(The Center Square) – The Illinois House late Wednesday approved using some federal COVID-19 relief tax funds to partially pay down the state’s unemployment debt. But a remaining balance could lead to tax increases on job creators, benefit cuts for the unemployed and more interest taxpayers must pay for.
The state received more than $8 billion in federal tax funds from President Joe Biden’s American Rescue Plan Act in 2021. A House amendment to Senate Bill 2803 directs $2.7 billion of that to repay part of the state’s $4.5 billion unemployment debt.
Tens of millions of dollars already have been paid in interest. If the rest of the debt is not addressed, taxpayers could be required to pay $100 million more in interest.
State Rep. Jay Hoffman, D-Swansea, said addressing the issue has not been easy.
“It’s historic, it’s monumental and very difficult to address,” Hoffman said.
State Rep. Marcus Evans, D-Chicago, said lawmakers are doing what needs to be done.
“I think today is a day where we should look to the working class of Illinois and let them know that their financial security is intact and that we did what was necessary,” Evans said.
The bill passed the House along party lines and now moves to the Senate for concurrence.
During floor debate, state Rep. Mark Batinick, R-Plainfield, said the bill still would leave some debt remaining.
“It has to be plugged by either tax increases on jobs or benefit cuts on people who get unemployment insurance,” Batinick said.
Republicans had urged for the entirety of the $4.5 billion debt to be paid down with federal COVID-19 relief tax funds, saying there’s nearly $7 billion remaining and more than what’s needed.
After the bill passed, state Rep. Tim Butler, R-Springfield, said the measure will end up hurting taxpayers, is one-sided and doesn’t address the entire debt.
“This could have been done by using [federal tax funds], but once again Democrats have chosen to use that money for pet projects, leaving the trust fund vulnerable to another emergency and putting the burden on taxpayers,” Butler said.
State Rep. C.D. Davidsmeyer, R-Jacksonville, said the state is experiencing record levels of unemployment debt because of Gov. J.B. Pritzker’s executive orders shutting down the state economy during the pandemic.
“This crisis was manufactured by Governor J.B. Pritzker shutting down our economy and refusing federal help to avert unemployment fraud,” Davidsmeyer said. “Instead of making employers and employees whole, following forced COVID-closures, the Democrats are putting another burden on the same people who were most affected by the government shutdowns.”
House Majority Leader Greg Harris, D-Chicago, called the late Wednesday night vote a step toward addressing the debt.
“Tonight we solved with one vote, in some cases what has taken decades to build up in fiscal problems and somewhat appeared almost overnight during the COVID-19 pandemic,” Harris said.
The Pritzker administration has still not revealed how much fraud there was in the unemployment system during the pandemic, though it could be in the billions.
