Illinois Unemployment Insurance Debt Becomes A Hotter Problem: Juice Springfield Memo

As Springfield prepares for an abridged spring legislative session, an issue that hasn’t received much attention beyond the pages of Crain is about to come to the fore. This is how the state, along with its employers and workers, will pay off a $ 4.5 billion debt from Illinois’ unemployment insurance program.

The debt is owed to the federal government. It was built up during the height of the COVID pandemic, when initial jobless claims hit more than 500,000 per month in a state with a normal workforce of around six million.

Unemployment figures have since declined, with Illinois’ unemployment rate now at 5.7%. But the state still owes Uncle Sam, and with the hopes Congress will write off the debt, the federal government is entitled to his money and about $ 2 million a week in interest.

This reality caught the attention of the Illinois Comptroller Susana Mendoza.

“I don’t like having to pay so much interest,” she told me on a phone call. “We’re probably going to have to pay. “

But how?

Mendoza says the state will likely have to draw some of the roughly $ 3.2 billion in funds left over from the latest federal COVID relief bill, known as the American Rescue Plan Act of 2021, or ARPA.

Governor JB Pritzker has resisted this in hopes of securing debt cancellation, but may weaken.

“We are going to go ahead and see what we can do at the state level,” a spokeswoman said.

What also highlights the problem now is that, under the law, benefit cuts for workers and tax hikes for businesses will automatically come into effect unless management and workers alike. come to an agreement through an agreed-upon bill process. Sources on both sides of the table say they believe at least initial talks are underway.

Either way, look to fix the problem, perhaps as part of the 2023 fiscal budget proposal that Pritzker will unveil soon.

Learn more about the UI situation: How will Illinois defuse this time bomb?

Find out more about state finances: Illinois prepays $ 2 billion Fed loan

Lawmakers hope to leave the city early this year, by or so April, which would allow them to start campaigning early in their new districts.

The Legislature held a day-long session yesterday to address some issues, including passing new court circuit boards in Cook County and elsewhere in the state. This action was still pending at press time last night, but is expected to pass.

Another detail: with Chicago Ald. Pat Dowell, 3rd, who has retired from the race for Illinois Secretary of State to run for the seat of U.S. Representative Bobby Rush in Congress, hopes the race will intensify on both sides.

Former state treasurer Alexi Giannoulias, city of Chicago treasurer Anna Valencia and Chicago Ald remain in the running for the Democratic nomination. David Moore, 17th. On the GOP side, veteran State Representative Dan Brady and former Springfield Federal District Attorney John Milhiser are reportedly supported by GOP megadonator Ken Griffin.

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