Congressmen ask Pritzker to repay $1.3B federal unemployment debt

U.S. House Ways and Means Committee members wrote Gov. J.B. Pritzker asking for repayment of a $1.3 billion federal unemployment insurance fund loan before Nov. 10. Failing to do so means automatically raising taxes on businesses.

Members of the U.S. House Ways and Means Committee sent a letter to Gov. J.B. Pritzker Oct. 5 urging Illinois to repay $1.3 billion in federal unemployment insurance debt before Nov. 10. Otherwise, the state’s businesses will face another automatic tax hike.

The letter signed by U.S. House Ways and Means Committee member U.S. Rep. Darin LaHood, R-Peoria, and the committee’s Republican leader, U.S. Rep. Kevin Brady, R-Texas, warns taxes on employers will increase from $42 to $63 per worker in 2023 unless the federal unemployment insurance loans are repaid.

“We urge you and the state’s legislature to prioritize repayment of this outstanding federal loan to prevent any additional economic burden on employers and workers in Illinois,” the letter stated.

The congressmen pointed out the federal unemployment tax act already increased businesses’ unemployment payments in September 2021 and will continue to do so each November as long as the $1.3 billion debt remains.

The letter warned continued delinquency on these federal loans could force business owners to pay as much as $420 per employee each year until the debt is settled. The committee suggested Pritzker use part of the $8.1 billion Illinois received in state pandemic recovery funds to pay down the balance.

“Without repayment, Main Street businesses are at risk of facing higher taxes that will undercut job creation and drive prices higher just as families and small businesses are struggling with record-high inflation and a looming recession,” they wrote.

“This self-imposed pain is preventable,” the letter stated. “As Members of the House Ways and Means Committee that oversees unemployment benefits, we urge you to address this delinquency promptly and responsibly by tapping your significant budget surplus or applying federal coronavirus aid to ensure Illinois employers and workers across the state do not bear the burden of the state’s inaction.”

Twenty-two states took federal loans during the pandemic. Most used COVID-19 relief funds to pay back those loans to avoid raising taxes on business owners. Illinois is one of only four states that have yet to eliminate their federal unemployment insurance debt. Colorado lawmakers pushed to repay their debt to beat the Nov. 10 employer tax deadline.

Avoiding an automatic tax hike on businesses statewide is a top priority as Illinois faces the possibility of a recession. Job creators are already projected to pay $1.8 billion in higher commercial property taxes during the next four years, but a proposal at the top of the Nov. 8 ballot threatens to greatly boost the potential for a faster, higher rise.

Amendment 1 would enshrine permanent power for government unions in the Illinois Constitution and restrict lawmakers from diminishing those powers. It vastly expands negotiations past compensation and into vague areas such as “economic welfare” and “safety at work” that promise more conflict in negotiations, more strikes and more costs.

Illinois knows the cost of failing to repay its federal unemployment debt. It’s anyone’s guess what Amendment 1 could cost.