Pritzker administration still won’t reveal unemployment fraud estimate

[February 11, 2022]  By Greg Bishop

(The Center Square) – The Pritzker administration is still not revealing how much fraud occurred during the pandemic in the state’s unemployment program. That’s not the only thing lawmakers have been seeking over the past year.

When government-imposed restrictions led to massive spikes in new unemployment claims across the country, the amount of fraudulent claims also skyrocketed.

Other states have released fraud estimates. From the third quarter of 2020 through the second quarter of 2021, a spreadsheet from the U.S. Department of Labor shows Illinois’ fraud rate for unemployment payouts was 8.4% of $5.1 billion, an indication of nearly $430 million in fraud during that time period.

When pressed for an estimate this week during a House appropriations committee, Illinois Department of Employment Security officials said they’ve stopped 2 million fraudulent claims, but wouldn't provide an estimated dollar amount in fraudulent payments sent out.

State Rep. Marty McLaughlin, R-Barrington Hills, said that’s frustrating given approval of $25 million last year to help fight fraud.
 

“Let’s have a metric so we can follow whether or not those tax dollars have had an impact on stopping fraud or tracking,” McLaughlin said. “As of right now, we don’t have that answer a year later.”

The fraud amount wasn’t the only information withheld over the past year. State Rep. Fred Crespo, D-Hoffman Estates, has been asking for more than a year for specific information about unemployment call center operations.

“I’m not even sure if I want to embarrass myself again and ask for the same thing or if you care to explain to me why the department cannot provide information to either this committee or the [Illinois Legislative Audit Commission,” Crespo said.

State Rep. Marty McLaughlin, R-Barrington Hills, state Rep. Fred Crespo, D-Hoffman Estates, and state Rep. Brad Halbrook, R-Shelbyville, question IDES Acting Director Kristin Richards Wednesday.  

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IDES Acting Director Kristin Richards said all they can provide is a perspective of the workload to compile such data.

Lawmakers also asked about the outstanding unemployment trust fund debt. Illinois has an outstanding $4.5 billion debt for unemployment payouts. That comes with an interest rate of between 1.6% and 2.3%.

In addition to a total budget request of $447 million for the coming fiscal year, IDES is seeking a supplemental appropriation of up to $100 million to pay for interest if it’s not addressed.

State Rep. Brad Halbrook, R-Shelbyville, asked why the state isn’t using some of the billions of leftover COVID-19 relief dollars to pay down the debt.

“It seems like the road that we want to go down is increased costs to employers, which ultimately increases cost to the employees and reduces their benefits package,” Halbrook said.

Illinois has about $3.3 billion in unspent federal COVID-19 funds that could be used to pay down the debt.

Richards said the governor wants to use a “substantial” amount of remaining federal COVID-19 relief funds.

“Is that greater than 50%, or what would that number look like,” Halbrook said. “What does ‘substantial’ mean?”

“Sir, again I can not begin to comment on that,” Richards said. “The department truly stands in a position of staffing an agreed-bill process."

That agreed-bill process involved the Pritzker administration, legislative leaders and business and labor groups negotiating how to cover the remaining debt.