Illinois House Democrats pass plan to use $2.7B of federal funds to lower unemployment insurance fund debt

Published: Mar. 23, 2022 at 10:17 PM CDT
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SPRINGFIELD (WGEM) - The Illinois General Assembly is working quickly this week to use one-time federal dollars to address debt in the state’s unemployment insurance trust fund. House Democrats passed a plan Wednesday night to appropriate $2.7 billion from the American Rescue Plan toward the unemployment fund to address the current $4.5 billion deficit.

House Majority Leader Greg Harris (D-Chicago) noted this bill also includes investments for pension obligations, group health insurance, and college student assistance.

$230 million from the general revenue fund is earmarked for the College Illinois program. Meanwhile, $300 million from the GRF could go to the state’s pension stabilization fund. An additional $898 million from the General Revenue Fund will go to the state employee group insurance plan.

Still, Republicans are upset that Democrats don’t want to fully cover the $4.5 billion hole in the unemployment insurance fund.

“It’s a lose-lose scenario,” said Rep. Tom Demmer (R-Dixon). “Taxes go up, benefits go down because the fund is in debt.”

Harris stressed that the $4.5 billion is owed to the federal government by November 10. Still, an interest payment of nearly $80 million is due on September 30. Harris said Republicans have constantly talked about the unemployment insurance debt during press conferences but they never presented a solution of their own.

“Ladies and gentlemen, this is what fiscal responsibility looks like. Paying your bills, taking care of your obligations - that’s what it looks like,” Harris said. “I know this is a sad night because you want the talking point, not the solution. But tonight, we’re providing the solution.”

Several Republicans booed and laughed at comments from Democrats during the debate. Rep. Dan Caulkins (R-Decatur) joined several GOP members in stating there is still time to file an amendment and make the full $4.5 billion commitment to the fund.

“We need to pay this debt. We need to get out of debt,” Caulkins said. “We need to make our unemployment fund solvent because we are very likely to have another run.”

This plan passed on a partisan 68-43 vote.

Democrats say there is still time to meet the remaining $1.8 billion in debt before it grows with interest. Members from both sides of the aisle continue to meet with leaders from the business and labor communities on agreed bills. Negotiations will resume in the coming days.

“This process should be bipartisan,” said Rep. Marcus Evans (D-Chicago). “It should be business, labor, Republicans, and Democrats. That’s what it will continue to be moving forward. Hopefully, future votes will reflect that. We took big steps here in this state to help folks.”

Republicans argue some states have decided to put a large chunk of ARPA funding towards their own deficits. Lead Democratic negotiators explained most states are putting an average of 20-30% of their ARPA dollars towards the unemployment insurance fund.

“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.”

Now the bill must go back to the Senate for consideration. Democrats say the plan needs to get to Gov. JB Pritzker’s desk for approval this week to meet a federal deadline for that spending.

“Choosing to leave a $1.8 billion hole in this critical social safety net program – with no plan to pay back the remaining balance – leaves taxpayers on the hook for future increases and does nothing to stabilize the fund in case of another emergency,” stated Rep. Ryan Spain (R-Peoria) and Sen. Sue Rezin (R-Morris).

Pritzker celebrated the bill’s passage Wednesday night and thanked Democrats who worked at the negotiation table to make it possible. The governor said Illinois is putting the fiscal house in order by paying off this debt.

“I’m disappointed that Republicans are putting their politics ahead of fiscal responsibility while Democrats in the General Assembly are taking the lead to put our fiscal house in order,” Pritzker said.

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