Illinois House passes plan to partially refill unemployment fund

Illinois House passes plan to partially refill unemployment fund

The Illinois House voted to use $2.7 billion in federal relief to partially refill the state’s depleted unemployment trust fund. Some lawmakers said it’s not enough.

Illinois House members voted on party lines to approve a plan using funds from the federal American Rescue Plan to pay down $2.7 billion of Illinois’ $4.5 billion in unemployment debt.

Illinois took out a $4.2 billion federal loan when unemployment funds were depleted at the peak of the pandemic. State leaders missed the deadline to repay it in September 2021, triggering $60 million in annual interest.

Failing to repay the remaining balance means taxpayers are on the hook for an additional $100 million in interest.

Republican lawmakers want to avoid that penalty and pay off the entire loan, arguing there’s nearly $7 billion in relief money to do so. State Rep. Mark Batinick, R-Plainfield, said there needs to be a plan to repay the remaining debt.

“It has to be plugged by either tax increases on jobs or benefit cuts on people who get unemployment insurance,” Batinick said.

House Democrats contend the $2.7 billion is a step in the right direction to repaying the debt before the deadline Nov. 10.

“In the Midwest, the closest state to doing what we are doing is, I believe, Ohio which put $1.4 billion into this trust fund,” said Rep. Jay Hoffman, D-Swansea. “So we greatly have exceeded any state in the Midwest by making this commitment.”

Except Ohio repaid the loan in full before the September deadline. If there’s still a balance on the loan come Nov. 10, Illinois businesses will face an increase in federal payroll taxes until the balance is paid off. Ohio Gov. Mike DeWine prevented any interest by paying back the loan before the deadline.

“By repaying this loan in full, we ensure that Ohio businesses won’t see increases in their federal unemployment payroll taxes,” DeWine said in September 2021.

The Illinois General Assembly is set to adjourn April 8. The Senate has until then to approve the plan before it goes to Gov. J.B Pritzker for his signature.

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