in an effort to give the parties more time to continue negotiation over the existing outstanding advances in the unemployment trust fund,” Holmes said.
She said the state has a “really tough time trying to do this in the middle of a session, so we want to move them as negotiations continue and move them to a Jan. 1, 2023 date.”
The measure must be approved by the Senate and then concurred on by the House. Lawmakers adjourn Friday.
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